WRITTEN QUESTION E-1075/98

by Kirsten Jensen (PSE) to the Commission

(6 April 1998)

Subject: Cooperation with the Mafia in Uzbekistan

1. A series of articles in the Politiken newspaper of 18 and 19 March 1998 (attached) states that the Danish brewery concern Carlsberg is cooperating with the Uzbek Gafur Rakhimov, who is involved in the drug trade and has close links to the Mafia in Uzbekistan. Gafur Rakhimov is blacklisted in all Schengen countries and cannot therefore obtain a visa in the EU. In the Commission's view is it a problem that European companies cooperate in this way with people who are blacklisted under Schengen?

2. It is reported that the European Bank for Reconstruction and Development has invested in the project, so that it is also cooperating with Gafur Rakhimov. Can the Commission confirm this?

3. Is there any possibility of something being done at Community level about this and similar cases?

4. Is the Commission considering intervening either in this case or in similar cases?

5. Will the entry into force of the Amsterdam Treaty in any way affect the answer to these questions?

Answer given by Mrs Gradin on behalf of the Commission

(7 July 1998)

Given that the Schengen Convention and the Schengen Information System are an entirely intergovernmental matter which falls outside the Treaty and given the strict data protection rules governing the Schengen Information System, the Commission has no access to data on individuals who are "blacklisted under Schengen".

The Commission obviously would always prefer to work with law abiding citizens and companies, but it has no particular view on the choice of business partners made by private enterprises, as long as they abide by Community law.

The European Bank for reconstruction and development (EBRD) has informed the Commission that it is committed to encouraging the highest standards of conduct in the countries in which it operates and, in particular, to ensuring that these standards prevail in the companies in which it invests. The Bank has full discretion to refuse funding if, as a result of its due diligence process, it is dissatisfied with the standards of a company or if the circumstances surrounding a proposed project show material cause for concern. In view of the seriousness with which EBRD treats such matters, external experts are used in the due diligence process.

EBRD has indicated to the Commission that it had discussions concerning funding of this project and that its due diligence process has not to date shown evidence to support the allegations made. Should the EBRD remain interested in this project then, as with all such projects, it will continue to apply the due diligence process to ensure that all relevant evidence in this matter is available to it. Until the EBRD has made a commitment in respect of a particular transaction such as this, it retains full discretion not to fund the project should the results of the EBRD due diligence be unsatisfactory.

The Commission intends to check the information provided by the Honourable Member to see whether any contracts financed by Community funds are involved. It goes without saying that, if irregularities are found, possible subsidies will be cut off and money paid out will be recovered. The Commission has, moreover, established an early warning system with regard to dubious operators within and outside the Community. Its services are asked to show the utmost care when dealing with such operators in order to ensure fraud-proof execution of contracts and avoid misuse of funds for criminal purposes.

The fight against organised crime in countries like Uzbekistan or in other Newly Independent States necessitates a broad international effort and co-operation. At the European Council in Amsterdam heads of state and government agreed on an action plan against organised crime which identifies 31 different initiatives to deepen co-operation. Recommendation No. 4 calls for a closer international collaboration in this respect.

The entry into force of the Amsterdam Treaty will considerably improve the possibilities to fight fraud affecting the financial interests of the Community and the decision-making process will become more efficient and more democratically accountable. Also co-operation concerning justice and home affairs will be improved.