EU starts 'positive sanctions' for YU

BRUSSELS, Jul 3, 2000 -- (Reuters) The European Commission on Monday introduced a further refinement of EU sanctions against Yugoslavia, listing 190 private companies to be rewarded as legitimate trading partners.

The so-called "white list" applies to firms and institutions which can prove they have no connection with the federal government of Yugoslavia or that of Serbia, the federation's dominant partner.

The Commission said in a statement that about 300 Serb companies had applied for consideration and it expected to add a further 50 or so names to the positive sanctions list later this month.

To qualify for exemption from overall financial sanctions companies must show that they can withhold revenues earned in EU trade from the state, and that they are not engaged in banking, energy supply, military, police, transport, petrochemicals or steel - sectors dominated by the Belgrade government.

They will also have to show that transactions with the 15-member bloc have a value of less than 100,000 euro (dollars) per month.

The move to reward independent firms is part of a policy of so-called "smart sanctions" aimed at targeting the regime of President Slobodan Milosevic while minimizing the impact on ordinary Serbs.

The Yugoslav authorities have poured scorn on the plan and some EU diplomats have said it will be hard to implement.

It follows a decision earlier this year to suspend a ban on airlinks with Yugoslavia but stiffen other sanctions over Belgrade's role in years of violence in the region.

Diplomats said Britain, the Netherlands and Denmark had been prominent supporters of the decision, although some member states including Spain had reservations about it.

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