U.S. Congressman Doug Lamborn Sends Letter to Croatia’s Prime Minister Plenkovic | Official Letter Demands Answers on Blocked U.S. Investments, Abuse of US Taxpayer Funds, Russia’s Malign Influence, and Croatia’s Placement on FATF’s ‘Money Laundering and Terrorism Financing Grey List’
Croatia’s legacy of corruption comes under the spotlight | Balkan state blocks U.S. investments, morphs into a money laundering hub within the European Union, and maintains Russian influence in the economy.
September 14, 2023 | Washington, DC | Economic and justice reform leaders and anti-corruption activists in the United States and Europe commend U.S. Congressman Doug Lamborn who signed a letter sent to Croatia’s Prime Andrej Plenkovic demanding answers on blocked U.S. investments, the Balkan country’s legacy of corruption, abuse of US taxpayer funds and Russia’s malign influence. Croatia was recently placed on The Financial Action Task Force’s (FATF) ‘Money Laundering and Terrorism Financing Grey List.’
Congressman Dough Lamborn’s signed letter was also addressed to U.S. Secretary of State Secretary Antony Blinken.
Congressman Lamborn, chairman of the Subcommittee on Strategic Forces and senior member of the US House Armed Services Committee has asked Croatia’s PM Plenkovic for a formal response to the serious concerns no later than September 30, 2023.
“We commend Congressman Doug Lamborn for his principled leadership in demanding answers from Croatia’s Prime Minister Plenkovic on blocked U.S. investments, the country’s rampant corruption, and abuse of American taxpayer funds through multilateral institutions including the World Bank and the European Bank of Reconstruction and Development.” said Natasha Srdoc, co-founder, International Leaders Summit and America’s Roundtable. “Croatia is the only European Union member state on FATF’s money laundering and terrorism financing ‘grey list,’ and this is a very serious issue for EU and NATO’s Western elected leadership who authorize funds which aid the Balkan state on the economic and security fronts. The noticeable backsliding of Croatia in rooting out rampant corruption and money laundering, places the West and its law-abiding citizens at serious economic and security risks.”
“I applaud Congressman Doug Lamborn’s efforts to address corruption and money laundering in the EU and NATO member states,” said Debra LaPrevotte, former Supervisory Special Agent, Federal Bureau of Investigation, International Corruption Unit, FBI-HQ. “At least nine NATO member/EU states have major corruption issues that need to be addressed. Corruption causes political and economic instability and contributes to unhealthy alliances. Fighting corruption in Croatia and the rest of the Balkans is a major step towards ensuring security in the region.”
In the Letter, Congressman Doug Lamborn stated,
“The U.S. taxpayers have poured money into Croatia’s infrastructure via USAID, the World Bank, IMF, EBRD and yet, U.S. private investors are blocked from investing in Croatia at a level playing field, based on the rule of law. While American taxpayers pay for U.S. Navy Ships to be repaired in the Viktor Lenac Shipyards and boost the economy of the city of Rijeka, the local politicians block U.S. private investment in the same city. Croatia has been placed on the Financial Action Task Force’s (FATF) ‘money laundering and terrorism financing grey list,’ and the only EU member state on the list.”
Congressman Doug Lamborn further writes,
“Nevertheless, recent reporting reveals further development is required by the Croatian government to advance open-market reforms and rid the nation from official corruption. The aforementioned systemic corruption facing Croatia was evidenced by the February 2022 arrest of Construction Minister Darko Horvat as well as the implication of Deputy Prime Minister Boris for the alleged manipulation of subsidies.”
In addressing corruption and Croatia’s current close economic ties to Russia, Congressman Lamborn highlights the following concerns:
“Croatia’s economic ties to the Russian state are well noted. Croatia’s top-grossing company, Fortenova, is in part owned by Kremlin-run Sberbank, who maintains a 42.5% stake. Russian- owned VTB Bank also owns a 7.5% share in Fortenova. This confirms the importance for the U.S to not allow Eastern European NATO members to continue to welcome malign influence from adversarial nations that threaten our collective national security.”
Congressman Lamborn’s letter brings to light the serious concerns of Croatia’s heads of state polices in propping up Russia’s leaders and aiding by stating,
“Left-of-center SDP’s President Milanovic (Social Democrat Party) has continued with pro-Russia policies as his predecessor HDZ’s former President Kolinda Grabar-Kitarovic (Croatian Democratic Union). While punitive EU and U.S. sanctions were firmly in place, Croatian President Kolinda Grabar-Kitarović took a high-level trade delegation to meet with President Vladimir Putin in Russia with the stated intent to develop closer economic cooperation in the sectors of tourism, property development, and energy, benefiting the Balkan nation. Grabar-Kitarović then officially invited Vladimir Putin to participate in an energy conference in the capital Zagreb, which was then attended by Putin’s long-time associate, Nikolay Petrovich Tokarev, who, according to the U.S. Treasury, served with Putin as agents of the KGB in Dresden in the 1980s. Nikolay’s daughter owns luxury properties in Croatia. Both Nikolay Petrovich Tokarev and his daughter Maiya Nikolaevna Tokareva have been sanctioned by the U.S. government.”
Congressman Lamborn’s letter points out corruption in the City of Rijeka noted for blocking U.S. investments while receiving US taxpayer aid via multilateral organizations backed by the United States and benefits from U.S. Department of Defense contracts for repairing U.S. Navy Ships:
“The U.S. taxpayers have poured money into Croatia’s infrastructure via USAID, the World Bank, IMF, EBRD and yet, U.S. private investors are blocked from investing in Croatia at a level playing field, based on the rule of law. While American taxpayers pay for U.S. Navy Ships to be repaired in the Viktor Lenac Shipyards and boost the economy of the city of Rijeka, the local politicians block U.S. private investment in the same city.’
U.S. Congressman Doug Lamborn calls for accountability and sends the following key questions to Croatia’s Prime Minister Plenkovic:
I am requesting an answer to the following questions no later than September 30th, 2023:
1) When is Croatia going to remove barriers to U.S. private investments, which are not paying bribes?
2) Why is Croatia and specifically the city of Rijeka using extortionary practices towards U.S. investment, and undermining The Treaty Between the Government of the United States of America and the Government of the Republic of Croatia Concerning the Encouragement and Reciprocal Protection of Investment, which was entered into force on June 20, 2001?
3) Croatia was the last EU member country to sign the Mutual Legal Assistance Treaty (MLAT) with the U.S., which entered into force in January 2023. Why does the Office for the Suppression of Corruption and Organized Crime (USKOK) and Croatia’s judicial system reject criminal complaints and refuse to investigate serious allegations of international money laundering in the city of Rijeka and Croatia?
4) Why have Croatia’s authorities not requested the assistance from the U.S. authorities in suspected international money laundering cases in Croatia with monies originating from Iran, Nigeria, Russia, Liechtenstein, Czech Republic, and China, among other countries?
5) Who are the beneficial owners of the strategic infrastructure in and around Port of Rijeka, and the companies receiving U.S. taxpayer funds:
A. Port of Rijeka (“Luka Rijeka”), which oversees “maritime traffic services, port services, warehousing and freight forwarding and is the largest concessionaire for dry cargo transshipment in Croatia?”
B. “Zagreb” Deep See Container Terminal in the city of Rijeka — who are the concessionnaires/beneficial owners?
C. Company Gasfin — owning the adjacent land, necessary to develop Phase II of the LNG terminal on the island of Krk?
D. Construction company GP Krk, and its affiliated companies, which received every construction contract for projects funded by U.S. taxpayers in the city of Rijeka?
E. Viktor Lenac Shipbuilding which repairs U.S. Navy Ships?
6) Why did Croatia allow the 114-foot Irina Vu luxury yacht owned by Uzbek oligarch Alisher Usmanov, a close ally of Russian President Vladimir Putin, to leave the Croatian marina Murter in January 2023, while it was held under international sanctions?
Full text of Congressman Doug Lamborn’s signed letter to Croatia’s Prime Minister Andrej Plenkovic on blocked U.S. investments, the Balkan state’s legacy of corruption and Russia’s malign influence:
The full text of the Letter sent by U.S. Congressman Doug Lamborn:
September 7, 2023
Dear Secretary Blinken and Prime Minister Plenković
I write to you concerning the barriers for U.S. investments in Croatia, as well as the deeply rooted systemic corruption that is allowing an inroad of Russian influence on our regional ally. As a member of the European Union (EU) and North Atlantic Treaty Organization (NATO), Croatia serves as an invaluable regional partner for the United States in Southeast Europe and the Balkan region. Nevertheless, recent reporting reveals further development is required by the Croatian government to advance open-market reforms and rid the nation from official corruption.
The aforementioned systemic corruption facing Croatia was evidenced by the February 2022 arrest of Construction Minister Darko Horvat as well as the implication of Deputy Prime Minister Boris Milošević for the alleged manipulation of subsidies. i The United States must therefore continue to advocate for market-oriented reforms in Croatia that ensure free and fair competition and overcome the deep legacy of a government-captured economy rooted in corruption. By permitting these reforms, Croatian markets will become a highly attractive destination for U.S. based businesses and investors that will finally allow the nation to cease all Russian-state interdependence. Economic and judicial transparency will become the bridge to a more prosperous Euro-Atlantic partnership.
Croatia’s economic ties to the Russian state are well noted. Croatia’s top-grossing company, Fortenova, is in part owned by Kremlin-run Sberbank, who maintains a 42.5% stake. ii Russian- owned VTB Bank also owns a 7.5% share in Fortenova. iii This confirms the importance for the U.S. to not allow Eastern European NATO members to continue to welcome malign influence from adversarial nations that threaten our collective national security.
Regrettably, Croatian President Zoran Milanović has refused to be a fervent supporter of the Ukrainian people as he has publicly opposed the training of Ukrainian soldiers in Croatia, as well as standing against the NATO bids of Finland and Sweden. iv Although the Croatian government has collectively stood behind the Ukrainian people, the sentiments, and anti-Western outbursts from President Milanović including his criticism of sending lethal arms to Ukraine, invite a pro-Russian presence in the region.
Left-of-center SDP’s President Milanovic (Social Democrat Party) has continued with pro-Russia policies as his predecessor HDZ’s former President Kolinda Grabar-Kitarovic (Croatian Democratic Union). While punitive EU and U.S. sanctions were firmly in place, Croatian President Kolinda Grabar-Kitarović took a high-level trade delegation to meet with President Vladimir Putin in Russia with the stated intent to develop closer economic cooperation in the sectors of tourism, property development, and energy, benefiting the Balkan nation.vi Grabar-Kitarović then officially invited Vladimir Putin to participate in an energy conference in the capital Zagreb, which was then attended by Putin’s long-time associate, Nikolay Petrovich Tokarev, who, according to the U.S. Treasury, served with Putin as agents of the KGB in Dresden in the 1980s.vi Nikolay’s daughter owns luxury properties in Croatia. Both Nikolay Petrovich Tokarev and his daughter Maiya Nikolaevna Tokareva have been sanctioned by the U.S. government.
Sanctioned oligarchs on the U.S. Treasury List Viktor Vekselberg vii and Alisher Usmanov viii, as well as Putin’s former Energy Minister Igor Yusufov have all owned properties on Croatia’s Adriatic. ix
The U.S. taxpayers have poured money into Croatia’s infrastructure via USAID, the World Bank, IMF, EBRD and yet, U.S. private investors are blocked from investing in Croatia at a level playing field, based on the rule of law. While American taxpayers pay for U.S. Navy Ships to be repaired in the Viktor Lenac Shipyards and boost the economy of the city of Rijeka x, the local politicians block U.S. private investment xi in the same city.
On June 22, 2023, Croatia was placed by the Financial Action Task Force (FATF), an international financial crime watchdog, on its so-called “grey list” of countries under special scrutiny in response to deficiencies in the country’s prevention of money laundering and terrorism financing.xii This move makes Croatia the only EU country on the list.
I am requesting an answer to the following questions no later than September 30th, 2023:
- When is Croatia going to remove barriers to U.S. private investments, which are not paying bribes?
- Why is Croatia and specifically the city of Rijeka using extortionary practices towards U.S. investment, and undermining The Treaty Between the Government of the United States of America and the Government of the Republic of Croatia Concerning the Encouragement and Reciprocal Protection of Investment, which was entered into force on June 20, 2001?
- Croatia was the last EU member country to sign the Mutual Legal Assistance Treaty (MLAT) with the U.S., which entered into force in January 2023. Why does the Office for the Suppression of Corruption and Organized Crime (USKOK) and Croatia’s judicial system reject criminal complaints and refuse to investigate serious allegations of international money laundering in the city of Rijeka and Croatia? xiii
- Why have Croatia’s authorities not requested the assistance from the U.S. authorities in suspected international money laundering cases in Croatia with monies originating from Iran, Nigeria, Russia, Liechtenstein, Czech Republic, and China, among other countries?
- Who are the beneficial owners of the strategic infrastructure in and around Port of Rijeka, and the companies receiving U.S. taxpayer funds:
A. Port of Rijeka (“Luka Rijeka”), which oversees “maritime traffic services, port services, warehousing and freight forwarding and is the largest concessionaire for dry cargo transshipment in Croatia?”
B. “Zagreb” Deep See Container Terminal in the city of Rijeka — who are the concessionnaires/beneficial owners?
C. Company Gasfin — owning the adjacent land, necessary to develop Phase II of the LNG terminal on the island of Krk?
D. Construction company GP Krk, and its affiliated companies, which received every construction contract for projects funded by U.S. taxpayers in the city of Rijeka?
E. Viktor Lenac Shipbuilding which repairs U.S. Navy Ships? - Why did Croatia allow the 114-foot Irina Vu luxury yacht owned by Uzbek oligarch Alisher Usmanov, a close ally of Russian President Vladimir Putin, to leave the Croatian marina Murter in January 2023, while it was held under international sanctions? xiv
Sincerely,
Doug Lamborn
Member of Congress
i Freedom House. Croatia: Freedom in the World 2023 Country Report. (June. 6, 2023)
ii Dunai, Marton. The European Retail Group Still Struggling to Ditch Its Russian Owners. Financial Times. (June 14, 2023)
iii Dunai, Marton. The European Retail Group Still Struggling to Ditch Its Russian Owners. Financial Times. (June 14, 2023)
iv Hajdari, Una. Croatian President Likens ‘Slava Ukraini’ Slogan to ‘Sieg Heil’ Salute. Euronews. (February 6, 2023)
v AP News. Croatia’s President Criticizes Tank Deliveries to Ukraine. (January 30, 2023)
vi Lozančić, Branko. President Kolinda Grabar-Kitarović to Meet with Vladimir Putin. The Voice of Croatia.
vi U.S. Department of the Treasury. Treasury Sanctions Russians Bankrolling Putin and Russia-Backed Influence Actors. (March 3, 2022)
vii Garaca, Maja. Russian Businessman to Invest up to 150 Mln Euro in Croatia’s Hotel Belvedere — Report. Business News for Southeast Europe. (August 22, 2017)
viii U.S. Department of the Treasury. Treasury Targets Russian Financial Facilitators and Sanctions Evaders Around the World. (April 12, 2023)
ix Bačić, Mašenjka. Secret Offshore Loans Funded Private Croatian Island Resort. Oštro Hrvatska. (November 9, 2021)
x City of Rijeka. Visit to the Ship USS Arlington at the Viktor Lenac Shipyard. (August 11, 2022)
xi International Leaders Summit. EU Capital of Corruption 2020 — Rijeka, Croatia: Evidence Photographs. Medium. (July 7, 2022)
xii Presse, AFP — Agence France. Cameroon, Croatia, Vietnam Put on Money-Laundering ‘Grey List’: FATF. Barron’s. (June 23, 2023)
xiii DOJ. Mutual Legal Assistance Treaties of the United States. (April 2022)
xiv Radosavljevic, Zoran. Croatia Puzzled by Disappearance of Sanctioned Oligarch’s Yacht. Euractiv. (January 17, 2023)
Relevant articles, broadcast television and radio reports on Croatia, the Balkans and the Eastern European region:
Natasha Srdoc’s conversation with Inda Swanke at Voice of America (9:40 minute) — Studio Washington D.C. Security threats to the West emanate from the Balkans — governments (local and national) laundering money for organized crime and welcoming China and Russia’s state-run enterprises and suspect funds.
“American investments are blocked. As Americans, we are fleeced twice — first, by providing US taxpayer funds to build the region’s infrastructure, and then we are blocked from trading and investments.” — Natasha Srdoc, MBA, Co-Founder, International Leaders Summit
Croatia’s state-run channel HRT 4, led by editor Denis Latin and journalist Petar Vlahov interviews Natasha Srdoc on November 12, 2018. The interview from Jerusalem, Israel, addressed rampant corruption in Croatia, lack of rule of law and criminal capitalism.
