Patten bids to refine Serbia sanctions policy

Date: 27/07/00

By Simon Taylor

THE European Commission is trying to fine-tune its policy of exempting some Serbian companies from sanctions imposed on the regime in Belgrade to counter criticism that it is exposing pro-western firms to greater persecution by Slobodan Milosevic and his allies.

External Relations Commissioner Chris Patten has proposed a number of changes to the 'white list' system which allows Serbian companies to trade with the EU if they can prove they have no economic links with the Milosevic regime. So far, 189 firms and one bank have signed up to the initiative.

In addition to amending the list by removing firms which do not meet the criteria for inclusion and adding others which have applied to join, Patten is considering making the list secret to make it harder to identify companies taking advantage of the concessions.

The move reflects concern that Milosevic is singling out firms on the list for intimidation and mounting criticism that the EU's sanctions policy against the regime is at best ineffective and, at worst, may be reinforcing his grip on power.

A new report drawn up by the Centar za Proucavanje Alternativa think-tank in Belgrade, Sanctions Now Help Only Milosevic, calls for the sanctions to be lifted, arguing that "they are not effective, or are even counter-productive. There is no single case which proves any change in behaviour of the targeted political group because of the sanctions." The study points out that the Cuban and Vietnamese regimes have survived for 20 or 30 years despite the wide-ranging penalties imposed on them.

The report also argues that the sanctions are preventing moves towards an open market-based economy in Yugoslavia. "No transition from a closed to an open society is possible while the economy is not exposed to direct foreign investment and market competition. Sanctions turn every foreign investment into a criminal act and make exports impossible," warn the authors.

Worse still, it says, the international community could undermine its own stated policy of support for opposition groups in Serbia if it fails to act before voters go to the polls in Yugoslavia this October. "Any move to abolish or partly lift sanctions before the elections in Serbia which is clearly attributed to the opposition's good relations with the West would increase the political credibility of the democratic opposition and considerably restore public confidence," it argues.

But the Commission insists that the EU's approach is effective and argues that the white list is not to blame for attacks on companies because the Serbian authorities already know which firms are cooperating with the West, whether or not they appear on the list.

Most member states are now in favour of changing the Union's sanctions policy against Serbia, but the UK and the Netherlands are blocking any modifications, which must be agreed unanimously.

The European Commission is trying to fine-tune its policy of exempting some Serbian companies from sanctions imposed on the regime in Belgrade to counter criticism that it is exposing pro-western firms to greater persecution by Slobodan Milosevic and his allies.