WRITTEN QUESTION E-3948/03 by Erik Meijer (GUE/NGL) to the Commission. Moves by the USA or other countries to make EU Member States comply with their wishes by rewarding or penalising European companies depending on the Member State in which the company is based.
Date: 2003-12-22
Institutions: European Parliament, Provisional data
Subjects: EU relations, Iraq, United States, economic reconstruction, economic sanctions, market access, military intervention, public contract, restriction on competition

C 84 E/744

Official Journal of the European Union

EN

3.4.2004

(2004/C 84 E/0839)

WRITTEN QUESTION E-3948/03

by Erik Meijer (GUE/NGL) to the Commission

(22 December 2003)

Subject: Moves by the USA or other countries to make EU Member States comply with their wishes by
rewarding or penalising European companies depending on the Member State in which the
company is based

Can the Commission confirm that, in awarding reconstruction or investment contracts in Iraq, a state
1.
occupied by US armed forces, the USA is still making a distinction between companies based in EU
Member States that supported the American point of view and the American war effort in 2003 and
companies based in EU Member States that did not support this war, and that the USA has announced that
it will continue to do so?

2.
Does the Commission feel that this signal from the Americans is designed to emphasise that the US
Administration has never felt constrained by Europe or the UN when deciding what it will do in Iraq and
that, in the future, it will pay little or no attention to the views of others?

3.
Have there been situations in the past and in other areas where the US has treated companies from
different EU Member States differently? If so, where and when has this happened? How were these
distinctions justified?

Are there states other than the USA that

4.
differently? If so, where and when has this happened? How were these distinctions justified?

treat companies from different EU Member States

Does the Commission accept that treating companies differently by rewarding those in obedient
5.
states is a suitable way of making individual EU Member States agree as far as possible with the political
views of third countries or of creating a situation in which the EU can reach a common position only
when this position corresponds with the priorities of a powerful state outside the EU?

If the Commission finds the scenario outlined in question 5 unacceptable, in what way does it intend

6.
to put a stop to this as soon as possible?

Answer given by Mr Patten on behalf of the Commission

(5 February 2004)

The ‘Determination and Findings’

issued by the United States (US) Department of Defense on
1.
5 December 2003 under the signature of Deputy Secretary of Defense Wolfowitz applies to 26 prime
contracts to be awarded by the Coalition Provisional Authority (CPA) in Iraq or by the Department of
Defense on behalf of the CPA. These contracts will be funded from USD 18,6 billion committed to the Iraq
Relief and Reconstruction Fund (IRRF) by the US Government. Article 4 of the ‘Determination and
Findings’ states that:

It is necessary for the protection of the essential security interests of the United States to limit
competition for the prime contracts of these procurements to companies from the United States, Iraq,
Coalition partners and force contributing nations. Thus, it is clearly in the public interest to limit
prime contracts to companies from these countries.

The document goes on to list those countries eligible to compete for these contracts. Current Member
States and Acceding Countries listed as eligible are the Czech Republic, Denmark, Estonia, Hungary, Italy,
Latvia, Lithuania, the Netherlands, Poland, Portugal, Slovakia, Spain and the United Kingdom. Those not
listed as eligible are Austria, Belgium, Cyprus, France, Finland, Germany, Greece, Ireland, Luxembourg,
Malta, Slovenia and Sweden. US officials have stressed that these eligibility criteria apply only to the
primary contractors and will not be enforced on sub-contractors.

2.
Despite the suggestion in the ‘Determination and Findings’ that these criteria have been applied as
result of security concerns, Defense Secretary Rumsfeld has made clear that there is a political element to
the decision. Speaking in a press conference in Washington on 16 December 2003, Mr Rumsfeld stated
that ‘the decision was to preserve for those people who made the Iraqi people’s liberation possible access
to the prime contracts’.

3.4.2004

EN

Official Journal of the European Union

C 84 E/745

There have been previous occasions when the US has applied differentiated approaches to Member
3.
States in areas of US Government Procurement. For example in 1993 and as a result of the failure of
negotiations to liberalise purchases of telecom equipment, the US decided to impose sanctions against
certain Member States. The sanctions bar suppliers from a selected group of Member States from bidding
for some US Federal Government contracts.

4.
Although it could not be excluded a priori, it is unusual to see a third country applying limitations to
bidders from a selected group of Member States for trade or economic reasons. Such a measure is often
inefficient considering that Union suppliers often own or control subsidiaries or branches in another
Member State from which it would be easy to bid and elude the measure.

This would, in any case, hardly be the first example of a nation using financial and economic
5. and 6.
in its press statement of
levers to pursue its foreign policy objectives. However, as made clear
11 December 2003 (1), the Commission will monitor procedures relating to the awarding of contracts to
ensure that the United States honours the commitments it undertook under the auspices of the World
Trade Organisation Government Procurement Agreement.

(1)

IP/03/1713.

(2004/C 84 E/0840)

WRITTEN QUESTION E-3980/03

by Olivier Dupuis (NI) to the Commission

(6 January 2004)

Subject: Yukos affair

On 19 June 2003, Mr Pichugin, former head of security at Yukos, was arrested and charged with the
attempted murder of Ms Kostina and with arranging the murder of Mr and Mrs Gorin. The Basmannyi
Court confirmed his arrest and the Moscow Court confirmed this decision, rejecting Mr Pichugin’s lawyers’
request for bail at RUB 3 million. The investigators refused to state the reasons why they suspect
Mr Pichugin although the murderers have already been sentenced. In view of the repeated infringements
committed by the Basmannyi Court, Mr Pichugin’s lawyers brought a complaint before the European Court
of Human Rights. In July 2003, Mr Lebedev, a major shareholder in Yukos, was arrested and charged with
fraud; he is currently in custody awaiting trial. On 26 October 2003, armed FSB agents boarded the
aircraft of the Chief Executive of Yukos, Mr Khodorkovsky, and arrested him on charges of fraud and tax
evasion. The Russian judiciary has continually violated the constitutional rights and the right to a fair trial
of those involved in this affair. The most serious infringements include the failure to respect the role of
lawyers and the principle of confidentiality between lawyer and client, the refusal to hold hearings in
public, the denial of the right to effective legal assistance, the use of arbitrary imprisonment, torture and
illegal searches, and the biased nature of the trial. In addition, 53 % of the shares in Yukos held by
Mr Khodorkovsky were confiscated in order to prevent them from being sold, according to the public
prosecutor, although they belonged to a group of foreign investors. In total, 61 % of Yukos’s shares have
been confiscated, stoking fears that Yukos may be dismantled or nationalised. The political nature of this
affair shows it to be a further attack on the process of democratisation and an intensification of the
repression of freedom of expression in the Russian Federation.

Does the Commission not feel that the behaviour of the Russian judicial and political authorities are
incompatible with the rule of law? What initiatives does the Commission intend to propose to Member
States and to take itself, within the extent of its powers, to ensure that the Russian authorities respect the
principles in force in a constitutional state and, in particular, to guarantee Mr Pichugin, Mr Lebedev and
Mr Khodorkovsky the full exercise of their right to defence, the presumption of innocence and all their
fundamental rights? More generally, is the Commission not of the opinion that the fundamental rights of
the citizens of the Russian Federation, as well as the rights of Russian or foreign investors, are not
guaranteed satisfactorily in today’s Russia?