7-15-12 gft v fyrom icsid request
TRANSCRIPT
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Before the
INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENTDISPUTES
__________________________________________________________________
GUARDIAN FIDUCIARY TRUST, LTD, F/K/A CAPITAL
CONSERVATOR SAVINGS & LOAN, LTD
Claimant
v.
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA
Respondent
Request For Arbitration Proceedings
Counsel for the Claimant:Juan F Torres III, Esq.Juan F Torres III, P. A.4900 Oleander AvenueFort Pierce, Fl 34982772-672-5200 (telephone)772-293-9017 (telefax)
` Petro Janura, Attorney at lawAdvocate Petro JanuraOrce Nikolov 94Skopje, Macedonia0038970228619
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Dated:
TABLE OF CONTENTS
Page
I. SUMMARY OF THE DISPUTE.....3II. PARTIES TO THE DISPUTE5
A.Organizational Structure, Control and Nationality.......6B.Other Relevant Entities.....8
III. ICSID JURISDICTION........9 A. The ICSID Convention and (Bilateral Investment Treaty)
Agreement Between The Former Yugoslav Republic of
Macedonia and the Kingdom of The Netherlands.................9
B. Consent to ICSID Jurisdiction..12
1. The Respondents Consent Expressed in theAgreement Between the Kingdom ofThe Netherlands and FYROM....12
2. The Claimants Consent13IV. RELEVANT FACTS OF THE INVESTMENT DISPUTE..13
A. The Claimants Investments In The Former Yugoslav
Republic of Macedonia26
B. Respondents Actions ...........................28
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C. Consequences of Respondents Actions..34
V. CLAIMS38VI. REQUEST FOR RELIEF....42
REQUEST FOR ARBITRATION
Claimant, Guardian Fiduciary Trust, Ltd, f/k/a Capital Conservator
Savings & Loan, Ltd, (hereafter, Claimant or GFT) hereby submits this
Request for Arbitration pursuant to Chapter IV, Section 1, Article 36, of
the Convention On The Settlement of Investment Disputes Between States
And Nationals Of Other States (hereinafter Convention) to resolve, by
means of arbitration administered by the International Centre for Settlement
of Investment Disputes (hereinafter ICSID) under Chapter IV, Arbitration,
Section 1, of the Convention, the following legal investment dispute with
the Former Yugoslav Republic of Macedonia (Respondent or FYROM):
SUMMARY OF THE DISPUTE
1. This dispute concerns the Respondents gross misconduct, gross negligenceand unlawful arrest of one of Claimants directors for money laundering
and illegal activities and statements made by Respondent connecting
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Claimant to said money laundering and illegal activities involving
Claimants substantial investment in FYROM when Respondent knew or
should have known that said statements were false. Respondent, publicly,
officially, through the news media, and through its official website, alleged
that Claimants Director, using only his initials, but using Claimants name
and the names of its related companies, laundered approximately
$30,000.000.00 USD (Claimants investment in FYROM) through a bank
in FYROM via Claimants non-resident account and its related companies
non-resident accounts and that said funds came from the United States and
were the source of frauds perpetrated on investors in the United States and
Great Britain. Said allegations will be set forth in detail in Section IV
below.1
In truth, neither the funds ($30,000.000.00 USD) invested through
FYROM in Claimants non-resident bank account nor the monies
($431,934.00 USD, comprised of four (4) wire transfers) which also went
through Claimants non-resident account subsequently alleged to be
laundered by Claimants former Director and used to convict said Director
were from frauds perpetrated on investors in the United States and Great
Britain.
2. Claimant made large investments by way of operating its trust financialservices business through a non-resident bank account in the largest bank in
FYROM from 2007 through 2009. In managing and operating their
investments, the Claimant relied on the guaranteed protections for their
rights and interests, including the commitment to treat said investments
1Factualallegationsmadehereinarebasedondocumentaryevidenceaswellasrepresentationofcorporate
employeesoftheClaimanttobepresentedindetailinSectionIVbelowandattheappropriatestageofthe
proceedings.Citationstosomeofthedocumentaryevidenceinsupportoftheallegationsmadehereinare
providedinappropriatesectionsherein.
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fairly and strictly in accordance with FYROM laws and a Bilateral
Investment Treaty (BIT). See footnote 3.
3. The actions and measures of Respondent gravely affected Claimantsbusiness and customer relations to such an extent that said actions were
tantamount to a wrongful expropriation of the investment and the returns2
made by the Claimant in FYROM, were a breach of FYROMs own laws,
breach of international laws, and a breach of FYROMs obligations under
the BIT3 to accord fair and equitable treatment to Claimants investment,4
among other violations of said BIT. Through these actions and measures the
Respondent indirectly expropriated the Claimants investments and profits
and returns, including the value of Claimants business and related assets
and operations in that Claimants operations virtually ceased as Claimant
could not find a company operating business account. The measures taken
by the Respondent against the Claimant violates FYROMs obligations
under its Bilateral Investment Treaty (BIT) with the Kingdom of the
Netherlands and principals of international law.
I. PARTIES TO THE DISPUTE
2UnderArticle1(d)oftheBITthetermreturnsshallmeanmoneyyieldedbyaninvestmentandinparticular,
thoughnotexclusivelytheprofit,theinterest,thedividends,compensationwithrespecttolicenses,aswellas
othersimilarcompensation.3TheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandtheKingdom
oftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT)4ThespecificbreacheswillbesetforthintheSectionIVbelowandsetforthintheappropriatestageofthe
proceedings..
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4. Claimant, GFT, is a trustee company and registered financial servicesprovider, incorporated and regulated pursuant to the laws of New Zealand.
GFTs main headquarters are in New Zealand with administrative offices in
Uruguay and Serbia. GFTs address is Level 2, The Public Trust Building,
442 Moray Place, PO Box 3058, Dunedin, New Zealand 9016.
5. The previous name of GFT was Capital Conservator Savings & Loan, Ltd.That entity was incorporated and qualified as a trustee company pursuant to
the laws of New Zealand, headquartered in New Zealand, with an
administrative office in Uruguay and a European Representative Office in
Serbia. After it re-registered in New Zealand as a trustee company under the
name GFT the law in New Zealand changed, and it registered as a financial
services provider.
A.Organizational Structure, Control, and Nationality
6. Guardian Fiduciary Trust Limited, (GFT) formerly known as CapitalConservator Savings & Loan, Ltd., is a Trustee Company and Registered
Financial Services Provider, incorporated and regulated pursuant to the
laws of New Zealand. It was incorporated on 16 July 2007.
7. GFT is wholly owned by Capital Conservator Trustees, Ltd., a TrusteeCompany, incorporated and registered pursuant to the laws of New
Zealand. It was incorporated on 17 September 2008.
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8. Capital Conservator Trustees, Ltd. is a wholly owned subsidiary of In AssetManagement, Ltd. a company incorporated and registered pursuant to the
laws of New Zealand. It was incorporated on 22 May 1995.
9. In Asset Management, Ltd., is wholly owned by Stichting Intetrust, a Dutchfoundation founded on 22 December 1988, having its registered office at
Velp (Gld), Netherlands. The founder and director of Stichting Intetrust is
Nicolas Jan Carol Francken. Stichting Intetrust is the owner and holder of
all the family interests of Nicolas Jan Carol Francken.
10.On 17 September 2008 Capital Conservator Trustees, Ltd. wasincorporated as a wholly owned subsidiary of In Asset Management, Ltd.
11.Capital Conservator Savings & Loan, Ltd., now renamed GFT, Ltd., wasincorporated and registered on 16 July 2007. And on 17 September 2008,
Capital Conservator Trustees, Ltd., acquired all of the issued shares of
Capital Conservator Savings & Loan, Ltd.
12.On 17 September 2008 Capital Conservator Trustees, Ltd. acquired all ofthe issued share capital of Capital Conservator Savings & Loan, Ltd. From
17 September 2008, Stichting Intetrust, through its wholly owned
subsidiary IN Asset Management, Ltd., and through its wholly owned
subsidiary Capital Conservator Trustees, Ltd., held all the shares and voting
rights in CCSL, Ltd., (now renamed GFT, Ltd.)
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13.In conclusion, Capital Conservator Trustees, Ltd., and all of its whollyowned subsidiaries are ultimately owned and controlled by Stichting
Intetrust of Velp (Gld) the Netherlands.
5
14.Therefore, for the purposes of this Request, GFT, Ltd., is a national of theNetherlands pursuant to Agreements On Encouragement and Reciprocal
Protection of Investments between the Macedonian Government and (the
BIT)6 and has standing to file this request pursuant to that BIT.
15.Since the Stichting Intetrust is a Netherlands registered foundation andwholly owns and directly and indirectly controls GFT. GFT is therefore a
National of the Netherlands which is a Contracting State for the purpose of
the ICSID Convention.7
B. OTHER RELEVANT ENTTIES
5AchartreflectingtheorganizationalstructureofGFTisannexedheretoinAppendixIA6SeetheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandthe
KingdomoftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT);SeeN5.7SeeICSIDConventionChapterII,JurisdictionoftheCentre,Article25,(2), National of another Contracting
State means:(a) any natural person who had the nationality of a Contracting State other than the State party to the dispute on thedate on which the parties consented to submit such dispute to conciliation or arbitration as well as on the date onwhich the request was registered pursuant to paragraph (3)of Article 28 or paragraph (3) of Article 36, but does notinclude any person who on either date also had the nationality of the Contracting State party to the dispute; and(b)any juridical person which had the nationality of a Contracting State other than the State party to the dispute on thedate on which the parties consented to submit such dispute to conciliation or arbitration and any juridical personwhich had the nationality of the Contracting State party to the dispute on that date and which, because of foreigncontrol, the parties have agreed should be treated as a national of another Contracting State for the purposes of this
Convention .andtheBIT.SeealsoArticle1(b)IIIoftheBIT.
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16.Bank of America (BOA) is a bank incorporated pursuant to the laws ofNorth Carolina and registered and conducting business in New York
17.Michael S. Krome (Krome or MSK) is a United States citizen, a resident ofthe State of New York and was an attorney licensed to practice law in New
York.
18. Borko Markovic (Markovic) was a former director of CCSL,
and the shareholder, sole owner and director/authorized person, of Capital
Conservator DOOEL (hereinafter CC DOOEL). He is a citizen of
Montenegro, and at the times herein was a legal resident of the Oriental
Republic of Uruguay.
19. CC DOOEL is a limited liability company incorporated,
registered and regulated pursuant to the laws of the FYROM.
20. The United States Securities and Exchange Commission
(SEC) is a federal agency created by the Securities Exchange
Act of 1934 (15 U.S.C. 78d).
II. ICSID Jurisdiction
21. As explained below, ICSID has jurisdiction over this investment dispute
under the Convention on the Settlement of Investment Disputes between
States and Nationals of other States (the ICSID Convention).8 The Claimant
and the Respondent have expressed their consent to ICSID as they are
8TheConventionoftheSettlementofInvestmentDisputesbetweenStatesandNationalsofotherStatesmadein
Washington,D.C.18March1965,inforcesince14October1966(hereinafterICSID).
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Contracting States of the ICSID and through the Bilateral Investment Treaty
between FYROM and the Kingdom of the Netherlands, (the BIT).9
A.The ICSID Convention and Agreement Between The FormerYugoslav Republic of Macedonia and The Kingdom of The
Netherlands (The BIT)
1. The Netherlands and the FYROM are both parties to the ICSID
Convention.
2. The Kingdom of Netherlands signed the ICSID Convention on
14 October 1966.
3. The FYROM signed the ICSID Convention on7 July 1966.
22. Under Chapter II, Article 25, of the ICSID Convention, the ICSID has
jurisdiction over any legal dispute arising directly out of an investment,
between a Contracting State to the ICSID Convention and a National of
another Contracting State to the Convention if both parties to the dispute have
consented in writing to submit the dispute to ICSID.10
23. The Agreement On Encouragement and Reciprocal Protection of
Investments Between the Macedonian Government and the Government of the
9TheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaandtheKingdom
oftheNetherlandssingedatSkopje,FYROMon7July1998.(theBIT)10
SeeChapterIIArticle25oftheICSIDConventionandfootnote11belowandparagraphsA5through14above.
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Kingdom of the Netherlands signed at Washington on 18 March 1965,
(hereinafter the BIT), is a bilateral investment agreement wherein each State
consents to the jurisdiction of the ICSID in the event of a legal dispute arising
between that Contracting State and a national of the other Contracting State
concerning an investment of that national in the territory of the former
Contracting State.11
24. As stated above, GFT is a National of the Kingdom of the Netherlands for
the purposes of the ICSID Convention and the Bilateral Investment
Agreement because it is a legal entity controlled by a Netherlands legal entity,
Stichting Intetrust.12 See footnotes 9 and 10 above.
25. The Claimant held direct investments in the territory of the FYROM
within the meaning of, and economic activity described in, Article 25 of the
ICSID Convention, as well as within the meaning of the BIT.
a. Article 1 of the BIT states as follows:For the purposes of this Agreement:
i. The term investments means every kind of asset and moreparticularly, though not exclusively.
11Article9oftheBITonEncouragementandReciprocalProtectionbetweentheGovernmentofMacedoniaand
theKingdomoftheNetherlandssingedatSkopje,FYROMon7July1998.(theTreaty)statesEachContracted
Statehereby
consents
to
submit
any
legal
dispute
arising
between
the
Contracting
State
and
anational
of
the
otherContractingStateconcerninganinvestmentofthatnationalintheterritoryoftheformerContractingState
totheInternationalCentreforSettlementofInvestmentDisputesforsettlementbyconciliationorarbitration
undertheConventionontheSettlementofInvestmentDisputesbetweenStatesandNationalsofotherStates,
openedforsignatureatWashingtonon18March1965.AlegalpersonwhichisanationalofoneContractingState
andwhichbeforesuchadisputearisesiscontrolledbynationalsofotherContractingStatesshall,inaccordance
withArticle25(2)(b)oftheConvention,forthepurposesoftheconventionbetreatedasanationaloftheother
ContractingState;signed07July1998.12
SeetheBIT,Article1(b)(III).
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1. Movable and immovable property as well as any otherrights in rem in respect of every kind of asset;
2. Rights derived from shares, bonds and any other kindsof interests in companies and joint ventures;
3. Claims to money, to other assets or to any performancehaving an economic value;
4. Rights in the field of intellectual property, technicalprocesses, goodwill and know-how;
5. Rights granted under public law or under contract,including rights to prospect, explore, extract and win
natural resources.
26.The details of claimants investment in FYROM will be described in PartIV of this Request for Arbitration.
27.The Claimants investments in using operating bank accounts in FYROMevidence their interests in the fact of exclusively using FYROM and the
largest bank in FYROM for its operation.
28.The dispute described herein is a legal dispute arising directly out of theClaimants investment in FYROM, as explained in Part IV.
A. Consent To ICSID Jurisdiction29.The Claimant has expressed its consent in the letter to Respondent
described and annexed hereto as Exhibit __. Additionally, the claimant
consents to ICSID jurisdiction pursuant to the BIT attached and described
herein. Respondent also has expressed its consent in the BIT. The
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Claimant has expressed its consent in the letters annexed herein as
Exhibit__ and ratifies its consent by filing this Request for Arbitration.
1. The Respondents Consent Expressed in the BITbetween the Kingdom of the Netherlands and
FYROM.
30. As stated in footnote 11 above, Article 9, of the BIT between the partiesprovides for the settlement of disputes through ICSID arbitration and states
as follows:
A. Each Contracting State hereby consents to submit any legal disputearising between the Contracting State and a national of the other
Contracting State concerning an investment of that national in the
territory of the former Contracting State to the International Centre for
Settlement of Investment Disputes for settlement by conciliation or
arbitration under the Convention on the Settlement of Investment
Disputes between States and Nationals of other States, opened for
signature at Washington on 18 March 1965. A legal person which is
a national of one Contracting State and which before such a dispute
arises is controlled by nationals of other Contracting States shall, in
accordance with Article 25(2) (b) of the Convention, for the purposes
of the convention be treated as a national of the other Contracting
State.
B.By the very nature of FYROM entering into this Agreement with theKingdom of the Netherlands, it has ratified its consent to ICSID
jurisdiction for arbitration to resolve the legal investment dispute
herein.
C.Pursuant to the spirit of the ICSID Convention Claimant, by letter dated_____________, mailed a rough draft (note the Request provided to
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Respondent has been modified to the present Request) of a Request For
Arbitration to Respondent with the intent to amicably settle this claim
(negotiate) and determine whether they agree to ICSID arbitration
(jurisdiction). Claimant even provided a translated version of the rough
draft of said Request to the Respondent.
2. The Claimants Consent
31. The Claimant has consented to the ICSID jurisdiction of this dispute
by letter from In Asset Management/Nicolas Jan Francken/Stichting
Intetrust dated 15 April 2012 to counsel authorizing counsel to proceed
with ICSID arbitration, by the BIT, and by the said authorized consent of
GFTs directors and controlling entity (Stchting Intetrust) national of the
Netherlands and contracting State to the ICSID and to the BIT. Said
consent is attached hereto as Exhibit __.
IV. RELEVANT FACTS OF THE INVESTMENT DISPUTE
32. As a New Zealand-qualified Trustee Company and Registered
Financial Services Provider, GFT formerly, CCSL provides fee-based
private trust and wire financial services, private major high- limit
traditional and nontraditional Mastercard debit cards, private on-line
trading and private gold and precious metal purchases -- all through
licensed and regulated banks, credit card issuers, gold repositories and
brokerages. Its trust and trust financial services business are based on
complete trust, and the trustful operations and professionalism of said
business is its cornerstone. Additionally, CCSL provides company
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formation services in many jurisdictions, as well as multi-jurisdictional
business structures and investment accounts held in trust for its clients also
through license registered and regulated firms and trust of said business is
also its cornerstone.
33. After an intensive worldwide research of countries with large banks
advertising and appealing to foreign businesses to invest in their countries
with favorable business treatment, GFT determined that FYROM and its
largest bank, Stopanska Banka, Skopkje (hereinafter SB) both contained
the ideal business environment for Claimants business. GFT determined
that FYROM was one of the few countries and worldwide that allowed a
company such as GFT to perform the full range of services that it was
authorized to provide pursuant to its registration in New Zealand. GFT
contacted SB to inquire if SB could provide GFT with accounts in multiple
currencies through which wire sending and receiving services could be
provided for GFTs trust clients.
34. GFTs engaging in these arrangements was authorized by NewZealand law, and its business actions were authorized by SB and by
FYROM law. Toward this end, GFT provided SB with its New Zealand
Certificate of Incorporation, Constitution (which clearly sets forth the
services GFT provides and would provide through SB), a legal opinion
from a New Zealand law firm, GFTs Anti-Money Laundering and Know
Your Client Procedures, and complete due diligence on the principals of
GFT, for SBs examination and approval. GFT relied upon and specifically
chose FYROM and SB because GFT could conduct its business activities in
FYROM, and SB would provide all of the aforementioned activities
requested by GFT. Other reasons why SB in FYROM was chosen were that
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FYROM allowed SB to provide GFT with the following services: (i) had
key U.S. dollar accounts, trading in United States dollars, with three (3) of
the largest banks in New York; (ii) was the largest bank in the FYROM; (iii)
was a member of the NBG Group, the largest banking group in Southern
Europe; (iv) was a leading bank in FYROM in its national banking market
concerning international payments in several currencies; (v) was an
institution within FYROM with a high rating within the sphere of
international payments; (vi) FYROM allowed SB to provide commercial
payments for non-residents and legal entities; (vii) had a professional
experienced staff that provided prompt and quality performance of
international wires, servicing customers professionally; and (viii) due to
FYROMS incentive laden business environment SB had very competitive
service fees, and special discounts for international good standing customers
as required by FYROM. Most importantly, FYROM allowed SB to provide
same day transfer/wire orders in favor of non-resident businesses at the
moment of receiving an order from its client.
35. On November 5, 2007, GFT, under its former name, and SB executed
a contract for a non-resident foreign currency account and non-resident
MKD Denar account in the name of CCSL, now GFT. As requested by
CCSL, the contract between CCSL and SB was drafted by SB in English.
36. Said contract was written by SB to provide CCSL with the
aforementioned banking services in FYROM.
37. CCSL, being a New Zealand qualified Trustee Company, was
required by FYROM and SB to open a non-resident foreign account and a
non-resident Denar account (MKD account).
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38. Once the account at SB was opened, CCSL deposited in excess of
$100,000.00 into it.
39. Upon opening the non-resident account, the business relationship
between CCSL and SB commenced. SB and FYROM were fully aware of
the type of services CCSL provided to its customers, and that it was a
qualified trustee and financial services provider.
40. CCSL operated its financial account wire sending and receiving
services in FYROM through the nonresident foreign currency accounts with
SB for approximately two years. During the course of these two years, over
$30,000,000.00 USD passed through said accounts. These funds were
infused through the FYROM economy via SB. The business relationship
between the parties was a very positive one to the extent that SB even
provided a Letter of Reference for CCSL to use in establishing additional
financial accounts at other banking institutions and encouraged CCSL to
bring on higher end clientele.
41. On June 11, 2009, without any reasonable notice, explanation, or
cause, SB emailed a notice to CCSL stating that all of CCSLs accounts
would be closed as of June 12, 2009. The notice was also sent to CCSL by
international mail.
42. To the best knowledge and belief of Claimant, the SEC began an
investigation of Krome/MSK and their bank accounts and wire transfers in
or around 2009.
43. In or around September, 2009, long after the last of the wire transfers
discussed above, CCSL learned of the United States Securities & Exchange
Commissions (hereinafter SEC) investigation of MSK/Krome and their
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accounts and wires. In order to cooperate with the SEC investigation,
CCSLs president, R. David Finzer, telephoned the SECs office that was
conducting the investigation, to offer CCSLs full cooperation. Mr. Finzer
spoke with Alberto Arevalo, Assistant Director and Richard Thatcher, Esq.,
Investigating Attorney. On the same day, Assistant Director Arevalo and
Attorney Thatcher called CCSL back to discuss the means by which CCSLs
cooperation could be best effectuated. During that conversation, Mr. Finzer
requested a subpoena from the SEC. Said conversation was memorialized in
a fax sent to these officials on September 12, 2009. Pursuant to the SECs
request, CCSL hired an attorney in the United States, Shayne R. Kohler
(Kohler), and authorized Kohler to accept a Subpoena from the SEC.
44. The SEC issued the subpoena. CCSL thereafter completely, totally,
and openly cooperated with the SEC, which was investigating, the wires, in
conjunction with the FYROM SEC and other FYROM authorities.
A. The SEC also contacted the FYROM SEC with respect to the
funds that were transferred from MSK/Krome account in BOA in the
United States to SB. A letter from the Securities and Exchange
Commission of the Republic of Macedonia to the Office for
Prevention of Money Laundering and Financing Terrorism of the
Republic of Macedonia dated 24 August.2009, establishes that
FYROM was directly contacted by the SEC. The letter from the US
Securities and Exchange Commission to the Securities andExchange Commission of the Republic of Macedonia notifies
FYROM that the US Securities and Exchange Commission is
conducting an investigation and is asking for cooperation in said
investigation for a possible Fraud perpetrated against
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shareholders upon the sales of shares, who reported it to the US
Securities and Exchange Commission, wherein a part of the funds
allegedly went to one of the non-resident accounts of Capital.
Conservator Savings & Loan with Stopanska Banka AD Skopje,.
45. CCSL requested SB to provide CCSL with the SWIFT confirmations
regarding the aforementioned wires so that CCSL could conduct due
diligence on them pursuant to CCSLs Anti-Money Laundering Policies, and
in order to comply with CCSLs obligations under New Zealands Anti-
Money Laundering Legislation, to comply with FYROM laws, as well as to
provide the information to the SEC requested in its subpoena. SB refused to
comply with CCSLs request for cooperation and disclosure.
46. SWIFT stands for Society for Worldwide Financial
Telecommunication (SWIFT). It operates a worldwide financial messaging
network that exchanges messages between banks and other financial
institutions. SWIFT sends payment orders that must be settled via
correspondent accounts that institutions have with each other. To exchangebanking transactions, each financial institution must have a banking
relationship by either being a bank or affiliating itself with another bank.
SWIFT is a cooperative society incorporated in Belgium and owned and
operated by its member financial institutions for their mutual benefit.
47. Eventually, the SEC expressed its gratitude for CCSLs cooperation
and stated that it had no further need for cooperation from CCSL. At notime did the SEC ever suggest or indicate that CCSL had engaged in any
wrongdoing.
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48. Similarly, the FYROM authorities officially recognized that CCSL
fully cooperated with the United States SEC. But this statement was never
placed in the official Ministry of Interior of FYROM website.
A. At the main hearing in the criminal procedure against Markovic,
held on 12 October 2009, the Main Prosecutor stated in the minutes
that the evidence produced in the case was obtained from the US
Securities and Exchange Commission and that since the
commencement of the criminal procedure Capital Conservator offered
to cooperate and made available to the US SEC the entire
documentation thereof, wherein a part of the documentation
was gathered owing to the cooperation with Capital Conservator,
due to which he proposed that, if the court should find Borko
Markovic guilty, it should consider this circumstance as an
extenuating one upon the determination of the sentence.
49. On or about 31 August 2009, the FYROM authorities, the Ministry
of Interior, in conjunction with the Office of Prevention of money
Laundering and Financing Terrorism, the Prosecutors Office of Organized
Crime and Corruption, arrested Markovic, then a director of CCSL, for
money laundering in the amount of thirty million dollars ($30,000,000.00
USD). In contrast to this enormous sum, Markovic was subsequently
charged and convicted by the FYROM authorities of money laundering in
the amount of $431,943.00 USD, the same amount that Krome transferredand that the SEC was investigating.
A. On or about 2 September 2009, the Ministry of Interior of
FYROM stated, in its news release, in their official website and to the
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news media that CCSL, all of its related companies which had bank
accounts at SB, and their former director BM had laundered
around $30,000,000.00 USD of illegal funds coming from
different countries. A copy of said web page is annexed hereto as
Exhibit __. It is important to note here that the Claimant was never
charged with a crime. But the language used by the Respondent in
undermining the operations of the Claimant, by specifically using and
mentioning Claimants name and those of its related companies infers
the Claimant was, indeed, involved in illegal activities (e.g. money
laundering). In said statement Respondent used Claimants name and
that of its related companies, whereas with Claimants former
director, Markovic was mentioned only by his initials and thus
according more favorable treatment to him than to Claimant.
B. In official proceedings under the investigative stage of the
proceedings the State asserted the following:
Under the Decision of the investigation judge I KIOK 54/09 dated
01.09.2009 it was decided to start an investigation and to hold the
defendant in custody. In the Decision it was stated that in the period
from, November 2007 until August 2008 in Skopje, Republic of
Macedonia, as the person authorized for several non-resident bank
accounts with Stopanska Banka AD Skopje of the legal entity Capital
Conservator Savings & Loan Limited from New Zeeland and as themanager and owner of the legal entity Capital Conservator DOOEL
Skopje and the signatory of the account of the legal entity Capital
Conservator DOOEL Skopje, he [BM] received, transferred and
obtained money in a total amount of $30 million, originating from a
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criminal act of fraud perpetrated in the USA and other countries.
Among the many transactions stated in the Decision of the
investigation judge, it was also stated that he received $431,943.00 via
related transactions thereafter that money was converted and
transferred to the accounts of other legal entities abroad, among which
also Capital Conservator Savings SA Uruguay and USA.An official
copy of said hearing is attached hereto as Exhibit .
C. In the Indictment stage of the proceedings held on 27 November
2009 Markovic was charged on a lesser crime under Article 4 of the
Criminal code, which could punish the accused up to three (3) years
of imprisonment not the original $30 million USD with the amount of
the crime changing from the $30 million USD, to $431,934.00; it also
alleged [t]he description of the prior criminal act (sic) perpetrated
abroad corresponds to the text of the description given by the [SEC].
An official copy of said hearing is attached hereto as Exhibit __.
D. In the Summary Proceeding of Markovic dated 10 December
2009, a hearing was scheduled pursuant to the provisions on summary
proceedings, in accordance with the Code of Criminal Procedure of
the Republic of Macedonia, having regard to the fact that it is an act
for which a sentence for a short period of imprisonment is issued
(Defendant was charged for a criminal act money laundering and
other proceeds from a criminal act, as per Article 273 paragraph 4of the Criminal Code. The amount of the crime and punishment was
less than the original charge).
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1.In the explanation of the Judgement it is stated that thedefendant is guilty because in the period from November 2007
until August 2008, in Skopje Republic of Macedonia, as an
authorized person employed at Capital Conservator Savings
& Loan Limited from New Zeeland, on behalf of the legal
entity, he opened and was the signatory of a non-resident
account in various foreign currencies, among which also the
account USD with Stopanska Banka AD Skopje, through
which, in contravention of the regulations on banking
operations of the Republic of Macedonia according to which
banking activities may be performed solely by foreign and
domestic banks or the subsidiaries thereof that obtained a
permit from the Governor of the NBRM, he performed banking
financial activities and concurrently, on four occasions,
received and took over money in a total amount of $431,943.00
which was transferred from the accounts of Michael S. Krome
with Bank of America and which originated from an act of
crime - fraud against clients from Great Britain who were
mislead by means of a false presentation of facts by the legal
entities KLEIN AND VAN ZANDT regarding the status and
the value of the stock market shares, to the detriment of their
property, whereupon they effectuated payments to escrow
accounts of Michael S. Krome in the USA, from which he
made a payment, while the legal entity Capital Conservator
Savings & Loan took over the funds on the non-resident
account with Stopanska Banka AD Skopje from which, with a
loan alongside the other proceeds, they were transferred to the
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resident account of the domestic legal entity Capital
Conservator DOOEL Skopje. An official copy of said hearing
and judgment are attached hereto as Exhibit .
E. In fact the funds ($431,934.00 USD) used to convict Markovic
and said to have been laundered through CCSL were clean funds
totally unrelated to any illegal activities. As previously stated these
funds had been in the escrow account of MSK wherein he held funds
of multiple clients including CCSLs clients Threlkeld and Bailey as
well as others i.e. Klein and van Zandt. And the funds herein were
not found to come from a criminal act of money laundering, fraud or
any other illegal activity.
50. The events giving rise to the actions of FYROM involved the funds
alleged in paragraph 51 below were initially located, to the best knowledge
and belief of Claimant, at Bank of America NA, Lake Grove, New York, in
escrow accounts of MSK. The funds were held in MSKs escrow accounts
for the benefit of two persons: Clinton Hayes Threlkeld, a United States
citizen, and David Bailey, a British citizen. At that time, both of them were
customers of Claimant and resided in Spain.
51. On September 17, 2008, October 24, 2008, March 19, 2009 and May
$22, 2009, Krome or MSK wired the following amounts in USD currency:
$28,943.00, $3,000.00, $100,000.00, and $300,000.00, respectively, from
MSKs escrow accounts at BOA in New York to the CCSL account at SB.
Krome or MSK wired these funds to CCSLs account at SB to be held in
trust and for the benefit of CCSLs aforementioned clients. CCSL neither
knew Krome nor MSK nor had any type of relations with either of them.
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54. Krome was subsequently indicted in the U.S. District Court for the
Southern District of Florida on counts of Conspiracy to Commit Securities
Fraud, Wire Fraud and Mail Fraud, Securities Violations, Wire Fraud and
Obstruction of Justice. A copy of said Indictment is attached hereto as
Exhibit __.
55. However, the aforementioned wires (totaling $431,494.00 USD) and
funds that passed through CCSL were investigated by the SEC and
seemingly had no connection or relationship to the actions underlying
the Krome indictment, nor were they seized by the SEC or any other
United States law enforcement authorities. To CCSLs knowledge,
said funds were neither connected to any illegal activities nor derived
from illegal sources. They were legitimate funds held in trust by CCSL for
its clients, Clinton Hayes Threlkeld and David Bailey, neither of which to
CCSLs knowledge was investigated nor arrested. To CCSLs best
knowledge, Markovics arrest and subsequent conviction was unrelated to
Kromes indictment.
56. Unfortunately the news the FYROM authorities posted in their
official website that CCSLs director was arrested and convicted for being
involved in illegal activities and money laundering and that CCSL was part
of the chain of the money laundering companies severely affected the way
CCSL operated as a trust company and was forced to shut down its business
and lose clients, bank accounts, the ability to open bank accounts, and creditcard business due to the posting of these events in the official Ministry of the
Interior of FYROM website. Copies of texts from media from the internet
are attached hereto as Exhibit __.
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57. Eventually the monies that were in CCSLs account at SB were
transferred into the CC DOOEL resident account at ESB in accordance
with a loan agreement that was approved by the National Bank of Republic
of Macedonia, Attached hereto as Exhibit __ is a copy of the entire
procedure before the National Bank of Republic of Macedonia. The balance
of the funds that remained in CC DOOELs resident account at ESB was
confiscated by FYROM.
A. THE CLAIMANTSINVESTMENTS IN THE
FORMER YUGOSLAVIC REPUBLIC OF
MACEDONIA
58. While the Convention requires that the dispute arise "directly out of
an investment," it deliberately does not define the term. It is abundantly
clear that Claimant made a substantial commitment of more than
$30,000,000.00 USD and in other currencies through the largest bank within
FYROM territory which affected its economy in a positive and direct
manner and thus creating a substantial significance for FYROMs
development of its economy , a continuing expanding role in the banking
sector of FYROM and attraction of international businesses in FYROM
which has been a long standing goal of FYROMs allure of being a business
friendly nation for foreign companies to operate therein. This type of
investment is contemplated within the ICSID investment parameters and
within the parameters and, more importantly, definition of investments in
Article 1 of the BIT.13 Claimants investment, the funds passing through the
13Theterminvestmentsmeanseverykindofassetandmoreparticularly,thoughnotexclusively.
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non-resident account in SB was movable property and an asset within the
definition of investment of the BIT, Article 1 (a) (I); the said investment
involves a claim for monies and has a great economic value as per Article 1
(a) (III) of the BIT. Claimants investment, per Article 1 (a) (IV) of the BIT,
also includes its good will established by the Claimant (e.g. its brand name
Capital Conservator) while, as alleged above, infusing over $30 million
USD through said account in FYROM economy.
A. Claimant operated its trustee and financial services business
through FYROM via SB for over a two (2) year duration directly
infusing into the FYROM banking sector and economy over $30
million USD; as a result there was between the Claimant and
Respondent a regularity of profit and return, Claimant assumed the
risk of losing its operations within FYROM, and the significance to
the FYROM economy was evident both by the amounts passed
through it and by Claimant operating its business via SB in FYROM
and thus attracting more multinational companies to do the same as
(I) Movableandimmovablepropertyaswellasanyotherrightsinreminrespectofeverykindofasset;
(II) Rightsderivedfromshares,bondsandanyotherkindsofinterestsincompaniesandjointventures;
(III) Claimstomoney,tootherassetsortoanyperformancehavinganeconomic
value;
(IV) Rightsinthefieldofintellectualproperty,technicalprocesses,goodwillandknowhow;
(V) Rightsgrantedunderpubliclaworundercontract,includingrightstoprospect,explore,extractandwinnaturalresources.
SeealsoCHRISTOPHSCHREUER,THEICSIDCONVENTION:ACOMMENTARY(2001).
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Claimant, in effect, was aiding Respondents Business Friendly
country development.14
B. Due to the positive business relationship and circumstances
in FYROM and with SB, Claimant had made plans with
Markovic to form a local company to conduct business as a call
center clearing house to provide consulting services such as due
diligence, know your customer (KYC) and anti-money laundering
review and monitoring and provide said services to local companies
engaged in international business and foreign companies wanting to
invest in FYROM and that the resident company would be an
affiliated company to Claimant. The closing of Claimants account
precipitated the formation and registration of CC DOOEl, a resident
corporation, as it was done to expeditiously transfer funds in order to
operate Claimants business. This business plan was still in place after
the formation of the resident corporation but was completely halted
and interrupted by the actions and measures taken by Respondent. Notonly was the Capital Conservator brand named totally ruined, but
also Claimants director, Markovic, as part of his conditional sentence
in FYROM, would never be allowed back into FYROM.
C. All along Claimant assumed the risk that FYROMs currency
control and regulations could change and Claimants investment
would be diminished to zero. Furthermore, FYROMs regulationswith respect to the movement of monies could have changed due to its
economic and political policies. Additionally, Claimants reliance that
14CSchreuer,CommentaryontheICSIDConvention(1996),11ICSIDRevFILJ316,372.SeealsoCHRISTOPH
SCHREUER,THEICSIDCONVENTION:ACOMMENTARY(2001).Seealsoparagraph58above.
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it could provide the type of trust and financial services it was advised
Claimant could perform in FYROM could change thereby causing
claimant to lose its total investment, its profits and returns. And
finally Claimant assumed a systemic risk of the collapse of
FYROMs entire financial or market system wherein the foreign
exchange rates or implied volatility would change which would affect
the value of Claimants asset held in currency.
B. RESPONDENTS ACTIONS
59. Article 2, of the BIT states that [e]ach Contracting State shall,
within the framework of its laws and regulations, promote economic
cooperation through the protection in its territory of investments of
nationals of the other Contracting State. Subject to its rights of exercise
powers conferred by its laws or regulations, each Contracting State shall
admit such investments.
60. Article 3, of the BIT states as follows:
1) Each Contracting State shall ensure fair and equitable
treatment of the investments of the nationals of the other Contracting State
and shall not impair, by unreasonable or discriminatory measures, the
operation, management, maintenance, use, enjoyment, or disposal thereof
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by those nationals. Each Contracting State shall accord to such investments
full physical security and protection.
2) More particularly, each Contracting State shall accord to such
investments treatment which in any case shall not be less favorable than
that accorded either investments of its own nationals or to investments of
nationals of any third State, whichever is more favorable to the national
concerned.
3) If a Contracting State has accorded special treatment to
nationals of any third State by virtue of agreements establishing customs
unions, economic unions, monetary unions, monetary unions or similar
institutions, or on the basis of interim agreements leading to such unions or
institutions, that Contracting State shall not be obliged to accord such
advantages to nationals of the other Contracting Sate.
4) Each Contracting State shall observe any obligation it may
have entered into with regards to investments of nationals of the other
Contracting State.
5) If the provisions of law of the either Contracting State or
obligations of international law existing at the present or established
hereafter by the Contracting States in addition to the present Agreement
contain a regulation, whether general or specific, entitling investments by
nationals of the other Contracting State to a treatment more favorable than
is provided for in the present Agreement, such regulation shall, to the
extent that it is more favorable, prevail over the present Agreement.15
61. More importantly, Article 6, of the BIT States as follows:
Neither Contracting State shall take any measures depriving, directly or
15SeealsoArticle4oftheBITwhereinitstatesthateachContractingStateshallaccordtonationalsofthe
otherContractingStatewhoareengagedinanyeconomicactivityinitsterritory,treatmentnotlessfavorablethan
thataccordedtoitsownnationals.
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indirectly, nationals of the other Contracting State of their investments
unless one of the following conditions are complied with:
a. The measures are taken in the public interests and under due
process of law;
b. The measures are not discriminatory or contrary to any
undertaking which the Contracting State which takes such measures
may have given;
c. [T]he measures are taken in just compensation. Such
compensation shall represent the genuine value of the investments
affected, shall include interest at a normal or commercial rate, until
the date of payment and shall, in order to be effective for the
claimants, be paid and made transferable, without delay, to the
country designated by the claimants concerned and in the currency of
the country of which the claimants are nationals or in any freely
convertible currency accepted by the claimants.
62. As a Trust and Financial Services Provider, registered and regulated
under the laws of New Zealand, GFTs trust and trust financial services are
the cornerstones of GFTs business. Once FYROM posted the false
allegations in their official government website the damage to GFT was
irreversible and substantial.
63. The actions of FYROMs authorities in arresting GFTs former
director, (BM) Markovic, and subsequently including GFTs name and its
related company names in the official website in the internet and the news
media alleging that Markovic through GFT and its related companies
laundered around $30 million USD, knowing that it was false were
violations of the BIT, international law, and FYROM laws. Neither the
SEC nor any other law enforcement authorities determined that Claimants
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investment in FYROM (e.g. the $30 million USD and the total of the four
(4) wires totaling over $434,000.00 USD) were derived from a criminal
source or were monies derived from money laundering and were never
seized.
64. At the very least FYROM grossly, negligently and in violation of the
BIT and FYROM law posted the above statements as it knew that neither
GFT nor Markovic laundered around $30 million USD. As importantly,
Respondent also reported and used the amount of the four (4) wires,
$431,494.00 USD to, again, unlawfully convict Markovic and harmfully
affect Claimants trust and trust financial services and destroy its brand
name, CCSL.
65. Respondents actions as alleged in paragraphs 62 through 64 violate
Articles 2, 3, 4, 5 h)16
, and 6 of the BIT between the Netherlands and
FYROM.
A. The information that was spread in the media regarding
money laundering in an amount of $30 million and that stillcirculates today with respect to CCSL has caused severe
harmful consequences to the Claimant. Respondent either
intentionally or negligently harmfully acted against the
Claimant by initiating a criminal procedure for a severe crime
against Claimants director wherein all the funds said to be
illegal were not, in fact, of a criminal nature, but were clean
funds and for alleging that such a high amount of money,
$30 million, was derived from fraud and money laundering
16Article5oftheBITstatesthatTheContractingStatesshallguaranteethatpaymentsrelatingtoaninvestment
maybetransferred.Thetransfersshallbemadeinafreelyconvertiblecurrency,withoutrestrictionordelay.Such
transfersincludeinparticularthoughnotexclusivelyh)compensationincaseofexpropriationpursuanttoArticle
6.
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and directly caused substantial harmful consequences and
damages to Claimant and its investment in FYROM.
66. Neither the said wires nor any funds that were investigated by the
SEC had any connection or part of the Krome indictment, neither were they
seized by the SEC nor any other United States law enforcement authorities.
Said funds were neither connected to any illegal activities nor derived from
illegal sources. In fact, not even the FYROM authorities seized these funds.
Instead, they were legitimate funds held in trust by CCSL for its clients,
Clinton Hayes Threlkeld and David Bailey, neither of whom was indicted,
sued, arrested, prosecuted or otherwise charged by the SEC or any other
law enforcement authority.
67. RespondentviolatedArticle2oftheBITbynotprotecting
ClaimantsinvestmentinFYROM,i.e.ClaimantsoperatingaccountatSB
andthefundsthatpassedthroughsaidaccount. As stated above the
Respondent acted contrary to said Article by completely doing the opposite
and not protecting Claimants investment as Respondent illegally deprived
Claimant of its investment. Claimant could not continue to operate in
FYROM and lost its immediate business plan as Markovic could never
return to FYROM and CCSL and its employees and directors had and still
have a well grounded fear not to go into FYROM for fear of reprisals (e.g.
being falsely arrested and falsely charged like Markovic).
68. More particularly, Respondent has violated Article 3 subsection 117 as
Respondents actions described above clearly show that it did not treat
171) Article 3, Each Contracting State shall ensure fair and equitable treatment of the investments of the nationals
of the other Contracting State and shall not impair, by unreasonable or discriminatory measures, the operation,
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Claimants investment fairly and equitably. More importantly, Respondent
impaired, by both unreasonable and discriminatory measures, Claimants
operation, management, maintenance, use and enjoyment and disposal of
GFTs investment in FYROM. In effect, Respondent directly, unreasonably
and discriminatorily interfered with GFTs operations and due to FYROMs
continuous actions and measures the damages incurred by Claimant
continued for over two (2) years and still continues today. In fact, the
domino effect of Respondents actions (e.g. posting the heretofore
mentioned media release in its Official Ministry of Interior website) in the
various media outlets are still affecting Claimants ability to open operating
bank accounts as Claimant cannot meet AML and KYC standards in todays
banking and financial industry.18
69. Respondent also violated Article 619, of the BIT by posting the above
referenced information in its official website and in the media; in effect,
Respondent took measures which directly and indirectly deprived
Claimant of its investment in FYROM. After Markovics arrest and theposting of the statements regarding Markovics and Claimants involvement
in alleged money laundering Markovic was ordered to leave FYROM and
management, maintenance, use, enjoyment, or disposal thereof by those nationals. Each Contracting State shallaccord to such investments full physical security and protection.18
Justrecentlyon30June2012anarticlewaspostedonthenakedcapitalism.comwebsiteparrotingRespondents
claimsthatClaimant,itsrelatedcompanies,anditsformerdirectorlaunderedover$30BillionUSDandthat
moniesweretransferredwithouttheappropriatedocumentation;wheninfacttheNationalBankoftheRepublic
ofMacedoniaapprovedanyandalltransfers.SeeExhibit__.19
Article6states:NeitherContractingStateshalltakeanymeasuresdepriving, directlyorindirectly,nationalsof
theother
Contracting
State
of
their
investments
unless
one
of
the
following
conditions
are
complied
with
a. Themeasuresaretakeninthepublicinterestsandunderdueprocessoflaw;
b. ThemeasuresarenotdiscriminatoryorcontrarytoanyundertakingwhichtheContractingStatewhich
takessuchmeasuresmayhavegiven;
c. [T]hemeasuresaretakeninjustcompensation.Suchcompensationshallrepresentthegenuinevalue
oftheinvestmentsaffected,shallincludeinterestatanormalorcommercialrate,untilthedateof
paymentandshall,inordertobeeffectivefortheclaimants,bepaidandmadetransferable,without
delay,tothecountrydesignatedbytheclaimantsconcernedandinthecurrencyofthecountryofwhich
theclaimantsarenationalsorinanyfreelyconvertiblecurrencyacceptedbytheclaimants.
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never return, and Claimant was completely precluded from operating in
FYROM as its employees and directors had a well grounded fear that
FYROM would retaliate against them as well and therefore could not go into
the FYROM.. Due to the said actions of Respondent, Claimants business,
which was growing by leaps and bounds, was reduced to just being barely
able to operate and suffered substantial losses and continues to lose monies
to this date. More particularly, the business plan between Markovic and
Claimant was totally foiled. The net effect of FYROMs actions was that it
expropriated Claimants investment therein. See Article 5 of the BIT.
70. Respondents continued actions and measures with respect to GFT
were not made under the best interests of the public since the actions taken
by FYROM had absolutely nothing to do with the public interest but with
Claimant, its director and its related residential company. Assuming
arguendo, that there is a public interest component to Respondents actions,
said actions went against the public interest as FYROM, in effect, without
due process of law, forced Claimant out of FYROM thereby directlyaffecting FYROMs economy and its banking and financing sector in that
the large sums of Claimants continued investments in FYROM were
extremely advantageous to FYROMs economy and thus the public.
71. Respondents measures were completely discriminatory in nature to
such an extent that GFT to this date cannot use its brand name Capital
Conservator as if it does it would have to shut down its operations due tothe fact that it cannot obtain an operating account to conduct its trust and
trust financial services due to the fact that under the Capital Conservator
name it cannot meet anti- money laundering standards and know your client
standards of banking institutions around the world.
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B.CONSEQUENCES OF RESPONDENTS ACTIONS
72. Claimants main source of revenue was derived from incoming
and outgoing wire services exclusively through international banks
that are licensed and regulated and that have SWIFT accounts. Prior
to the actions and measures of the Respondent, wire fees collected were
growing at an average rate of 93.63% per quarter. In the second quarter of
2009, which amounted to a 10 week quarter due to the account closure,
which was, to the best knowledge and belief of the Claimant, caused by
FYROMs orders and effectuated by SB, CCSL collected $133,947.25 USD
in wire fees. Once operations resumed in the name of a different company
at a different bank in a different country, there was a pent-up demand which
kept the wire fees collected near the same figure for the next few quarters.However, the damage done to CCSLs trust and trust financial services
severely hampered new client acquisition and existing clients who had lost
faith in the company began looking for other alternatives. These two
elements combined to devastate CCSL. First, and most obvious, was the
fall-off in new client acquisition. The average growth per quarter of new
account registrations was 37.92% in the 6 quarters leading up to the account
closure. However, immediately following the actions of SB, new account
registrations went down by 50% in quarter 3 of 2009 and fell another 25%
in quarter 4 of 2009. By the second quarter of 2010 - not even one full year
after the closing of the account new account registrations were down
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93.5% from quarter 2 of 2009 136 new accounts versus 2084 the year
prior. Not surprisingly, CCSLs loss of the ability to receive and send
wires for 6 weeks, and then the sudden change to a new name (necessary to
operate), a new country, and a new bank severely diminished the trust
existing clients had as well. As a result, as soon as existing clients were
able, many stopped using CCSL and its related companies. The first two (2)
quarters after the account closure saw diminished growth, and by quarter 2
of 2010, within one year after the SB closure, revenues were down 42% year
over year $77,000.00 USD versus $133,000.00 USD the year prior. One
year after that, quarter two (2) 2011 wire fees collected were only
$35,000.00 USD, off 74% of the quarter immediately prior to SBs actions.
73. Subsequently to the Claimants account closure, its funds were
deposited at ESB and were then temporarily transferred to First Fidelity
Trust AGs (FFT) account in Commerz Bank. FFT is a third-party Swiss
Trust Company. In June 2009, CCSL purchased SPT Swiss Private Trust
1975 AG, which was an existing Swiss Trust company for which anaccount was opened at Commerz Bank approximately thirty (30) days later
in order to send and receive bank wires on behalf of CCSLs clients.
CCSLs account was closed by Commerz Bank in January 2010, due to
FYROMs illegal arrest of its director and the allegations made by FYROM
that Claimant was involved in money laundering of $30 million USD and its
funds were of criminal origin.
74. Ultimately, CCSL was forced to use its credit card money
management accounts at CreditCard Services SAL, in Lebanon, in place of
a normal bank account, in order to continue to send and receive wires on
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behalf of its clients. In April, 2010, that account and the credit card program
were closed, again, due to the aforementioned actions of FYROM.
75. In May 2010, CCSL was able to open an account at CreditWest Bank
in the Turkish Republic of Northern Cyprus for incoming and outgoing
wires but eventually CreditWest Bank severely restricted CCSLs ability to
send outgoing wires; once again due to FYROMs actions regarding the
arrest of CCSLs former director, Markovic, and the statements of alleged
illegitimate sources of CCSLs funds.
76. In June 2010, CCSL had to change its name to GFT in order to
conduct all of its operations because, as a result of FYROMs actions, other
banks would not open accounts like the one at SB with the CCSL
name, or any company name with the words Capital Conservator in
it. GFT was and remains relegated to operating only a few investment and
brokerage accounts on behalf of CCSLs clients, having transferred all of its
credit card, and wire sending and receiving operations to an affiliated
company.
77. In August 2011, GFT and its affiliate companies were able to open
accounts at Piraeus Bank in Cyprus. At the onset of this new business
relationship between Piraeus Bank and GFT, problems again arose as a
result of FYROMs actions described above, and the accounts of GFT and
its affiliates were restricted with the intent to close all the accounts. In
addition, every transaction was manually inspected, costing GFT 250.00
Euros per month for each companys account.
78. Eventually GFTs accounts were restored to full normal status, and it
has since been operating as it did while it had its accounts at SB. However,
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as discussed above, as a result of the unlawful closing of CCSLs account,
it took CCSL over two years to finally find a commercial or universal bank
that would allow CCSL to provide the services CCSL is legally authorized
to provide under New Zealand law.
A. However once again GFTs operating account has been closed. As
of 12 April 2012 Piraeus Bank closed GFTs operating account; and
once again GFT finds itself searching for other banks that will allow
and accept the trust and financial services it provides to its customers.
To the best knowledge and belief of the Claimant the actions and
measures undertaken by Respondent were part of the cause
of this closure.
B. The actions taken by Respondent have taken such a strong
domino effect that to the current date Claimant is still experiencing
problems using its brand name, Capital Conservator or any of its
related or affiliated company names to open operating bank accounts
to conduct its trustee and financial service provider services.
79. FYROMs actions, as stated above, directly resulted in the loss to
CCSL of wire fees, opening account fees, credit card purchases, and credit
card funding fees. They have also resulted in significant additional
operations costs. They have resulted in loss of the ability to meet
established due diligence standards in the trust, finance, and banking
industries in the United States and around the world to the extent that it has
been nearly impossible to obtain new operating accounts for CCSL.
FYROMs actions have resulted in a loss of existing and future clients. And
very importantly, CCSL cannot, to this day, maintain an operating account
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in its own name due to FYROMs actions. As such, the conversion rate of
prospective clients into actual clients has diminished precipitously. This is
because, while the applicants apply for a trust account under the Capital
Conservator brand name, they are subsequently given wiring instructions
to send their trust account funds to an account with an entirely different
name, as Citibank and HSBC, among others, block all wire transactions with
the words Capital Conservator in them, even if said name is placed in
SWIFT Field 70, the sender reference line which identifies for the recipient
the purpose of the payment. Thus, CCSL cannot maintain an operating
account in its brand name as it had to change its name to GFT. But for
all of the actions of FYROM described above, Claimant would not have
incurred any of the damages as alleged herein.
V. CLAIMS
80. Claimant realleges paragraphs 60 through 80 as if fully set forth
herein as they form the part of Claimants Claim.
81. Respondent also violated FYROM laws as follows: Pursuant to
Article 9, Contract Law/Law on Obligations Everyone is obliged to
abstaining from activity that could cause damage to another. Additionally,
Pursuant to Article 187 paragraph 1 of the Contract Law/Law on
Obligations A person who undermines another persons honour and states
or conveys false allegations regarding the past, the knowledge, the
capability thereof or any other aspect thereof, and who knew that such
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allegations are false and thereby causes a material damage, shall be obliged
to compensate for the damage caused."
82. Respondent knew that the amount being investigated by the SEC was
not $30 million USD as the evidence presented in the criminal case VIII
KOK No. 73/09, shows that a letter from the Securities and Exchange
Commission of the Republic of Macedonia to the Office for Prevention of
Money Laundering and Financing Terrorism of the Republic of Macedonia
dated 24August 2009, references a letter for the US Securities and
Exchange Commission to the Securities and Exchange Commission of the
Republic of Macedonia, which had been submitted prior to the
commencement of the investigation proceedings, and the amount mentioned
therein was not $30 Million USD. The amount used by FYROM to ruin
GFTs reputation was obtained from SB as that is the approximate
investment GFT made through SB and SB was the only entity apart from the
National Bank of Republic of Macedonia who knew the amount of
Claimants investment. Furthermore, the statements of the allegedlydeceived shareholders of the legal entity GREEN ENERGY LIFE in the
USA also support these allegations. It is more than clear that the Defendant
knew that the amount in question was not $30 million USD.
83. Pursuant to the Contract Law /Law on Obligations Article 142,
damage constitutes the reduction of another partys property (regular
damage) and prevention of the increase of such property (lost benefit).Pursuant to Article 178 paragraph 3 of the Contract Law of the Republic of
Macedonia, upon the assessment of a lost benefit, consideration should be
made of the benefit that would be reasonably expected based upon the
regular course of activities or based upon special circumstances, the
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acquisition of which was prevented by a harmful action, in this case by the
Defendant, the Republic of Macedonia.20
84. Pursuant to Article 189 paragraph 3 Contract Law /Law on
Obligations of FYROM, for undermining the right to a good reputation
and other personal rights of legal entities, the Court, if it finds that the
severity of the breach and the circumstances in the specific case provide a
sufficient justification, may decide to order the payment of a monetary
amount regardless of the damage indemnification, as well as in the absence
thereof. Accordingly, the Claimant requests the amount of $80 million USD
of the non-material damage.
85. Pursuant to Article 192 of the Contract Law /Law on Obligations
of FYROM, the Court, upon the request of the damaged party, shall decide
on a reasonable monetary amount also for a future non-material damage, if
according to the current course of events it is reasonable to anticipate that
the damage would endure also in the future.
A. The measures and actions taken by the Respondent are
continuing and ongoing since as of this date GFT cannot use its brand
name Capital Conservator and therefore it is more than reasonable
to anticipate that Claimants damages will endure and have endured in
the future. Accordingly, Claimant requests the amount of $70 million
USD in future non-material damage.
86. As heretofore stated, in the Summer and Fall of 2009 FYROM
wrongfully arrested, detained and convicted an officer of the Claimant and
20DuetoRespondentsactionsinunderminingClaimantstrustandtrustfinancialservicesClaimantsclientsand
thepotentialclientsthereoflosttheirconfidenceinClaimantasatrustcompany.Manytransactionswereblocked
bybanksandother institutions.Furthermore,thebankswithwhichtheClaimanthadaccounts,throughwhich it
providedservicesto itsclientsandotherfinancialinstitutions,decidedtocease itsbusinessrelationshipwiththe
Claimant. In addition, thebankswithwhich theClaimant tried toopenbank account in order tooperate and
pursueitsbusinessactivityrefusedtoaccepttheClaimantasaclient.
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posted false and misleading information regarding the claimant and its
related companies in its official website and released same to the media
which caused irreparable damage to the Claimant. Claimant had entered
into the rapid growth stage of start-up companies which will be
demonstrated herein, and that halt in business operations caused solely
by the actions of the FYROM amounted to huge and substantial losses. For
over two (2) years, Claimant has been unable to operate profitably and at
times, unable to operate at all. The damage done by the reporting of the
money laundering allegations about Claimant and the conviction of a
director of the Claimant has led to consistent denial of service in the
Claimants main business, as a trust and trust financial services provider.
Dozens of banks have denied Claimant simple accounts. Even when
Claimant has been granted accounts, large clearing banks have refused to
send wires on behalf of Claimant and its related companies effectively
shutting down the business. This not only stopped the growth Claimant had
been experiencing, but actually reversed its growth trends. With the
damaged made to the Claimants trust and trust financial services
culminating in the inability to service clients, the last two to three years have
seen consistent losses.21
87. The violations of Respondents own laws with respect to Claimants
claim are all within the ambit and definition of investment within the
Agreement and therefore must be taken into account in calculating damages.
88. The financial losses incurred by CCSL under FYROM law,
international law and the BIT can be broken down into a few categories and
due to the circumstances and facts of this case the only way to fairly and
21SeeAppendix__
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justly determine valuation and damages is to include moral damages such as
material and non-material damages and lost profits and returns:
Wire Fees
Account Opening Fees
Credit Card Purchase
Credit Card Funding Fees
Ancillary operations
Over-Staffing
Attorney Fees
These losses will be shown and explained in Appendix __.
89. The measures described above, implemented by FYROM and
possibly by other organs of the Macedonian State and attributable to the
Respondent under international law, have caused substantial damages to the
Claimant as described above. The amount of these damages will be
documented in detail by competent financial evidence in this proceeding.
VI. REQUEST FOR RELIEF
90. The facts demonstrate that the actions and measures taken by theRespondent within the FYROM website and news media worldwide
disseminating false and misleading information damaged Claimants trust
and trust financial services within the trust banking and financial business
arena worldwide and continues to so to this date.
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91. For the foregoing reasons, the Claimant respectfully request that a
Tribunal be constituted in accordance with the Convention and the Rules to
resolve the claims set forth in this Request for Arbitration,22 and that the
tribunal render an award in favor of the Claimant as follows:
A. Declaring that the Respondent has breached the BIT
i. by expropriating the Claimants investments without
complying with the requirements of the BIT, including
payment of prompt, adequate and effective compensation;
ii. by failing to accord fair and equitable treatment to the
Claimants investments;
iii. by taking unreasonable or discriminatory measures that
impaired the operation, management, maintenance, use,
enjoyment or disposal of the Claimants investments; and
iv. by discriminating against the Claimant and in favor of
other nationals by using Claimants name in FYROMs official
website regarding the money laundering activities while
using GFTs former directors initials BM in said website
and;
v. by failing to observe obligations entered into with respect to
Claimants investments under the BIT;
B. Declaring that the Respondent has breached customary
international law
i. by violating the minimum standard of treatment of foreign
investors; and
22The Claimant hereby reserves its right to amend or supplement this Request for Arbitration.
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ii. by expropriating the Claimants investments without
observance of due process and payment of prompt, adequate
and effective compensation;
C. Declaring that the Respondent violated FYROMs own laws such
as follows: Articles 9,187, 142, 178, 189, 192 and their respective
subsections as alleged herein above;
D. Ordering the Respondent to pay to the Claimants full reparation in
accordance with the BIT and customary international law,
including compensation for damages sustained as a result of the
aforesaid actions and measures of the Respondent, in an amount of
$451, 000,000.00 USD, or the amount established in the proceedings,
plus compound interest thereon in accordance with applicable law and
gross up of any taxes that may be imposed by the Respondent on or
affecting such compensation;
i. The total damages, consequential and moral non-material and
future non-material damages based on the breaches of the
FYROM laws, international law and violations of the
Agreement, conservatively calculated are
$601,000.000.00 USD, and is hereby requested as total
damages in this case.23
E. Ordering the Respondent to pay all costs and expenses of this
arbitration proceeding, including the fees and expenses of the tribunal
and the cost of legal representation, plus interest thereon in
accordance with applicable law;
F. Granting pre-award compound interest on all compensatory
damages from the date of Respondents actions to the date of issuance
23SeeAppendix__.
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of the award and post-award compound interest on all amounts
awarded from the date of the award to the date of payment;
G. Order Respondent to remove the statement with respect to
Claimant being involved in any type of money laundering or criminal
activity and post the fact that Claimant was not involved in money
laundering activities and that Claimant, as Respondent officially
stated in Court, fully cooperated with the SEC and was not involved
in any criminal activities .
H. Such other or additional relief as may be appropriate under the
applicable law or may otherwise be just and proper.
Respectfully submitted,
Juan F Torres III, Esq.Juan F Torres III, P.A.4900 Oleander AveFort Pierce, Fl 34983(772)652-5200 (telephone)(772) 293-9017 (telefax)
Petro Janura, Esq.Janura Law OfficeOrce Nikolov 94Skopje, Macedonia
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