Broken butter embargo

Press, 28 February 1984, Page 16

Broken butter embargo

European Economic Community investigators are convinced that widespread sanctions-busting by community exporters enabled the Soviet Union to buy all the butter it wanted during the 33-month embargo that ended in March, 1983.

When the inquiry by the commission’s fraud squad began last December, it was thought that up to 50,000 tonnes of community butter, ostensibly destined for other export markets, had in fact gone to the Soviet Union. Two months later, the figure had doubled to more than 100,000 tonnes. Cuba has emerged as the Russians’ main accomplice. The circumstantial evidence is strong. During the embargo period, the E.E.C.’s direct butter sales to the Soviet Union (traditionally its biggest client) were virtually zero. As soon as the embargo was applied, Cubans suddenly acquired an immoderate taste for European butter.

Community shipments to Cuba, which had totalled only 4300 tonnes during the entire preceding three-year period, soared to 100,000 tonnes while the sanctions against the Soviet Union were in force. They dried up again, equally suddenly, when the embargo was lifted last March. The possibility of large-scale sanctions-busting came to the commission’s attention when Lloyd’s agents recorded the ships that were supposed to be carrying E.E.C. butter to Cuba as steaming eastwards in the Baltic. Brussels has now brought in forensic experts to test the authenticity of the Cuban import documents submitted to enable the E.E.C. exporters to claim their export subsidy. Total community subsidies on the Cuban contracts amounted to some $lOl million. The commission hopes that it can recover the cash paid out in rebates, at least on those shipments which can be proved never

to have reached their declared destination. One of the key figures under investigation is Mr Jean-Baptiste Doumeng, France’s communist millionaire, who has been at the centre of all important recent sales of community surplus food to Russia. But in the first instance it is the member States from which the butter was shipped that would have to reimburse the commission. Proceedings against individual exporters can be taken only by member governments under their own national laws. If the commission’s suspicions are substantiated, the Netherlands and Ireland risk having to pay back most to the kitty. Of the 100,000 tonnes that left the community ostensibly bound for Cuba, these two countries each shipped 37,000 tonnes. France Shipped 18,000, and Britain and West Germany 4000 tonnes each. — Copyright, the “Economist.”