WRITTEN QUESTION E-3886/97 by Leonie van Bladel (UPE) to the Council (5 December 1997)

Subject: Misuse of EU funds in Russia

1. The Russian newspaper Rossiyskie Vesti published three articles on 11 April 1995, 29 June 1995 and 18 October 1997 under the headlines: 'Legacy from a Dutch grandmother', 'Mousetrap baited with Dutch cheese' and 'Dutch response to Rossiyskie Vesti investigation', all relating to the misuse of EU subsidies. Has the Council instructed the Commission to investigate the misuse of EU funds referred to in these newspaper articles? If so, what are the Council's conclusions? If not, why has such an inquiry not yet been carried out and is the Council still prepared to instruct the Commission as a matter of urgency to make inquiries regarding the alleged misuse of EU subsidies in connection with the building of the distribution centre in Moscow?

2. Is it true, as stated in the Rossiyskie Vesti article of 29 June 1995 entitled 'Mousetrap baited with Dutch cheese', that 'the lion's share of the money intended for the Russian development project of building a distribution centre near Moscow in cooperation with the Russian semi-state-controlled company TONAR has been paid to the Dutch multinational Koninklijke Ahold N.V. for consultancy work and under the guise of assistance to Russia, experts and officials have enriched themselves with EU funds'?

3. In the articles Rossiyskie Vesti claims that money made available to Russia by the EU for Technical Assistance has not been efficiently used. Can the Council say how the EU funds have been used in building the projected distribution centre and why the building of the distribution centre has not been completed?

4. Does the Council not take the view that the Dutch courts have now established de facto that the multinational Koninklijke Ahold N.V., the Dutch partner in the project, acted unlawfully vis-à-vis its Russian partner TONAR and that the funds made available for this project by the European Union should be reclaimed?

5. The Russian newspaper Rossiyskie Vesti concluded on 18 October 1997 that 'the Government of the Netherlands is actually only helping its own nationals'. Does the Council realize that behaviour such as this by the Government of the Netherlands runs counter to the intentions of the European Union in granting subsidies to Russia, namely the promotion of economic activity in Russia and thus of stability and security in Europe as a whole?

Joint answer to Written Questions E-3886/97, E-4158/97 and E-0298/98 (7 April 1998)

The TACIS programme provides technical assistance for economic reforms in Russia and, through the transfer of 'know-how', measures which will, inter alia, ensure the transition to a market economy.

With the collapse of the USSR, the provision of food supplies to Russia's cities posed major problems, warranting a large-scale Community food aid operation. Structural requirements linked to transition to a market economy in this area led the Community to make the production, processing and distribution of foodstuffs one of the priorities for TACIS Programme intervention.

In this context, the TACIS Programme funded a preliminary study for a centre for the wholesale distribution of foodstuffs in Moscow. That study was followed up by intervention funded through bilateral technical assistance from the Netherlands Government.

In this connection, the Council would make the general point that the Commission is responsible, under successive Regulations Nos 2157/91, 2053/93 and 1279/96, for managing the TACIS Programme and it is therefore for the Commission to provide information on the implementation of the operations it finances. With more specific reference to the project financed by the Netherlands State from its own funds, the Council does not feel it should comment when a Russian company has brought the case before the courts of the Member State concerned.