At its meeting held on 1 June 2004 at the Croatian National Bank, the Committee on the Distribution of Financial Assets and Liabilities of the Former SFRY Referred to in Annex C to the Agreement on Succession Issues reached an agreement to distribute the monetary gold of the National Bank of Yugoslavia of the Former SFRY deposited with Credit Suisse, Zürich and Bank of France, Paris and to distribute the gold of the NBY of the former SFRY previously held with the France-UK-USA Gold Commission. Under this agreement, the 8.5 tons of gold, valued at USD 107m in accordance with end-May price of gold per ounce, will be distributed using the schedule for the distribution of the financial assets and liabilities of the former SFRY as determined under the Agreement on Succession Issues (23% to the Republic of Croatia, 15.50% to Bosnia and Herzegovina, 7.50% to the Republic of Macedonia, 16.00% to the Republic of Slovenia and 38.00% to Serbia and Montenegro). In view of the ratification by the Republic of Croatia of the Agreement on Succession Issues which takes effect these days, all formal and legal obstacles have been removed for the distribution among the successor states of the financial assets and liabilities of the former SFRY.

The Committee also examined the issue of the distribution of funds held in the foreign exchange accounts of the NBY of the former SFRY with commercial banks but no agreement was reached on this issue because of the question brought forward by the authorised representative of Serbia and Montenegro on the Committee regarding lawsuits against several commercial banks. Agreement on the distribution of this part of foreign exchange reserves is expected to be reached at the next Committee's meeting, scheduled to in Skopje in June this year.

As regards the issue of foreign exchange deposits of the NBY of the former SFRY with joint venture banks, it was stressed that the Committee had not received full documentation on the balance and the changes in the said accounts, and could not trace the USD 589m that had disappeared from them.

The attempt of the Committee to form an expert working group to deal with this issue failed due to the objections of the representative of Serbia and Montenegro. Three possible solutions were proposed to resolve the situation. The first one was that the Joint Standing Committee of Senior Representatives of the Successor States should recommend forming an expert working group. The second included an amendment to the Agreement on Succession Issues to incorporate the remaining amount of USD 56m into the Agreement while the third possible solution implied initiating legal action against the National Bank of Serbia. In light of the above, the Committee decided that the unresolved issue of the balance and the changes in the accounts of the NBY of the former SFRY with joint venture banks should be referred for resolving to the Standing Joint Committee. The Standing Joint Committee is expected to take its position on this issue and provide guidelines to the Committee on the Distribution of Financial Assets and Liabilities for the Committee's further work in this area.