Firms in Britain 'sending cash to Serbia'

DOUGLAS HURD was urged last night to close down three former Yugoslavian companies operating in London and alleged to be sending funds to Belgrade, despite sanctions on trade with Serbia.

Jack Cunningham, Labour's foreign affairs spokesman, challenged the Foreign Secretary in a letter to 'end the activities of such organisations forthwith' and repeated a charge that sanctions had been applied in a 'weak and irresolute way' during Britain's presidency of the EC. Citing Mr Hurd's recent claim that he wanted to 'plug the holes in the sanctions regime', Mr Cunningham asked for an explanation why London still hosted at least three Serbian commercial operations which, he said, were widely known to be remitting substantial sums to the Serbian capital. Labour is not accusing the companies of acting illegally but says sanctions are weak compared to those imposed on Iraq before the Gulf war. It wants the Government to take a tougher stand and freeze all financial transactions with Serbia.

The Anglo-Yugoslav Bank has been renamed the AY Bank, but Mr Cunningham said it is still majority owned by the Serbian government and operating openly in London under licence from the Bank of England. The holiday company Yugotours, owned by the former state, has been renamed MedChoice and, he said, is selling holidays in Slovenia and Cyprus. 'My information is that it continues to remit substantial funds to Belgrade'. Last night, no one at MedChoice or AY Bank was available to comment.

Mr Cunningham further maintained that Jenex BSC, a company which, he said, used to organise at least 70 per cent of all trade with Yugoslavia, is still in business in London, remitting money to Belgrade and actively encouraging trade with the former Yugoslav republics.

Mr Hurd, in an article in the Daily Telegraph last week, highlighted imperfections in the sanctions regime and said that just when economic hardship had begun to affect the debate in Serbia, oil had reached it from the Adriatic and illegal traffic continued on the Danube.

But Mr Cunningham, in his letter, said the 'imperfections' went further. 'Those who have closed one eye to major trading and financial links have helped to relieve Belgrade of real pressure at a time when it would have counted.' He asked Mr Hurd: 'If, as you claim, you wish to 'plug the holes in the sanctions regime' and that you are 'proposing a final round of new economic sanctions', will you ensure that the examples of British trade with Belgrade that I have illustrated, and others known to exist, will be cut off?'