U.S. DEPARTMENT OF STATE
95/06/02 Report on Greek Enforcement of UN Sanctions against Serbia
Bureau of European Affairs
This report is submitted in compliance with the Congressional requirement as set forth in public law 103-306 - August 23, 1994.
There have been persistent allegations that Greece has aided Serbia in evading UN sanctions as imposed under UN Security Council resolutions 757, 787, and 820. We cannot confirm that the Government of Greece (GOG) has abetted violations of sanctions. The GOG believes the UN sanctions reflect a misunderstanding of the causes of the conflict in the former Yugoslavia, strengthen extremists in the region and weaken the economies of the nearby states. Nevertheless, the GOG has promulgated laws and regulations necessary to enforce the sanctions. An oil pre-verification system has been available for use since the summer of 1993, allowing GOG officials to verify the final destination of oil shipments leaving Greece in order to deter transshipment of oil to FYROM and Albania.
Although we cannot confirm Greek government complicity in sanctions evasion, we would prefer a more pro-active approach to sanctions enforcement on the part of the GOG. There are several areas of concern in Greek sanctions enforcement, including the activities of the Serbian Consulate in the northern city of Thessaloniki, the presence of Serbian front companies in Greece, the intermittent use of the oil pre- verification system and the number of Greek goods reaching Serbia via third countries. The GOG takes the position that once goods leave Greece, the country of destination as stated on the shipping documents is responsible for assuring the goods are not sent to Serbia. Greece does not have a border with Serbia.
Since the imposition of sanctions, the EU/OSCE Sanctions Assistance Mission Communication Center, SAMCOMM, has asked the GOG to investigate 230 reported violations. The GOG replied to 77 cases, leaving 153 outstanding requests. The U.S. government has consistently stressed to the GOG the importance of effective implementation of the sanctions regime. On July 7, 1994, at the request of the Foreign Ministry (MFA), Embassy Athens provided information on the pattern of sanctions violations, a list of cases originally referred to the GOG by SAMCOMM, and a list of actions the GOG could take to tighten its sanctions enforcement. The MFA replied orally in August 1994, defending the GOG's record on sanctions enforcement. An MFA sanctions official claimed that the problem is third-country decisions which take place in neighboring countries (Albania, FYROM, Bulgaria) and are outside the control of the GOG. We have continued to urge strengthened enforcement of sanctions.
This report on Greek implementation of United Nations sanctions against the Federal Republic of Yugoslavia (FRY) is submitted consistent with Title III of the FY95 Foreign Operations Act. The information contained in this report is based on reporting from several sources, including the U.S. Embassy in Athens and SAMCOMM.
Although it covers the period May 1992, to December 31, 1994, concentrating on Greek implementation of sanctions affecting trade and financial transactions, there is no indication of change in the Greek government's policy on sanctions enforcement since December 31. There are other UN Resolutions which address the sale of arms, transportation, and sports and cultural activities.
The report provides background information on Greece and the political setting. It outlines what is required of states by various UN Resolutions concerning sanctions against FRY and discusses Greek implementation of sanctions against FRY. The report also notes the impact on implementation of sanctions against FRY from the Greek embargo against the Former Yugoslav Republic of Macedonia (FYROM). Finally, the report summarizes what the United States Government has done to encourage improved implementation of sanctions by Greek authorities against FRY.
All UN member nations are required to enforce sanctions measures against the Federal Republic of Yugoslavia (Serbia and Montenegro) as described in UN Security Council Resolutions 757 and 820.
Under UN Security Council resolution 757, all states are required to prevent the import of all commodities and products originating in the FRY and any activities by their nationals or in their territories which would promote the export or trans-shipment of any commodities or products originating in the FRY. Resolution 757 also prohibits the use of a nation's flag vessels or aircraft to transport goods or commodities originating from the FRY. Medical goods and foodstuffs notified to the relevant UN committee are exempted.
Among other provisions of Resolution 757, all states are required to reduce the level of the staff at diplomatic missions and consular posts of the FRY.
UN Security Council resolution 820 further mandates that transshipments of commodities and products through the FRY on the Danube shall be permitted only if specifically authorized by the relevant UN committee and that each vessel so authorized must be subject to effective monitoring while passing along the Danube between Vidin/Calafat and Mohacs.
States are asked to bring proceedings against persons and entities violating the UN resolutions implementing these sanctions and to impose appropriate penalties.
All states which hold funds, including any funds derived from property of the authorities in the FRY or of commercial, industrial or public utility undertakings in the FRY shall require all persons and entities within their own territories holding such funds to freeze them to ensure that they are not made available to or for the benefit of the authorities in the FRY or to any commercial, industrial or public utility undertaking in the FRY. All states are required to report to the relevant UN committee on actions taken pursuant to this paragraph.
All states are required to prohibit the transport of all commodities and products across the land borders or to or from the ports of the FRY. The only exceptions are humanitarian goods approved by the UN committee, medical supplies and foodstuffs notified to the relevant UN committee.
All states are required to prohibit the provision of services, both financial and non-financial, to any person or body for purposes of any business carried on in the FRY. An exception is provided for telecommunications and postal services, legal services consistent with resolution 757 and, as approved, on a case-by-case basis by the relevant UN committee for humanitarian or other exceptional purposes.
All commercial maritime traffic is prohibited from entering the territorial sea of the FRY except when authorized on a case-by-case basis by the relevant UN committee or in case of force majeure.
GOG Resources Committed to Sanctions Enforcement
The Greek government has promulgated laws and regulations necessary to enforce sanctions against FRY. Greek sanctions enforcement is coordinated by a Serbian Sanctions Task Force headed by former Consul General George Christofis, an official of the Ministry of Foreign Affairs. Greek Customs and the Ministry of National Economy (export licenses) also participate in the work of the Task Force. Other government ministries also take part as appropriate. The Greek Government sends representatives of the Ministry of Finance and/or the Bank of Greece to meetings discussing the enforcement of UN financial sanctions against Serbia and Montenegro. The Ministry of Merchant Marine is involved in all cases which concern shipping. While there is no formal SAM system in Greece involving the assignment of foreign customs officials, the Greek government does have a cadre of professionally trained personnel who are capable of examining both exports and imports for possible sanctions violations.
Sanctions Assistance Missions (SAMs), comprised of customs officers from OSCE and EU countries, are sent to the states bordering Serbia and Montenegro to advise on sanctions enforcement. They are typically positioned at key border crossing points. A central staff, SAMCOMM, is located at the EU headquarters in Brussels and a liaison officer is at the UN in New York. The Greek Government provides one person to SAMCOMM. It has also provided personnel to the Sanctions Assistance Missions system, most recently, four customs officers to Romania.
The Government of Greece contends the UN sanctions do not require that the Serbian Consulate in Thessaloniki be closed, but only that staff be reduced. The Greek Government states this has been done. Since 1992, the Consul General has been Rajko Ristic, a former president of the Yugoslav-Greek Chamber of Commerce with strong and influential contacts in the northern Greek business community. Ristic also served as a district attorney in Belgrade.
The Consulate has an active visitor's program. A delegation of Serbian ministers, led by Vice President Slobodan Ukovitch, visited Greece in November to explore opportunities for expanding Greek and Serbian economic cooperation after sanctions are lifted. Another delegation led by the Speaker of the Serbian Parliament visited the port city November 10-11. There are reports that Ristic has been in contact with businessmen from Greece, Bulgaria and FYROM to facilitate the movement of goods into Serbia in violation of the U.N. sanctions. It has also been reported that he has worked to promote trade between Serbian businesses and Greece, including inviting Serb businessmen to the annual trade fair in Thessaloniki.
Oil Pre-verification System
In July of 1993, Greece implemented a pre-shipment delivery verification system for oil exports to FYROM. Under this program, Greece would not issue any export license for oil shipments to FYROM until it had received a pre-shipment verification from the SAM in FYROM that the shipment was legitimate. In addition, SAM FYROM was also responsible for making a post-shipment delivery verification to ensure that the oil was received by the intended recipient.
This system was implemented to control oil exports to FYROM, which was seen at the time as a weak point in the UN Sanctions against Serbia. This system fell into disuse in February 1994, when Greece implemented its own embargo against FYROM and all direct oil exports to FYROM from Greece ceased. The pre-shipment verification system was reactivated in February 1995 to control the shipment of 5000 tons of oil that were shipped to FYROM from Greece on humanitarian grounds. The Greek Government has indicated that the pre-shipment verification system has been expanded to include oil exports to Albania. The Greek Government claims that a pre-shipment verification system for oil exports to Bulgaria is not necessary because oil exports from Greece to that country are very small.
Serbian Front Companies
Serbian companies are actively establishing branches in Greece. The Greek Government is investigating to see if the activity of any company violates sanctions. Some Serbian trading firms such as " Progres" and "East Point Holdings", continue to function through subsidiaries in other countries, including Greece. There are also two FRY firms operating in Greece, "Inex-Interexport Thessaloniki", and "Helser Ltd.", which are on the Department of Treasury's Office of Foreign Assets Control (OFAC) list of Specially Designated Nationals (SDNs). Both companies were named SDNs because of their violations of the Serbian Sanctions regime.
The lack of a common border between Greece and the FRY means that shipments between the two countries must pass through intermediary countries. There is information which indicates that a significant amount of trade is conducted by Greek companies with Serbian entities through third-countries. Before the imposition of the blockade on the FYROM, FYROM was the most common intermediary. According to SAMCOMM reports, since imposition of the embargo against FYROM, there is frequently a two-mile long line on either side of the Greek-Bulgarian border at Promahonas.
Since the FYROM blockade was imposed, alternative routes through Albania (especially for petroleum products) and Bulgaria have been developed. In many cases false documentation is used to indicate an end-user in the intermediate country, when the intent is to ship the goods to either the "FRY" or Greece.
Most of the goods exported through Bulgaria were shipped overland, although there is at least one documented case of shipping by sea in the case of the Widar, whose loading ports are Thessaloniki and Piraeus, and which has been watched closely. Overland, the goods are shipped with the documents showing Bulgaria as the final destination. Documents are then substituted to indicate the FYROM as the ultimate destination and finally (perhaps) a Serbian firm as the consignee. Lubricating and engine oil is one of the common Greek exports sent by EVROIL in Greece to MAKOSPED in the FYROM and then forwarded to Serbia. In 1994 some 233 shipments transiting Bulgaria totalling 5,460 tons valued at U.S. $2.85 million could be traced to probable Greek origin.
There also has been activity involving Albania. The Swiss SAMCOMM Team at Skhoder reported a great deal of activity involving petroleum trucks belonging to the Greek company ELITA STAR.
Greek shipping companies are also suspected of transporting goods via third countries. The Greek company Marine T. has put several ships into Vlore Port (Albania) including the San Tito, and the Alexadra. EVROIL sent out the Marina, the Sefiros, and the Ijonis. The EVROIL company has been watched closely for delivering oil to Albania. MOIL Coal has docked at least one ship, the Vasilios XI, which was photographed in the roadstead most likely being offloaded.
The Port of Durres, Albania has been frequented by ships from three petroleum companies. The Korinthia, Kaliope, Alexadra, Skopolous, Angara, Giocamy, Irene, and Nelli are all M/T's which have delivered refined petroleum products. The Vasilios X had no listed shipper, but has also been observed delivering oil. There appears to be a pattern of refined petroleum product shipments regularly carried aboard these four ships to the Albanian ports of Durres and Vlore, and then transported to Serbia and Montenegro in violation of the embargo. The GOG has initiated legal proceedings in some of these cases.
There also appeared to have been an elaborate scheme involving Serbian, Romanian, and Greek companies in an attempt to provide petroleum products to Serbia via the Danube before SAM monitors were operational.
Intermediate countries are also used to facilitate exports from the FRY. Before the Greek embargo against FYROM, exports of wood, pharmaceuticals and other Serbian goods usually showed a FYROM origin and were then shipped to Greece for use in that country or onward shipment. There appear to be companies which specialized in this trade, especially by commodity. For example, according to SAMCOMM, a load of oak timber was shipped from Croatia to Greece in 1993. The cargo was shipped by both truck and ship, with stops in Venice, Ravenna, and Trieste. The company affiliated with this transfer was Greek. Despite the embargo, there are signs that this activity is continuing.
The Greek Government has taken the position that third-country diversions which take place outside of Greece (in Albania, Bulgaria, or FYROM) are beyond Greek control and not its responsibility. Greek officials argue that exports from Greece to neighboring countries are legal when they are the final destination for the goods. They also maintain that it is the responsibility of the governments of those countries to control Greek exports once they enter their territory. However, article 13 of UNSC Resolution 820 requires member states to take steps to prevent diversion of commodities and products said to be destined for other places. Recent developments indicate that the Greek Government is taking a closer look at this situation and, as a result, has reinstituted and expanded (to include Albania) the oil pre- verification system as well as examined some customs documents more closely.
Consequences of the Embargo against FYROM
The Greek embargo against FYROM, initiated in February 1994, has complicated implementation of sanctions against the FRY. Unwilling to commit what it views as "economic suicide", FYROM authorities have allowed trade between FYROM and the FRY to increase since the Greek embargo was implemented. In addition, there are credible reports that goods from Greece are transiting Bulgaria and FYROM en route to FRY and that exports from FRY are transiting FYROM en route to Bulgaria and Greece.
Since the sanctions went into effect, SAMCOMM has requested 230 investigations have been requested of the Greek Government. There have been 77 replies, leaving 153 outstanding investigation requests. We do not believe there have been any convictions for violations of sanctions.
In response to requests for investigations, the Greek Government often claims that the U.S. and SAMCOMM provide insufficient information to conduct a meaningful investigation. It also frequently decides that no violation had occurred. However, the GOG would like the United States Government to furnish additional information which could be developed by more rigorous Greek investigations.
The Greek Government has filed sanctions violation charges against the owners/captains in several shipping cases (Greek and non-Greek flags). The court case against the "THITA" tankers: Volcano, Triton, and Apollo has been heard and all implicated in the case were acquitted. The vessels had been accused of taking petroleum to Bar, Montenegro, and Black Sea ports for onward shipment to Serbia. The Greek government has indicated that it will file an appeal in this case. The cases of the Penelope (former East River), which took petroleum products to Bar, and the Dimitrakis, which took coke to Bar and carried wood out, have not yet gone to trial. We are attempting to verify the status of the cases. Frequent lawyers' strikes unrelated to these cases have delayed the cases.
Greece has also maintained that, according to SAMCOMM, its record of violations is much better than most other countries, including Germany and Italy. The Greeks point out that fewer cases have been referred to them by SAMCOMM than these other two EU countries. While it is true that the cumulative number of cases referred by SAMCOMM to Italy since 1992 is 814, Italy has replied to 67.1% of the cases, while Greece has only replied to 33.5% of their cases.
DEMARCHES/USG REQUESTS FOR INVESTIGATIONS
The United States Government has consistently stressed to senior officials of the Greek Government the importance of effective implementation of sanctions against FRY. We would prefer a more pro- active approach to sanctions enforcement on the part of the GOG. In addition to approaches on specific cases, the issue of improved implementation of sanctions has frequently been raised at meetings between senior officials of both governments.
On July 7, 1994, at the request of the Foreign Ministry, Embassy Athens provided information to the ministry on the pattern of sanctions violations by Greek companies and general information on how the port of Thessaloniki and the Greek embargo against FYROM undermine the UN sanctions. In addition, a list of cases for follow-up which were originally referred to the GOG by SAMCOMM, and a list of actions the GOG could take to tighten its sanctions regime were provided. The ministry replied orally to the Embassy in August 1994, defending the GOG's record on sanctions enforcement. An MFA sanctions official claimed that the problem is third-country decisions which take place in neighboring countries (Albania, FYROM, Bulgaria) and are outside the control of the GOG.
On November 4, 1994, Secretary Christopher sent a letter to the GOG addressing the importance the USG places on sanctions enforcement with an attachment containing information on specific Greek violations. On January 25, 1995, Foreign Minister Papoulias provided a general response reiterating his government's commitment to sanctions enforcement. None of the specific allegations were addressed until April 17, 1995 when Foreign Minister Papoulias provided a follow-up response indicating that the GOG is investigating the allegations in the Secretary's letter but alleging that the information provided on the violations lacked sufficient concrete evidence.
Greece is located in southeastern Europe on the southern tip of the Balkan Peninsula. The Greek mainland is bounded on the north by Bulgaria, the former Yugoslav republic of Macedonia (FYROM), and Albania; on the east by the Aegean Sea and Turkey; and on the west and south by the Ionian and Mediterranean Seas. The country consists of a large mainland, and the Peloponnesus Peninsula, connected to the mainland by the Isthmus of Corinth, and more than 1,400 islands. Greece has more than 14,880 kilometers (9,300 mi) of coastline and a land boundary of 1,160 kilometers (726 mi.). Greece does not share a land or maritime boundary with Serbia.
Greece has about 175 ports, including the major port in northern Greece at Thessaloniki. Along with Piraeus, it is the most modern port in the Balkans. It has facilities for bulk cargo, oil, and general cargo. Other significant ports in northern Greece are at Igoumenitsa, Kavala, Corfu, and Alexandropoulos.
Northern Greece has a good road network, with major roads running east- west and north-south. A modern road connects Thessaloniki with Skopje in FYROM. Another links Thessaloniki with Sofia, Bulgaria. Road connections with Albania are adequate. There also are rail links with FYROM and Bulgaria.
Greece perceives itself in a more dangerous situation since the end of the Cold War. Ancient ethnic and nationalistic disputes have erupted among its northern neighbors. The Greeks perceive a rise in Islamic fundamentalism, and believe Muslim states, especially Turkey, are exploiting the turmoil in the Balkans to expand their influence there to Greece's detriment. Greek policy toward the region is driven in significant part by its traditional fear of Turkey and its historic and religious links with other Orthodox states, primarily Russia and Serbia. This view is reflected in the popular mood and in the Greek government's concerns with western policy toward the former Yugoslavia. Greece believes that the west has placed too great a share of the blame for the war in former Yugoslavia on the Serbs. In the Greek view, the break up of former Yugoslavia was caused more by premature recognition by certain European governments of Croatia and Slovenia than by Serbian aggression.
Greece opposes the use of force against Serbia. Greece has never blocked initiatives in NATO to use force against Bosnian Serbs, however, but has disassociated itself from decisions authorizing military actions. This position reflects Greece's belief that such policies reflect an anti-Serb bias among NATO members. Greece also opposes the introduction of troops from neighboring states, including its own, into former Yugoslavia. This policy reflects Greek concern that Turkey would use such a situation to strengthen its position in the Balkans.
Greece believes the economic sanctions against Serbia reflect a misunderstanding of the causes of the conflict in former Yugoslavia, strengthen extremists in Belgrade, and weaken the economies of the states in the region. The Greek government has supported easing the sanctions against Serbia without the preconditions required by U.S.- supported policies. Nonetheless, the Greek government has accepted the sanctions and sought to enforce them.
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