The trial chamber ordered that they be immediately released from the Scheveningen detention centre.
In their closing arguments in January, the prosecution asked that Stanisic and Simatovic be sentenced to life imprisonment.
The ICTY found by majority vote that Stanisic and Simatovic had no intent to contribute to a joint criminal enterprise aimed at removing the majority of non-Serbs from large parts of Croatia and Bosnia between 1991 and 1995.
Under the indictment, apart from Stanisic and Simatovic, the enterprise comprised former Yugoslav President Slobodan Milosevic and former wartime Bosnian and Croatian Serb leaders Ratko Mladic, Radovan Karadzic, Biljana Plavsic, Milan Martic, Goran Hadzic and Milan Babic, Serbian Radicals leader Vojislav Seselj, and militia commander Zeljko Raznatovic aka Arkan.
The majority of the Trial Chamber, Judge Picard dissenting, acquitted Stanisic and Simatovic of all charges, presiding Judge Alphons Orie said in the UN tribunal's courtroom in The Hague.
The two accused were charged with having directed, organised, equipped, trained, armed and financed units of the SDB which murdered, persecuted, deported and forcibly transferred non-Serb civilians from Bosnia and Herzegovina and Croatia between 1991 and 1995.
The Prosecution alleged that the two accused participated in a joint criminal enterprise (JCE), the objective of which was the forcible and permanent removal of the majority of non-Serbs from large areas which were under the control of Serb paramilitaries, supported by the then Yugoslav People's Army (JNA) at the outbreak of the wars in Croatia and Bosnia and Herzegovina.
According to a press release on the tribunal's web site, "the Chamber today found that those units committed the crimes of deportation, forcible transfer and murder at numerous locations in those two countries, and that they constitute persecution as a crime against humanity."
"However, the Chamber found that Stanisic and Simatovic cannot be held criminally responsible for these crimes."
"After analysing evidence, the majority, Judge Picard dissenting, was unable to conclude that the accused shared the intent to further the common criminal purpose of the JCE. The Chamber also found that it was not proven beyond reasonable doubt that Stanisic or Simatovic planned or ordered the crimes. With regard to the allegations of aiding and abetting, the majority determined, Judge Picard dissenting, that in the instances that the two accused rendered assistance to the special units, this assistance was not specifically directed towards the commission of crimes," according to the press release on the ICTY web site.
The trial chamber found beyond reasonable doubt that paramilitary troops mentioned in the indictment, including the so-called Red Berets and the police of Serb rebel authorities in Croatia, the Serb volunteer guard and the notorious Scorpions, perpetrated crimes including persecution, murder, deportation and forcible transfer with discriminatory intent.
The presiding judge said, presenting the summary of the judgement, that victims were civilians, most of whom non-Serb locals, and that considering that crimes were committed throughout the Indictment area over the course of many years, "the Chamber found beyond a reasonable doubt that there was a widespread attack directed against the non-Serb civilian population" in the Serb-controlled areas in Croatia and in "Indictment municipalities in Bosnia-Herzegovina", for instance in the northern and eastern parts of that country from 1991 to 1995.
All this was described as crimes against humanity in the judgement summary.
"The Chamber also received evidence relating to the departure of between 80,000 and 100,000 Croats and other non-Serb civilians from the SAO Krajina (Croatia's areas held by Serb rebels) in 1991 and 1992. The Chamber found that the people fleeing did so as a result of the situation prevailing in the region, which was created by a combination of the following factors: attacks on villages and towns with Croat population; killings; use of human shields; detention; beatings; forced labour; sexual abuse and other forms of harassment of Croat persons; and looting and destruction of property."
The majority in the Trial Chamber, with Judge Picard dissenting, "allowed for the reasonable possibility that Stanisic's intent in relation to the Unit, including the training of other Serb forces, the SAO Krajina police, the SDG, and the Skorpions, was limited to establishing and maintaining Serb control over large areas of Croatia and Bosnia-Herzegovina."
"Based on the foregoing, the majority, Judge Picard dissenting, could not conclude that the only reasonable inference from the evidence on Stanisic’s actions was that he shared the intent to further the common criminal purpose of forcibly and permanently removing the majority of non-Serbs from large areas of Croatia and Bosnia-Herzegovina, through the commission of murder, deportation, forcible transfer, and persecution from at least April 1991 through 1995."
The chamber concluded that although they knew of some crimes, Stanisic and Simatovic could not be held responsible for them.
The majority in the Trial Chamber did not find that the role of the two accused was to provide "channels of communication" between the then Serbian leadership, including ruler Slobodan Milosevic and other members of the criminal enterprise throughout the Indictment period.
As for the war atrocities committed in the eastern Croatian town of Vukovar after it fell in the hands of the Serb forces in mid-November 1991, "the majority, Judge Picard dissenting, considered that Stanisic’s action in relation to Vukovar could reasonably be interpreted as support for a successful military takeover of Vukovar."
As for a training camp in Golubic, Croatia for Serb forces deployed in war operations, "the Chamber found that the training at Golubic was of a military character and included weapons and ambush training, as well as the treatment of prisoners of war and the treatment of civilians in armed conflict."
"A total of between 350 and 700 members of the SAO Krajina Police and the SAO Krajina territorial defence were trained at Golubic between April and August 1991. Men who had trained at Golubic set up further units and trained other people in the SAO Krajina. They also participated alongside Simatovic, Captain Dragan, and Zivojin Ivanovic in operations in the SAO Krajina between June and August 1991," reads the judgement summary.
After the former Yugoslav Army chief of staff Momcilo Perisic was acquitted of responsibility for the shelling of the Croatian capital of Zagreb, Stanisic was the only office-holder from the Serbian leadership in the 1990s who was on trial before the ICTY whose indictment included counts referring to war crimes in Croatia.
Stanisic and Simatovic were handed over by Belgrade to the UN tribunal in The Hague in 2003. They pleaded not guilty at their initial appearance before the tribunal that year.