ZAGREB, Jan 21 (Reuters) - Croatia's Supreme Court has ruled that a communist-era intelligence chief can be extradited to Germany, where he is wanted over the killing of a Yugoslav dissident in the 1980s, the court said on Tuesday.
Josip Perkovic was arrested on New Year's Day as the Balkan state acted to resolve an extradition dispute that had overshadowed its accession to the European Union last July. A Zagreb court ruled on Jan. 8 he should be extradited to Germany.
"The Supreme Court has dismissed as unfounded the appeal by Josip Perkovic against his extradition," it said on its website.
Perkovic can still appeal to the Constitutional Court and demand that his extradition be delayed.
Also in January, police arrested a second former secret service chief from the Yugoslav period, Zdravko Mustac, wanted by Germany for the same crime.
But a different Zagreb court ruled that Mustac should not be extradited because the statute of limitations has passed for a murder committed more than 25 years ago.
Some, though not all, legal experts believe Perkovic's case differs from that of Mustac, because Croatia twice investigated the allegations against him in 1997 and 2005.
Despite clearing Perkovic on both occasions, the experts say the investigations mean that the statute of limitations does not yet apply in his case.
Perkovic had worked for the Yugoslav federal secret service, the UDBA, when Croatia was part of the communist federation.
Perkovic helped set up Croatia's national intelligence agency as it seceded from Belgrade in 1991, when Yugoslavia broke up in bloodshed, and held senior security posts through the 1990s.
Germany wants him and Mustac in connection with the 1983 murder of a Yugoslav dissident in Bavaria that it blamed on UDBA. Perkovic has denied wrongdoing and said he was ready to testify before a Croatian court.
Perkovic and Mustac were among 10 Croatians arrested on European arrest warrants as an amended extradition law took effect on Jan. 1 to bring the country into line with most of the rest of the EU.
Shortly before joining the EU on July 1, in a move that irked its EU partners, Zagreb changed its laws to prevent the extradition of suspects in crimes committed before 2002, when new EU extradition rules took effect.
The government said at the time that it wanted to protect veterans of Croatia's 1991-95 independence war from facing potential prosecution elsewhere in the EU. It denied any connection with the Perkovic case and pointed out that some EU member states have the same 2002 time limit.
But the government removed the time restriction in August after the European Commission warned that it could face legal action, including the possible loss of EU development funds. (Reporting by Zoran Radosavljevic; Editing by Mike Collett-White)