At General Elections Show Solidarity With The Diaspora – The Most Important Investor And Tax Payer In Croatia

Both cynics and optimists (albeit with a heavy heart) have long indulged in the thinking that corruption (one of the predominant characteristics of doing private or government business inherited from communist Yugoslavia) in Croatia will continue to plague the country simply because the benefit of doing it outweighs its cost. After swindling millions from government projects and companies, the alarmingly large number of jailed corrupt officials and company directors can expect to walk out of prison and live the rest of their lives spending the ill-gotten riches or, others will avoid prosecution due to their connectedness to the corridors of power. Perhaps here also lies a reason why both HDZ and SDP-led governments of past two decades have committed travesty, to say the least, towards the Croatian diaspora, which is professionally experienced and knowledgeable about implementation of corruption-resistant legislation and procedures as well as developed in living in established democracies with despise for corruption in society.

Both HDZ and SDP-led governments of Croatia have particularly during the past decade made it increasingly difficult and most often impossible for Croatian citizens living in the diaspora to vote in the Croatian elections even though their right to vote is guaranteed by the Constitution of the Republic of Croatia. And yet, if it were not for the outstanding contribution the Croatian diaspora has made in the creation of today’s independent Croatia and if it were not for the continuous outstanding influx of money from the Croatian diaspora into Croatia that significantly reduces poverty in Croatia, Croatia would today undoubtedly be in a much worse economic and political position. Voters are the ones that steer and impact on positive (or negative) development of the economy as well as all other draw-cards of standard of living. The entitlement to reasonable access to polling booths has been made unreasonable for the Croatian diaspora during the past decade. Polling booths situated in community settings such as Croatian clubs have been abolished and citizens of Croatia living abroad wishing to vote during elections are forced to vote at the Croatian diplomatic-consular missions, which are unreasonably too far for most voters to travel to. Electronic and postal voting, the ultimate tool of democracy put in place by most democracies in the world, have eluded, purposefully, the resolve and actions of all governments in Croatia during the past two decades. The process of gaining Croatian citizenship for people living abroad of Croatian ancestry has been unreasonably difficult, slow and complicated. The foreign pensions taxation has been utterly unfair once a Croatian who has earned his/her pension abroad has returned to live in Croatia, his/her first homeland. The climate for setting-up business in Croatia has been made unreasonably difficult and riddled with destructive red tape. I could go on and on about the political and legislative climate in Croatia during the past two decades that has despite the governments’ open invitations for Croats to return from the diaspora worked against and in resistance of that very goal the governments’ have evidently been putting to the forefront of matters to be achieved during past mandates.

On the matter of paying tax in Croatia and its increasing (ill-gotten) association to the right to vote I, and indeed many, cringe in disbelief. That is, for few years now the Croatian public, both in Croatia and in the diaspora, has been bombarded with misguided, destructive and downright depraved attitudes that “Croatian diaspora should not be permitted to vote in Croatian elections because it does not pay tax in Croatia.” The fact that the Constitution of the Republic of Croatia provides for the right to vote to all citizens of the country, no matter where they live, is not even heard from the mouths of politicians belonging to governing coalitions. The fact that Croatian diaspora does in one way, or another, contribute significantly to the taxation revenue of the country is not heard from their mouths, either. It’s only the politicians of the “right-wing” opposition that express the facts of the Croatian diaspora’s tax contribution to Croatian government revenue from time to time. But this usually falls on deaf ears of mainstream media.

So, let’s take a brief stock of Croatian diaspora’s contribution to the taxation revenue of the Republic of Croatia. In 2019 the National Bank of Croatia has registered 1.74 billion euro remittance via bank transfers or deposits from the diaspora. This sum can easily be doubled if one takes into account cash physically brought into the country by Croats visiting Croatia or by sending cash to family in Croatia via visitors to the diaspora. If we assume, and it is safe to do so, that these enormous amounts of cash and remittances from the diaspora are spent in Croatia on goods and services then the tax revenue for Croatia contributed by the diaspora comes in through 25% valued-added tax (PDV) and it is stunningly great. What is more important in this, though, is the fact that bank remittances and physical cash that flows from the diaspora into Croatia also means that this money goes towards reduction of poverty in Croatia. Then, there are many returnees from the diaspora who bring in their foreign pensions, which are taxed at 12.25 to 40% depending on the height of the foreign pension and most are taxed at the higher rate of tax. If they were not Croatians from the diaspora who do not love their first homeland, they would not return to Croatia to live! Then there are investments and businesses set-up in Croatia by people from the Croatian diaspora (whether the investors or business owners live in Croatia or not) and tax revenue for the state from the diaspora follows. Then there are various land and property taxes Croats from the diaspora pay in Croatia. I could go on with this stocktaking of taxes paid or contributed to Croatia by the Croatian diaspora, but I believe that what I have listed here is sufficient to prove and demonstrate the point that Croatian diaspora does contribute to tax revenue of Croatia; it contributes significantly. Furthermore, paying taxes is not nor should it be a condition for the entitlement to vote in elections – citizenship is.

The governing and opposition politicians either by their lack of guidance towards the public on this matter or by direct fuelling of such ill-gotten attitudes towards the Croatian diaspora and its right to vote are to blame. These attitudes have a direct and destructive impact on the unity of Croatian people to work on a common goal of making Croatia a better and fairer place to live in for all. Only recently, a member of Croatian Parliament, Kreso Beljak, has stated for N1 television in Croatia that he “would abolish voting from the diaspora. The person who does not pay tax in Croatia has no place voting during elections.” One does not need to think hard in order to see the depravity in Beljak’s statement and opinion. If we take the Croatian diaspora out of his equation, is he also saying that Croatian citizens living in Croatia who do not pay tax (and there are multitudes – the unemployed, the low income earners, the tax evaders…) should also not be permitted to vote!? I have not come across any reprimand of Beljak by the governing or the main opposition coalition in Croatia for making such a statement on public TV.  I can only conclude that promulgation of such depraved and disparaging statement about the Croatian diaspora suits both the HDZ governing and the SDP opposition coalitions in Croatia. It seems that it suits their political agenda for them to distance and alienate the diaspora from its homeland, but in that the only losers are people (voters) in Croatia whose livelihood depends on the money and other remittances sent to them from the diaspora.

The logical solution here is for the upcoming elections in Croatia to bring about the result that would vote away (vote against) all political parties that have led governments of Croatia during the past two decades. One would hope that all Croatians living in Croatia who have had and are reaping the material benefits from their family members and friends living in the diaspora, benefits that helps them live a more decent life than what their income in Croatia allows, will cast their vote at elections in solidarity with the Croatian diaspora and reject both HDZ and SDP coalitions. Cast your vote for true change, not a change promised by those whose track record in essence shows no real change. How can anyone re-set the economy they actually managed to run down? Of course, they cannot! They lack knowledge! How can anyone rid the country of debilitating corruption that adversely affects lives of most Croatians in Croatia struggling to keep afloat, if they have not managed to do so in twenty years? Of course, they cannot! They lack will-power and knowledge!

Croatia’s parliament on Friday 15 May 2020 had on its agenda the motion put forward by the government coalition to dissolve on Monday 18 May, which will enable general elections to be held either late June or early July. By strengthening the role of other political forces besides HDZ and SDP, the long-awaited changes for Croatia have real chances, but it is necessary for every voter to take a national direction of betterment and progress. Solidarity with and respect for the diaspora is needed. Ina Vukic

 

 

 

 

 

Croatia: Corruption and COVID-19 Coronavirus Crisis

Hrvoje Zekanovic, MP (L) Zeljko Glasnovic, MP (R)
Croatian Parliament 3 April 2020
Photo: Screenshots

While issues and matters relating to COVID-19 (coronavirus) is and has for some weeks now been overshadowing everything else there’s no doubt that times of upheaval (and COVID-19 coronavirus has created one) are always times of radical change, times of control; in this case control of people behaviour and choices in living. There are those who believe the pandemic is a once-in-a-generation chance to remake society, restructure processes that have not worked and build a better future. Others fear it may only make existing injustices worse. If there is one injustice defining life of ordinary citizens in the Croatian society it is corruption. Corruption at all levels of power or at all processes people’s lives depend upon – whether it is nepotism, whether it is bribery, whether it is embezzlement and theft – the pandemic and focus on measures to stop or slow-down the spread of COVID-19 currently seems a fertile ground for “business as usual” when it comes to dealing with corruption. This is regretful, for this crisis could also be a time when restructures are made in order to eradicate the crippling corruption in Croatia.

Rewind your mind back a few weeks and imagine someone telling you that within a month, schools will be closed. Almost all public gatherings will be cancelled. Hundreds of millions of people around the world will be out of work due to compulsory closures of shops and non-essential services. Governments will be throwing together some of the largest economic stimulus packages in history. In certain places, landlords will not be collecting rent, or banks collecting mortgage payments, and the homeless will be allowed to stay in hotels or empty apartments free of charge. Governments will delve into direct provision of basic wage or income. Large number of countries in the world will be collaborating – with various degrees of coercion and nudging – on a shared project of keeping at least two metres between each other whenever possible. European Union free travel and movement between member states will cease to exist and police and armies of each member state will make sure its borders are impregnable. More than likely than not, you would have labelled the person who told you all that, and more, as a lunatic, at least.

The size and speed of what is happening is dizzying, but also is the fact that we appear to be getting accustomed to hearing that democracies are incapable of making big moves like this quickly; that firm government control is what’s essential in order to save our lives and livelihoods! In many cases, and so too in Croatia, minority governments are on the road of using control of coronavirus threat to citizens in order prove that they are legitimate, and powerful. Any glance at history reveals that crises and disasters have continually set the stage for change, often for the better = but not always! The global flu epidemic of 1918 helped create national health services in many European countries. The twinned crises of the Great Depression and the second world war set the stage for the modern welfare state. Will the coronavirus crisis in Croatia set the stage for eradication of corruption, I wonder and wish it would.

Unless focused upon, corruption is likely to increase during these pandemic times in Croatia and measures, such as introduction of Code of Conduct or standards or strict checks and balances, independent audits of practices, standing down of the incompetent politically suitable employees from public administration, etc. must be introduced, otherwise, the fear for a decent livelihood will not only be fuelled by COVID-19.

On Friday 3 April 2020 in the Croatian Parliament, Members of Parliament Hrvoje Zekanovic (President of Croatian Sovereignists) and retired General Zeljko Glasnovic (Independent Member for Croats living outside of Croatia) addressed the Parliament with speeches that reflected on the possible dangers of government appointed body that has absolute powers at this time of crisis, political machinations and manipulations benefitting only the political party in power, the corruption embedded in the government system riddled with former communists and how the crisis may and should be used for major restructures which no government of Croatia has achieved so far.

Hrvoje Zekanovic, MP, among other things said: “… we have a strange scenario, surreal, unrealistic, and I wonder if maybe this crisis has been welcomed by some structures… banks for example… banks have struggled to place their money for years. Lots of money, cheap money, they even gave it out without charging interest. Suddenly all the countries of the world and our Croatia are rushing to the banks, to international markets, anywhere, seeking money to save their national economies. It is an interesting coincidence, that is, to know that someone is benefiting from this crisis because all countries in the world are very economically indebted at the moment, to whom, to banks. And the other fact is that the banks had a major problem with the placement of their funds, that they had piles of money, billions and billions of dollars or euros that they could not place. And now, Croatia has suddenly sobered up, the HDZ elections are over, the old HDZ president is the new HDZ president, Andrej Plenkovic, has swept up the competition and is free to deal with the corona crisis. All of a sudden, as politically imagined as it is, a new body, some new faces … and then suddenly it rushes to grips with the corona crisis. And suddenly we have a new body that has absolute powers. This body, the Croatian Parliament, gave it the ability to do whatever it wants. And in all the media, we have one real agitprop – yesterday, in the Open program, we have three ruling party politicians, zero from the opposition. Check out any news on Croatian television … or any other national television … and you will not be able to see, except in some sideline frames, the opposition or some other people who are critical of the government’s response to this crisis, and the mouths of national television will be full of praise for the measures of the Croatian government …”

Zeljko Glasnovic, MP, among other things said: “…we need to respect neutral sources, no one knows how long this will last… of course we cannot separate politics from the economy and today the economy from the coronavirus … I think the first step of any economic measure is that if we talk about solidarity, that we take care of the most vulnerable group of people. They are the disabled, the old people, etc. This is the real right-wing, not the red-right that first secured money for its  three generations in advance… we do not yet have the origin of property or the names of people who have bank accounts abroad, and we know that maybe everyone of them was in the Party (Communist) … Now is the time not only for economic security, but the time is now, because crisis is the best stimulus, crisis and fear, for best structural reforms that no government has ever made. We have tightened the belts, the grey economy is double what it was in the European Union, and we know how many, well, how some Croats are creative accountants, they are masters of it… how is it possible for one person, as one small example, to be spending public money and spending 170,000 kunas on representation (entertainment) without having to answer to anyone! That’s right, the grey economy and now the professionalisation of the administration and now it’s time for all these institutions to work in sync to see that the money is going where it should go … you enjoyed the Party, you are doing well today, you have created a second generation of emigrants, and I would send all of you an auditor-general, this inspector … I don’t know what his financial status is … you are all linked together, I don’t trust you, I believe in God and mathematics, I would solve everything in three months and would first come to your door …”

The Council of Europe’s Group of States against Corruption (GRECO) has published on 24 March 2020 its fifth round evaluation report (for full pdf report click here) on Croatia dealing with preventing corruption in government (top executive functions) and the police and it will be most interesting following up on what is being done to curtail corruption; to bring it down to insignificant levels.

The Group of States against Corruption (GRECO) is a Council of Europe body that aims to improve the capacity of its members to fight corruption by monitoring their compliance with anti-corruption standards. It helps states to identify deficiencies in national anti-corruption policies, prompting the necessary legislative, institutional and practical reforms. Currently it comprises the 47 Council of Europe member states, Belarus, Kazakhstan and the United States of America

Croatia joined GRECO group in 2000 and this year’s report was focused on evaluating the effectiveness of the measures adopted by the authorities of Croatia to prevent corruption and promote integrity in central governments (top executive functions) and law enforcement agencies. The report contains a critical analysis of the situation, reflecting on the efforts made by the actors concerned and the results achieved. It identifies shortcomings and makes recommendations for improvement. GRECO’s plan is for Croatia to report back on the action and measures taken, on compliance, in response to GRECO’s recommendations within 18 months of the adoption of this report; that would be around mid-2021.

In this report GRECO considers that developments in recent years have shown a need to ensure that integrity standards also apply to people working in an advisory capacity for the government. More specifically regarding members of the government, state secretaries and assistant ministers, the report calls for the adoption of a code of conduct, to be supplemented with practical guidance, briefings on the integrity rules in place and confidential counselling.

When it comes to the police, the report notes a relatively low level of trust in the police and considers that more needs to be done to prevent corruption risks within the police itself.

GRECO further recommends that the current rules on the taking up of employment – when a person entrusted with top executive functions leaves an official position – need to be broadened and considers that the lack of rules on reporting and disclosing contacts with lobbyists/third parties that seek to influence the public decision-making process constitutes a gap. This gap must be filled in order to further improve transparency.

Efforts to prevent corruption risks within the police itself, GRECO report says, should start with comprehensive risk assessment of corruption-prone activities within the police, as a basis to adopt an integrity and anti-corruption strategy for the entire police force. The report furthermore acknowledges the existing code of ethics for police officers but considers that it would need to better cover all integrity matters and be supplemented with an explanatory manual to become a truly practical tool and a reference point for the to-be-revised police trainings. Furthermore, more attention needs to be paid to the current appointment and promotion processes of police officers and their employment after they leave the police. Finally, GRECO recommends that a requirement be established for police staff to report integrity-related misconduct they come across in the police service.

The institutions or bodies in Croatia that deal with fighting against corruption are several. They include the Commission for Monitoring the Implementation of Anti-Corruption Measures, the Ministry of Justice’s Anti-Corruption Sector, the Police National Office for the Suppression of Corruption and Organised Crime (PNUSKOK), the USKOK – Office for the Suppression of Corruption and Organised Crime and the National Council for Monitoring the Implementation of the Anti-Corruption Strategy. Indeed, the Croatian people have been listening to its governments saying that corruption must be eradicated for decades and yet nothing much changes. Corruption and clientelism thrive unabated, bar for a handful of legally pursued cases of high-profile personalities. The fact that corruption keeps on thriving in Croatia comes as no surprise – those in power and high positions would have to remove themselves from those positions in order for eradication to work. Many, many are those who held powerful positions during communist Yugoslavia, or they are the descendants of them.  Hence, nothing short of thorough weeding and lustration will eradicate corruption. The judiciary if filled with former communists or descendants of communists who had amassed personal wealth through corruption; the same goes for many members of parliament, for members of major political parties, for officers in government and public administration, for heads of government owned companies, for heads of many politically active NGO’s…The abuse of public institutions for personal gain is blinding in Croatia and the current government control of almost everything citizens do in this COVID-19 pandemic could easily lead to pushing Croatia even further down the world corruption-free index ladder. Clientelism is rife and the pandemic will surely feed it more in the environment of having a government-created body with absolute powers in what a citizen may or may not do; who gets the lucrative contracts and who does not! Ina Vukic

Whistleblowers And The Unravelling Corruption In Croatia

 

Fear of reprisals for reporting wrongdoing, whistleblowing on corruption or possible corruption, breaches of legislative regulations etc. is a real concern when fighting corruption and this fear is very pronounced in Croatia. Croatia (like all former Yugoslavia member states) is a country riddled with entrenched corruption stemming from the communist public service and administration culture and it needs a stronger whistleblowing regime. To have a strong whistleblowing regime it means freedom from damaging consequences for those who report wrongdoing and it also means that the number of whistleblowers present and active needs to be high. That is, the number of people raising complaints and pointing to wrongdoing.  That means Croatia needs better protection laws for whistleblowers; better freedom of information laws; a third party to report wrongdoing to in a process of operational  “checks and balances”; cultural change at the organisational and individual levels; and compensation for those suffering retaliation for speaking out.

According to the Croatian justice ministry’s June 2017 issue of Action Plan for 2017-2018 under the Implementation of the Anti-Corruption Strategy for 2015-2020 (PDF of Action Plan), the law that would, among other, make provisions for the protection of whistleblowers should reach the parliament chambers in the third and fourth quarters of 2018. The justice ministry has already established a working group under the government’s Advisory Committee On Combating Corruption.

The above anti-corruption strategy recognises and acknowledges the fundamental role of whistleblowers in highlighting corrupt practices and in contributing to enhance transparency and political accountability. The strategy stresses the “need” to guarantee whistleblowers effective judicial protection, including measures to strengthen judicial transparency, enhance the reporting system for illegal conduct, and complete the regulatory framework to safeguard whistleblowers.

Croatia’s economy is presently overcast by thick clouds of unease and suspicions of major corruption emerging from the Agrokor affair. Related to the Agrokor and its majority owner Ivica Todoric affairs threatening to bankrupt the country once debt recovery claims, especially those from foreign banks such as Russia’s Sberbank, come knocking on the door sits, of course, Pandora’s box of corruption at the highest levels of political echelons. Should the lid of that Pandora’s box be lifted then even if all the “evils” escape into the open the mythical hope (for justice and good) that should remain inside the box is likely to be weak and flimsy, if at all existing.

To open Pandora’s box means to perform an action that may seem small or innocent, but that turns out to have severely detrimental and far-reaching negative consequences for those who open the box and for those associated with them in dealings. It was about one month ago that a former member of the Liberal Party in Croatia, Bruno Mirtl,  revealed to the public that over 10 years ago he received 50,000 kuna (about 6,500 Euros) for the party’s funding from Ivica Todoric of Agrokor, In the days before Todoric’s arrest in London, it was announced that Agrokor – which had enjoyed privileged treatment by all Croatian governments for decades – had filed false accounts, hiding a loss of several billion Euros.

As Mirtl rightly observes, if even such a small party as his own obtained unlawful funding by Todoric, then there is no doubt that the main, more influential parties (Croatian Democratic Union/HDZ and Social Democratic Party/SDP) received much more substantial sums from the same source.

Mirtl’s testimonial account could trigger a domino effect on the Croatian political scene, forcing drastic and forced exodus from the major parties of significant members and political power-brokers come wheelers and dealers. But the domino effect in a political playground can only happen if those fighting against corruption possess hope that such battles can in effect be won. If one was to judge the strength of that hope upon past experiences then cover-ups, stalling of legal processes etc. that have occurred in similar circumstances, that hope will evaporate into thin air. It would seem that major political players from the major political parties, supported by the bent mainstream media are digging their heels in and trying to suppress the Mirtl and Todoric affair under similar connotations that permitted Todoric to pull wool over everyone’s eyes when it came to the origins of his enormous personal wealth.

This goes without saying that if the whistleblower protection is inserted into the legislation draft, one really never knows how even the tightest of plans for such legislation to go ahead can be hacked out of existence, the HDZ government and SDP opposition (as both have governed the country over periods in the last two decades, after Homeland War and may have had their fingers deeply immersed in the corruption pie) would no doubt try their damnedest to  find solutions that ensure wolves (guild owners, managers, senior political officials) remain fully satisfied and the sheep, though perhaps reduced in number, remain anaesthetised.

And the fact that the recently established Parliamentary Inquiry Committee (which is in no way independent of political parties as it should be) on Agrokor is about to be extinguished lends itself to more unrest and recriminations across parliamentary benches. The governing HDZ insists that the applicable legislation requires for the Committee to stop operations once legal proceedings directly related to the reason why the Committee is set up commence, the Committee has no further jurisdiction. The SDP opposition, on the other hand, think differently and says the Committee can continue its operations regardless of separate legal proceedings held in court. Given SDP’s history as well as HDZ’s one doubts that when it comes to unearthing details of corruption in this case the dispute between the two major political parties about whether the Committee can or cannot continue appears blatantly contrived.  It does leave room for speculation as to the genuineness within the motives to set up such an inquiry in the first place and how much of its rushed start has to do with throwing dust in public’s eyes, giving the outlook of real search for corruption was afoot when, in fact, it was all an exercise to win on time.  The real crunching of corrupt culprits and their ill-gotten wealth may never even reach the door that leads into the room where justice and consequences for corruption are dished out as a matter of normal governance of Croatia.

Not all the sluggishness and lack of action from Croatia’s leadership when it comes to affirmative matters and getting things done for whistleblowers, upon whose existence fighting corruption largely depends, can be attributed to the governments of present and past. Croatia’s presidents since year 2000 have not stepped up to the action mark either. And this goes for the present president Kolinda Grabar-KItarovic as well. Shortly after taking office as president of Croatia, Kolinda Grabar Kitarovic appointed Vesna Balenovic as her commissioner/adviser for whistleblowing issues. Vesna Balenovic is a well-known whistleblower, who few years ago denounced some of the executives of the INA oil company (of national importance) where she was employed. She was immediately dismissed, ending up with defamation charges by then Chairman of INA’s Board of Directors Tomislav Dragicevic and former Minister of Finance Slavko Linic. Later on, Chairman of INA’s Supervisory Board Davor Stern advanced the idea that Vesna Balenovic could be re-admitted into the company as commissioner for the fight against corruption. This never happened, but Balenovic has remained present in public life as founder and president of the Zviždač association (Whistleblower Association). INA has stopped being a public company for some time, as the administrative rights were transferred to Hungarian MOL (this matter is the subject in criminal proceedings for corruption waged now for years against former Prime Minister Ivo Sanader). This deal was accompanied by extensive corruption (refer for example to former Prime Minister Ivo Sanader case) that still weighs not only on the bilateral relations between Croatia and Hungary, but also on domestic politics and the work of the Croatian judiciary, which is definitely not equipped to face these kinds of challenges on a fair-and-square basis as it itself is said to be corrupted and filled with former communist operatives that should be lustrated out of the judicial corridors and benches.

Four months after being appointed as commissioner/adviser for corruption by president Grabar-Kitarovic, Balenovic left that office in protest, arguing that she had not even seen a glimpse of the president in the entire time she worked in her cabinet. One could (should) be a cynic here and say that Balenovic had obviously not realised that her only task was to be a trophy in Grabar-Kitarovic cabinet, who obviously has close ties with many persons responsible for or who have contributed to the sluggishness and alarming inaction when it comes to real fighting with corruption that would see deposition, lustration and even imprisonment of quite a number of political elitists.

Taking into account the constant quest to create a climate conducive to entrepreneurship, that would save the ailing economy, both HDZ and SDP political echelons, as well as president Grabar-Kitarovic, it is truly – in the climate where institutions and big business pander to the will of the governing elite and where public administration is heavily politcised – unrealistic to expect any increases to workers rights that include the protection of whistleblowers. Not increasing protection of whistleblowers in law and practice would, without a doubt, devastate further the very core of any economic or business culture recovery or hope for it. Ina Vukic

 

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