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nPHBPEflHASAHKAa.ft. Cpncno Ca'pajeao y npnepe/vienpi ynpcBM

Sarajevo, March 29, 2006Number:Via Fax: 202-62 2-2426Mr Robert Werner, DirectorOffice of Foreign Assets ControlU.S. Department of the TreasuryTreasury Annex1500 Pennsylvania Avenue, NWWashington, DC 20220

Re: R e q u e s t fo r Urgen t Ass is tance

Dear Mr Wern er,I write to you today to respectfully request your assistanc e. I am the internationally-appointed Provisional Administrator of Privredna Banka a.d. Srpsko Sarajevo (PBSS), oneof the entit ies named on OFAC's "Specially Designated Nationals and Blocked Persons"list.At the time of its designation by OFAC, PBSS was under the control of Momcilo Mandic, asuspected financia l suppo rter of persons indicted for war crim es (PIF W Cs). Mr Mandic isnow imprisoned here in Bosnia and facing imminent prosecution by internationalprosecutors at the State Court for his role in criminally abusing PBS S. In March of 2003,the relevant Banking regulator installed provisional administration in PBSS, therebyremoving it from Mr Mandic's control. A year later, following the beating of that f irstadministrator and his subseque nt resignation, ! was app ointed as the 2 n d provisionaladministrator by the internationally-appointed High Representative for Bosnia andHerzegovina, Lord Pad dy Ashd ow n. For your information, attached is a copy of thatappointment Decision.In order to fulf i l l my mandate to administer the bank I am often required to issueinternational paym ent orders for services or goods procured . This has generally beenunproblematic as most payments go through European banks, however, once a paymentwas seized by a US bank after the installation of provisional administration and neverreleased.On 26 March 2003, UBS Bank Stamford, CT seized a payment of $47 ,586.00. This act ion,while technically correct based on OFAC's "Specially Designated Nationals and BlockedPersons" list, occurred after the bank was removed from the hands which prompted it to belisted in the first place. UBS Bank would probably not have been aware at the time that thePBSS was in responsible provisional administration.

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All redactions made on thispage pursuant to exempt ions(b)(6) and (b)(7)(C)Mr Werner, PB SS Is a sma ll bank and I am doing my utmost to collect ou tstanding debts inan effort to repay as much of depositors' money as possible. I am also seizing Mr Mandic'sproperty in payment of debts he owes the bank and attempting to sell them to honestinvestors. This se ized paym ent - and any future paym ents that might inadvertently beseized - is critica l to my succe ss in repaying depositors and con tinuing to conduct thedaily business o f PB SS ' provisional administration.Therefore, I w ou ld kindly ask your help with two things. First, I wo uld like to request thatOFAC remove PBSS from its l ist because it is now in internationally-appointed, Americanhands and no longer ope rating in a way that required its original OFAC designation. Andsecond, I would seek your assistance getting back the funds seized after the firstprovisional administrator w as appointed in 2003.If you need further information or if I am required to petition a different US institution farth is reques t, p lease le t me know. I can be reached in my f f j c e a t ^ H H H H [ H o r onmy mobile directly at H H ^ H H H - """he

fa xnumber is H H H H I ^ ^ h o u l d youwish to reply in writing.

I thank you very m uch in advance for any assistance you can render.Sincerely,

rovisional Administrator

cc: Amb assador Larry Butler, Off ice of the High RepresentativeAmbassador D ouglas McElhaney, US Embassy Sa rajevo

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Office o f the High Representat ive HITS Decisions

Tuesday, June 08,2004

D ecisions in the Econom ic FieldD ecision appointing a Provision al Adm inistrator for the "Privred na Bank a a.d. Srpsko Sarajevo"

In the exercise of the powers vested in me by Article V of Anne x 10 (Agreem ent onCivilian Implem entation of the Peace Settlement) to the General Framework Agreementfor Peace in Bosnia and Herzegovina, according to which the High Representative isthe final authority in theatre regarding interpretation of the said Agre em ent on theCivilian Implementation of the Peace Settlement; and considering in particular Article11.1 .(d) of the last said Ag reem en t, according to the terms of wh ich the HighRepresentative shall "Facilitate, as the High Representative judges necessary, theresolution of any difficulties arising in connection with civilian imp lem enta tion";Recalling paragraph XI.2 of the Conclusions of the Peace Implementation Conferenceheld in Bonn on 9 and 10 December 1997, in which the Peace Implementation Councilwelcomed the High Representative's intention to use his final authority in theatreregarding interpretation of the Agreement on the Civilian Implementation of the PeaceSettlement in order to facilitate the resolution of any difficulties as a foresa id "by makingbinding decisions, as he jud ge s necessary" on certain issues including (under sub-paragraph (c) thereof) "measures to ensure implementation of the Peace Agreementthroughout Bosnia and Herzegovina and its Entities";Observing the importance which the international community attaches to the properadministration of the banking system of Bosnia and Herzegovina as an integral part of

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the peace implementation process;Noting by way of exam ple of the said attachment, the welcome given by the PeaceImplementation Council at the Conference held at London on 4-5 Decem ber 1996 tothe commitment of the authorities in Bosnia and Herzegovina to pass laws on fieldsincluding banking; further noting paragraph 44 a) of the Declaration of the MinisterialMeeting of the Stee ring Boa rd of the said Council held at Luxemb ourg on 9 June 1998in which the B oard o bserved that new banking legislation should be adopted in bothEntities; still further noting the call io the authorities in Bosnia and Herzegovina made

. by the said Cou ncil, at its me eting in Brussels on 23-24 May 20 00 , for the saidauthorities to harmonize country-wide their approach in a number of areas includingbanking;Considering the grave conce rn repeatedly expressed by the international commun ity,inter alia, through the Declaration of the said Council at its said meeting in Brussels on23-24 May 2000, over ing rained corruption in Bosnia an d He rzegovina which apart fromhindering the development of the market economy undermines democratic governanceand wastes public resource s;Noting that the "Privredna Banka a.d Srpsko Sarajevo" was placed under provisionaladministration by d ecision of the Banking Agency of Rep ublika Srpska dated 20 June2003;Further noting that the Provisional Ad ministrator appo inted by the Banking Agency ofRepublika Srpska a nno unce d, by letter dated 30 April 2004 , his de cision to resign fromhis position and that such d ecision followed the assault and battery perpetrated againsthis person;Mindful that the unsuccess ful efforts of the Banking A gency of Re pub lika Srpska toappoint a replacement wh ich culminated in the Decision of the M anag eme nt Board ofthe said Agency to solicit the direct involvement of an OHR repre sen tative;

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All redactions made on this pagepursuant to exemptions (b)(6) a nd(b)(7)(C)Ever conscious that the principle of the rule of law in Bosnia and Herzegovinamandates that insolvent banks be processed through efficient administration free fromillegitimate outside interference;Having taken into account an d considered the totality of the m atters aforesa id I herebymake and require to have issued the following:

DECISIONTo appoint a Provisional Administrator for the "Privredna Banka a.d. Srpsko Sarajevo"

(hereinafter: "the Bank")

1. As from 9 June 2004, H H H H I ^ M H i i s appointed Provisional Administrator ofthe said Bank.2. The mandate of the Provisional Administrator shall be regulated by law, unlessotherwise stipulated in this De cision.3. The Provisional Administrator shall be assisted by specialist teams authorized by theProvisional Administrator to work under her orders, and each member of such teamshall be provided with a letter certifying such au thorization an d of the identity of thebearer thereof.4. The Provisional Administrator and all those authorized to work under her shall haveunrestricted access to the premises of the said Bank and each and every one of itsbranches and subsidiaries, and shall have control over all the financial assets, offices,books of account and other records and documents, electronic equipment, electronicand hardcopy files and all other assets of the bank, including its branches andsubsidiaries. Such control shall include control over the reserve held on behalf of the

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said Bank in the Central Bank of Bosnia and Herzegovina.5. The Provisional Administrator, assisted by all those authorised to work under her, ishereby authorised, required and empowered to take protective measures in order tosecure the assets and records of the Bank, its branches, subsidiaries and all of theBank's participation interests so as to prevent their dissipation by theft or otherimproper action.6. Should the Provisional Administrator and/or any of those appointed and authorizedas above to assist her be physically obstructed in carrying out any of the measuresrequired to implement this D ecision, the Provisional Adm inistrator is empowe red,should she deem it necessary, to request the assistance of the Peace StabilizationForce in addition to government bodies and officials.7. The Provisional Adm inistrator sha ll be empowered, as if appointed ProvisionalAdministrator by the Banking Agency of Republika Srpska, to take all actions providedfor under the Law.8. The Provisional Adm inistrator shall be empowered at any tim e to declare all or partof the deposits and investments by the public in the said Bank totally or partiallyblocked for a maximum period of one year. Should a blocking order be so declared, theProvisional Administrator shall take all such measures as she m ay deem to beappropriate with the object o f preserving in the interim the app roxim ate value of suchdeposits and investments in the said Bank,9. The Provisional Adm inistrator shall report to the High R epre senta tive and theBanking Agency of Republika Srpska upon the said adm inistration .10. The mandate of the Pro visional Administrator shall end as dete rm ined by the HighRepresentative at later juncture.11. The cost of the Provisional Adm inistrator will be borne by the Ban k.

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12. The Provisional Administrator and all those persons who are authorized to workunder her pursuant to the Decision of the High Representative herein, shall,notwithstanding the provisions of any local law or laws to the contrary, have fullimmunity for all time from all proceedings brought before any court in respect of actionscarried out by her or them under or by virtue of the mandate bestowed by the saidDecision and in the course of duties carried out thereunder before any courtwhatsoever.13. For the avoidance of any doubt or ambiguity it is hereby specifically declared andprovided that the provisions of the Decision herein are, as to each and every one ofthem, laid down by the High Representative pursuant to his international mandate andare not therefore justiciable b y the Courts of Bosnia and Herzego vina.This decision, which has imm ediate effect, shall be published w ithout delay in theOfficial Gazette of Republika S rpska.

Sarajevo, 8 June 2004

Paddy AshdownHigh Representative

Emerika Btuma 1, 71000 Sarajevo; Tel: +387 33 283 500, Fax: +387 33 283 , .5 0 ] www.ohr.mt

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