A retired Croatian general has pleaded not guilty to charges that he seized gems worth four million euro to be used in a sanctions-busting wartime arms deal in the early 1990s.

The trial against Vladimir Zagorec, a deputy defence minister at the time, opened on November 21 2008 in Zagreb. He faces charges of allegedly abusing his position and authority.

Prosecutors say he seized diamonds, rubies and other jewels, allegedly used as collateral for the purchase of weapons during the early stages of the 1991-1995 war against ethnic Serb rebels, when leaving the ministry in 2000.

At the time, Zagorec was close to late nationalist president Franjo Tudjman.
 
Zagorec has an estimated fortune of 26 million euro and had been working as a property developer in Austria when he was arrested in March 2007.
 
He was originally released on bail for one million euro and, after a year of legal wrangling, was finally extradited to Croatia.

Ivo Pukanic, a prominent Croatian journalist killed in a Zagreb bomb attack last month, had been scheduled to testify in the trial against Zagorec, according to local media.

Zagorec's lawyer, Zvonimir Hodak, says prosecutors will have "a tough job of proving" that the gems were ever given to the ministry.

The 44-year-old was extradited to Croatia last month from Austria, where he found shelter in 2007, when Croatian justice authorities began their investigation.

Croatia must implement tough judicial reforms as part of its aspirations to join the European Union by 2011.

It intends to bring to justice profiteers who misused donations intended for the defence of the former Yugoslav republic during its 1991-1995 war of independence.

Source: Balkan Insight