WRITTEN QUESTION No. 2119/98 by Glenys KINNOCK to the Commission. Unilateral investment sanctions on Burma
Date: 1998-07-10
Institutions: European Parliament, KINNOCK
Subjects: EU investment, Myanmar/Burma, capital movement, economic sanctions, international sanctions, investment abroad

8.4.1999

EN

Official Journal of the European Communities

C 96/41

Would the Commission also outline the contingency plans which are in place to ensure we can address the
problem as soon as is possible?

Answer given by Mrs Bonino on behalf of the Commission

(14 September 1998)

The Commission shares the Honourable Member(cid:146)s concern about the situation in Indonesia, where a food
shortage is a potential risk over the next few weeks.

The Commission, and in particular the European Community Humanitarian Office (ECHO), is monitoring very
closely the situation in Indonesia, which is currently suffering the impact of the forest fires and the drought
provoked by (cid:145)El Niæo(cid:146). Approximately ECU 3,27 million has already been committed for Indonesia since 1995.
An exploratory mission took place in May 1998 to evaluate projects financed by the Commission and identify
future measures.

In this context, the Commission has allocated humanitarian aid totalling ECU 1 million pursuant to a decision of
2 June 1998 to assist Indonesian victims of forest fires and drought. Appropriations will be allocated to different
sectors of activity, including aid to cover a food shortage already identified in East Kalimantan province.

(1999/C 96/058)

WRITTEN QUESTION E-2119/98

by Glenys Kinnock (PSE) to the Commission

(10 July 1998)

Subject: Unilateral investment sanctions on Burma

Would the Commission challenge an EU Member State if it were to impose unilateral investment sanctions on
Burma?

Answer given by Mr Monti on behalf of the Commission

(5 October 1998)

The Commission shares the concern of the Parliament about the situation in Burma. The Community has taken a
number of steps in this respect. The common position on Burma which is due for review before 28 October 1998,
does not, so far, include measures amounting to an investment ban.

As regards any investment bans by Member States, it should be noted that investment by Community nationals in
other Member States or third countries, constitutes a movement of capital within the meaning of Article 73b ff.
EC Treaty. Hence, the Community rules on capital movements apply to investments and investment bans. Article
73b prohibits, as a general principle, all restrictions on capital movements and payments not only between
Member States but also between Member States and third countries. Therefore, Member States, as a principle,
have to provide for full freedom of capital movements, including foreign direct investment, with any third
country, including Burma.

The Treaty makes available to Member States a limited number of exceptions to this general principle. Thus
Article 73c(1) EC Treaty provides that (cid:145)The provisions of Article 73b shall be witthout prejudice to the
application to third countries of any restrictions which existed on 31 December 1993 under national or
Community law in respect of direct investment › including investment in real estate › establishment, the
provision of financial services or the admission of securities to capital markets(cid:146). No general restrictions by
Member States on capital movements with Burma existed on 31 December 1993, which would be covered by this
Treaty provision, apart from a very few sectoral restrictions (such as in the transport or fisheries sector) which
apply to all third countries. Article 73g(2) allows for unilateral measures by Member States for serious political
reasons and on grounds of urgency, as long as the Council has not taken Community measures.