ECONOMY

More EU sanctions on sugar fraudsters

BRUSSELS (Reuters) – The European Union has published its three-month ban on special sugar trade concessions for Serbia and Montenegro as part of a campaign to stamp out fraud, the EU’s Official Journal showed yesterday. The ban’s notification was published in the May 1 edition of the journal but this did not appear until a day later due to the Labor Day national holiday. The ban would enter into force on the seventh day following its publication date, the notice said. The EU’s executive Commission announced the ban on Wednesday but many sugar traders immediately requested clarification of exactly when the three-month suspension would begin to apply. «A significant and rapid increase in preferential imports of sugar into the Community from Serbia and Montenegro was registered since the beginning of 2001,» the notice’s text read. «Exports of sugar from the Community to this country also increased significantly in 2001. This development of trade in both directions appeared highly artificial,» it said. In its original announcement, the Commission said the ban could be extended if the two countries did not improve their controls and stop a scam involving fraudulent exports of Balkan sugar to the European Union. Duty of between 33.9 and 41.9 euros per 100 kilograms will now be levied on imports of sugar from Serbia and Montenegro, which is the standard EU external tariff. Previously, Serbia and Montenegro had been able to send their domestic sugar output to the EU free of duty under the special scheme, designed to help the economic reconstruction of war-torn industries in the western Balkan region. The Commission made its first move to crack down on Balkan sugar fraud in March, scrapping subsidies for EU exporters sending sugar to Albania, Croatia, Bosnia-Herzegovina, Serbia and Montenegro and the Former Yugoslav Republic of Macedonia. The special deal allows western Balkan countries to export their sugar production to the EU free from duties and quotas. It was launched in 2001 but two types of fraud were quickly detected: an unusual rise in sugar exports and imports between the two regions and the discovery of cane sugar in shipments from the Balkans, where only beet sugar is produced.