YUGOSLAVIA: European ‘White List’ Puts Firms On Domestic ‘Black List’

By Vesna Peric Zimonjic Reprint | | Print |

Vesna Peric Zimonjic

BELGRADE, Jul 24 2000 (IPS) - Companies that found themselves on a European Union (EU) ‘white list’ of firms exempted from sanctions banning all Serbian business with the grouping, say they want out of the elite band in which they have been placed. But their EU partners will not let them decline the honour.

“My business is ruined,” says the owner of a small, food-export firm in the central Serbian town of Cacak.

The businessman, who refused to give his name noting that it was enough his firm was on the EU’s “white list”, said he is caught between a rock and a hard place.

The EU’s ‘white list’ so provoked the Slobodan Milosevic government that on Jul. 13 it announced “urgent measures for strict control of all firms” in Serbia. That simply meant blacklisting all the companies on the EU “white list”.

Some of the businesses have tried to get off the ‘white list’ but have been threatened by their partners from EU countries.

“My partners from EU countries say that they will not continue working with me if I try to remove my name from the EU ‘white list’,” the food exporter said.

It is a tale of solidarity gone awry.

In an effort to highlight the distinctions it makes between the Milosevic government and the Yugoslav people the EU recently introduced a ‘white list’ of 190 firms exempt from strict EU economic sanctions that ban all business with Serbia.

The list of small- and medium-sized companies, most of them privately owned, names firms allowed to do business with EU enterprises. Some of them were founded with mixed Serb and foreign money, some are owned by Serbs who invested their life savings into small trade. There is only one bank in Serbia on the list, French-founded Societe Generale.

The official EU explanation is that Europe is willing to co- operate with small- and medium-sized firms not under the control of Milosevic’s government, to keep at least a small section of the economy in Serbia running. At the same time, the decision was aimed at spotlighting the isolation of big firms controlled or owned by the government. They are already banned from doing any business with the EU. Serbia has more than 20,000 registered firms and the EU’s ‘white list’ was seen by many as purely symbolic.

But, as many independent analysts had warned, the controversial EU measure blew up in the faces of the chosen firms. The government’s response was to send the financial police into the offices of dozens of the ‘white listed’ firms, including the Societe Generale bank. Trade and other ministries stopped issuing import and export licenses to any of the companies on the list.

“The making of the so-called ‘white list’ was the worst decision the EU could have made,” Mladjan Dinkic, head of the Group of 17 independent Serbian economists told IPS.

“The EU said that this was a measure in the interest of the people suffering under Milosevic. But the EU did not contact any economic experts or democratic forces here, who could have assessed what is in the best interests of the people. Now, ordinary people and firms on the ‘white list’ are being punished.”

An official of the Serbian Trade Ministry confirmed to IPS that “no licenses are being issued to the 190 firms on the list.” Asked whether any relevant or additional documents for export or import licenses for EU countries are being asked from the 190 firms, the official who preferred to remain anonymous, said: “They are not allowed to make any applications for licenses at all.”

The EU introduced a total trade embargo against Serbia in 1999 after the NATO bombings began in March of that year. All business and financial transactions with the country were banned. Serbia’s major trading partners in the EU at the time were Germany, Italy and France.

Eleven weeks of NATO air strikes against Serbia caused additional damage to the economy. Factories, industrial and other infrastructure were destroyed. Through its officials, NATO explained at the time that ruining the basis of the country’s economy was one of its aims.

But the Serbian economy was already in shambles before the air strikes. Several rounds of economic sanctions introduced since 1992 and which included total oil, trade and air traffic embargoes, imposed because of Belgrade’s role in the war in Bosnia, had done their jobs.

The sanctions were lifted after the 1995 Dayton Peace Accords on Bosnia. But the United States, through several executive orders and citing repression against ethnic Albanians in the southern Serbian province of Kosovo, has introduced and kept in force what it calls an “outer wall of sanctions” against the Milosevic government.

But none of these sanctions has served the international community, for they have not led to mass rebellion against Milosevic. However, the government and state controlled firms have got around the embargoes and this has created a circle of enormously wealthy people including the Milosevic family.

With the blacklisting of the ‘white listed’ companies the government has again proven that it can turn the international community’s triumph into something akin to defeat.

“It’s sad that the regime wants to punish the companies that can do business with the EU,” Jan Wilhelm Blankert of the European Commission office in Belgrade told journalists recently. “Our intention was to stimulate those firms that were not government or state owned,” he added.

Analysts say the move was both clumsy and counterproductive.

“The EU ‘white list’ amounts to a death-knell for firms who had a chance to co-operate with European countries and keep their businesses afloat,” Belgrade analyst Ivan Torov says. “Another quick, one-sided European decision is being paid for by people here. It’s unbelievable that the EU has not learned a thing about the character and mentality of Milosevic’s rule,” he says.