19/01/2024
Responding to the latest unilateral measures taken by the Provisional Institutions of Self-government in Kosovo and Metohija (KiM) which are de facto aimed at preventing the Serbian dinar from being brought into KiM and used for the performance of cash payment transactions as of 1 February 2024, which practically means that it would be impossible to pay out wages, pensions, social benefits and other income to the Serbian population in dinars, the NBS wishes to inform the public of the following:
The announced measures, which are in contravention not only of the fundamental international standards of finance and banking, but also of the agreements set up so far and the manner in which dinar cash transactions have been performed for years, are aimed exclusively at making it impossible for citizens and business entities to earn basic income in dinars in Kosovo and Metohija, thereby threatening the survival of, primarily, the Serbian population. In a completely arbitrary, random and discriminatory fashion, the announced measures regulate cash payment transactions and change the manner in which the transport of dinars has functioned for years, practically disabling cash payment transactions in dinars.
Allegedly, the key reason for the new measures is that the euro will from now on be used as the “official currency” for cash payment transactions in Kosovo and Metohija, which will effectively make the use of the dinar impossible, whereas it has so far been freely used in Serbian settlements. We also note that the Provisional Institutions of Self-government in Kosovo and Metohija are in no way authorised to declare the euro (or any other foreign currency) as the only allowed currency in the territory of KiM, nor can the euro be a legal tender in KiM as the NBS is the only competent issuing institution authorised to decide on the use of the dinar in the entire territory of the Republic of Serbia. When it comes to the official currency and legal tender in Kosovo and Metohija, it is important to note that at this point there is no other officially established currency in KiM, nor is this the euro. This is confirmed both by the European Union and the European Central Bank in their publicly available information because the euro may not be issued or introduced as a currency by countries which are not members of the European Union and which do not meet the Maastricht criteria for joining the euro area. Moreover, it is clearly stated that the euro is not a legal tender in Kosovo and Metohija, but is merely treated as such by (a part of) its population The euro outside Europe (europa.eu). Consequently, the use of the dinar in Kosovo and Metohija may not be banned abruptly and without any grounds.
In addition, the provision that, instead of registration, a licence will now be required each time currency is brought across the administrative line, which can only be issued to a financial institution holding the required authorisation of Priština, is contrary to all comparative practice and unprecedented in any financial system that is even remotely aligned with international standards. This is particularly uncommon in territories where no local currency is issued and, hence, no monetary policy instruments are available. It is needless to stress that the above Decree of the Provisional Institutions was adopted away from the public eye, without a public discussion involving even the Albanian population, let alone the representatives of Serbs in Kosovo and Metohija, while entirely ignoring the process of the dialogue.
Moreover, the proposed solutions of the disputed Decree stipulate that other non-euro currencies may be used in KiM only as a store of value in physical form or in bank accounts in non-euro currencies, for making international payments in non-euro currencies and for currency exchanges, as well as that currency exchange may be done in KiM only through institutions licensed by the Provisional Institutions of Self-government in KiM. This practically prohibits the use and availability of dinars to KiM citizens who receive pensions, wages and social benefits in dinars, and makes it impossible for them to withdraw dinars from ATMs, have money paid to them directly or at the tellers’ in post offices and financial institutions, as well as prevents transactions between citizens and business entities in dinars. The aforementioned solutions, if implemented, will undoubtedly lead to the deterioration of the position of the Serbian population and place them under additional pressures, making it impossible to pay out their wages, pensions and social benefits. As the ultimate consequence, it will not be possible for the Serbian community to live and work in KiM. At the same time, there is no actual need, created by any objective circumstances, to change the practice that enables payments to natural and legal persons who have a need for dinars, and whose sources of income and business are in dinars.
In connection with the alleged need to control money flows and prevent money laundering and terrorist financing, we especially point out that the process of bringing dinars into KiM is completely transparent and subject to control, and has unfolded smoothly for years. The relevant authorities of the Republic of Serbia, as well as the so-called Provisional Institutions in Kosovo and Metohija, are well aware of this given that each individual transfer and the amount of dinars is recorded on the administrative lines and that transport is provided by a licensed company under the supervision of Priština. Therefore, when it comes to the risk of non-transparent entry and misuse of dinars, the truth is that this risk does not exist and was eliminated by earlier agreements that are now being unilaterally cancelled by Priština’s measures.
Finally, we note that this is not only a unilateral, illegal monetary measure that violently changes the practice of performing payment transactions for persons whose sources of income and business are in dinars, but also a measure whose application is a direct threat to the existence of the Serbian population and aims to drive more Serbian people from KiM. At the same time, there is no justifiable reason why cash payments in dinars should not continue to function in the same way as they have functioned for years.
The NBS, in cooperation with the competent institutions of the Republic of Serbia, is undertaking all the necessary measures within its scope of competence to prevent the application of the aforementioned Decree and protect the Serbian people in KiM. The NBS believes that the discriminatory and outrageous measures introduced by the Provisional Institutions in Priština must be repealed immediately in order to enable the smooth transport and distribution of dinars through financial and other institutions that pay out dinars through their tellers and ATMs, and to prevent the denial of basic conditions for life of the Serbian population in Kosovo and Metohija.
Governor's Office
