Mandelson defended over billionaire claims

The European Commission's most senior trade official has defended Peter Mandelson over claims of a conflict of interest during his time in Brussels as Trade Commissioner.

Lord Mandelson, now UK Business Secretary, has been accused of giving multi-million pound trade concessions to a Russian aluminium billionaire who entertained him on his superyacht.

But David O'Sullivan, Director-General of the Commission's trade department, denied that Lord Mandelson personally intervened to influence decisions on aluminium import tariffs.

The allegations were raised in the Commons earlier, when Commons Leader Harriet Harman dismissed Tory calls for a debate about press claims which she described as "unjustified" smears.

The claims centre on Commission decisions taken on Lord Mandelson's watch which allegedly resulted in businessman Oleg Deripaska gaining up to £50 million a year thanks to changes in EU import duties.

Mr O'Sullivan, who worked closely with Lord Mandelson during his four years in Brussels, said in an open letter to British newspapers that all relevant decisions had been taken in line with EU law, transparently, and in the interest of EU companies and consumers.

The letter declared: "I am very surprised by the allegations in the British Press about Peter Mandelson, Oleg Deripaska and aluminium. The claims that have been made in various newspapers hint to Peter Mandelson's personal intervention in his capacity of European Commissioner for Trade in favour of the Russian aluminium company RUSAL. I would like to clarify that no such intervention ever took place."

He says decisions on tariffs and "anti-dumping" duties on Russian aluminium were "based on sound facts".

The letter acknowledges that Lord Mandelson "facilitated a compromise proposal in 2004 which cut raw aluminium tariffs from six to 3%".

But Mr O'Sullivan says the Commission is now conducting an inquiry into aluminium foil imports involving a RUSAL-related company: "Far from receiving favourable treatment from the EU, RUSAL may end up having to pay duties on its exports to the EU," says the Director-General.

"I trust this clarifies that all decisions regarding these cases have been taken in full transparency and are firmly rooted in EU law and the interests of EU companies and consumers."

Reports of Lord Mandelson's links to Mr Derispaska have appeared in the Sunday Times and Times newspapers and the Daily Telegraph.

The Times reported this week that there had been a series of social meetings between the two during Lord Mandelson's stint in Brussels.

In the Commons, Tory Hugo Swire said that, because of the "very serious nature" of some of the claims, the House should hold a debate on the reports of the personal relationship.

But Ms Harman said: "I don't think business questions should be used - and the privilege that attaches to business questions - for honourable members to make smears and allegations which are unjustified."

The Telegraph suggested that the links between the two men were more frequent than has been suggested in rebuttals of the newspaper stories: the paper said that, apart from hospitality aboard the billionaire's yacht, Lord Mandelson also met Mr Deripaska for dinner at least twice in Moscow.

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