The witness said Sanader received kickbacks for the market development in Croatia, but also as a condition for signing the agreement on the loan with which Croatia, at the time when it was hard for the country to get money on foreign markets, wanted to purchase buildings for diplomatic missions abroad.

"Kulterer said it was necessary to pay kickbacks for this loan and that this was the condition for further business deals on the Croatian market," Hasselinger said. He added that Sanader had allegedly asked for a commission amounting to 8 percent of the loan, which is above the terms of business so the supervisory board asked Kulterer to negotiate the final amount of the commission.

Although he was not informed of the results of the negotiations, the witness said he had learnt from a document, signed by former executive of Austrian Hypo Bank in charge of operations with Croatia Gunther Striedinger, that the commission amounted to five percent which, according to him, was also "the upper limit."

Hasslinger said that because of the unusually high commission, which is entirely being calculated in the loan and eventually paid by the loan user, the bank had to cover a share as well.

Ex-PM Sanader is charged with receiving 3.6 million kuna in kickbacks from Hypo Bank in the mid-1990s to facilitate a loan to Croatia for the purchase of buildings for diplomatic missions. Sanader is also accused of taking 10 million euros in bribes from Hungarian oil and gas group MOL to secure it a dominant position in Croatia's INA.

Sanader was brought to court today from the Remetinec prison. This is most probably the last hearing for Sanader to arrive from the prison, as he is expected to leave Remetinec after courts register exchanges his detention with a HRK 12.4 million bail. The Supreme Court on Thursday turned down appeals against Sanader's release on bail and he is expected to leave Remetinec prison in Zagreb after courts register mortgaged property that has put up for bail.