CROATIAN POLICE PROBE INTO "OPEN SOCIETY" TRANSACTIONS

ZAGREB, Dec 23 (Hina) - The Croatian Interior Ministry said in a statement on Monday that criminal proceedings had been initiated against the Open Society Institute foundation on the suspicion of illegal financial operations. The criminal proceedings and an audit were conducted between 12 and 23 December by the Interior Ministry's economic crimes department, the financial police and the Finance Ministry's foreign exchange inspectorate. The inquiry revealed that on the orders of persons in charge, the foundation made out dual monthly pay sheets in kunas and dollars between 1 December 1995 and December 1996. A smaller part of wages was paid in kunas through employees' current accounts, and this part was subject to taxes and contributions, while a larger part was paid in dollars in cash. The statement said that 253,156 US dollars was paid out from "black" pay lists and that unpaid taxes and contributions for the audited period of 12 months totalled 2,667,432.27 kuna. Because of the foundation's evasion to pay taxes and contributions to the employees' wages, the financial police would take legal action against those responsible. The foreign exchange inspectorate also announced legal proceedings because it found that the Open Society Institute failed to operate in line with the Trade Act and the Foreign Exchange Act, the statement said. (hina) vm 232151 MET dec 96