The study examines the field of state succession, with a particular emphasis on the permanently topical and often contentious issue of succession to debts. The term state succession refers to the replacement of one country by another with respect to sovereignty over a territory, and thus to the transfer of the rights and obligations from a predecessor state(s) to the successor state(s) in the same territory. Always tied to a certain territory, state succession is, first and foremost, a territorial category. What is equally significant is that the law of state succession is part of international law and as such dispositive in nature. Therefore, state succession is primarily a matter of agreement, but only if the latter can be reached. If not, international law steps in. When it comes to international law, the distinction between the established rules, i.e. rules in force (de lege lata) and the emerging rules (de lege ferenda) holds particular relevance.
State succession and the significance of its connection with territory (the so-called territorial principle), particularly as regards the succession to the former SFRY is the common thread of this study. A special emphasis is given to the issue of succession to state property, i.e. with an equal consideration of both immovable and movable property – assets as well as liabilities. State succession is somewhat analogous to inheritance law as the term "state property" includes not only assets but also liabilities, both of which are transferred to the heir/successor in the event of succession.
Indeed, aspirations for the separate consideration of assets (immovable property and tangible assets) and liabilities (debts, securities and guarantees) have always existed, notwithstanding that international law is clear on the matter. This issue arose after the disintegration of the SFRY when, having succeeded to the immovable and movable property, the new countries in the former Yugoslav territory – Bosnia and Herzegovina, Croatia, Macedonia, the FRY and Slovenia – encountered a "problem" (when, in fact, there was no problem): "Who is to assume the guarantee of the former Federation for the foreign currency savings deposited with Ljubljanska banka in Zagreb and Sarajevo in the territories of the new states?"
As early as 2001, the successor states of the former SFRY signed the Agreement on Succession Issues which resolves most succession issues but unfortunately fails to tackle the issue of the former Federation's guarantee for foreign currency deposits.
Nonetheless, the Agreement does contain an unambiguous provision: foreign currency issues shall be negotiated among the successor states. The negotiations should take place under the auspices of the Bank of International Settlements in Basel, and the time period for them is described as "without delay". Given that the implementation of this provision has been delayed for an entire decade, the successor states' willingness to resolve the issue can certainly be questioned.
This study does not set out to solve this undoubtedly challenging problem (given that the successor states have failed to do so in the last 20 years and that none except Slovenia have shown any will to negotiate in the 10 years since the Agreement on Succession Issues was signed in 2001); however, it is reasonable to assess the legitimacy of the Republic of Slovenia's persistent demands for the territorial principle to be applied at a time when the Republic of Croatia (and Bosnia and Herzegovina) just as persistently reject such a solution.
The study clearly confirms that international law provides the only correct solution to the aforementioned issue, and that any other solution would only be applicable had this not been a case of succession following the disintegration of the SFRY. On the other hand, the territorial principle is nearly always applied, as testified by state succession in the cases of the SFRY, the Czechoslovak Socialist Republic, GDR/FRG and the USSR.
The study affirms the basic message of international law, especially with regard to the inseparability of assets and liabilities, even though the idea is already communicated by the VC-1983, which might at first seem obsolete for failing to include the latest disintegration instances, namely the SFRY, the USSR, the Czechoslovak Socialist Republic and GDR/FRG. Nevertheless, there is no strong need for a new (3rd) convention on succession as the five sources of international law (treaties, international legal practice, general legal principles of civilised nations, case law and legal science) provide sufficient criteria to settle any succession case, even when agreement cannot be reached.
international law, succession of states, territorial principle, state property, state debt, international treaties, International Law Commission, Vienna Conventions on Succession, United Nations, European Court of Human Rights