The former Anglo-Yugoslav Bank, now known as the AY Bank; BSC Jenex, a Serbian- owned trading company; and Yugotours, a fully-owned subsidiary of BSC Jenex which now trades as MedChoice, all insisted they were complying fully with sanctions. Bank of England controls made it impossible for funds to be sent to Serbia, all three maintained, each rejecting any suggestion that intermediaries were being used to do that.
BSC Jenex and Yugotours said trading conditions meant they had no surplus funds to remit even had they wished or been able to do so.
Michael Cowdery, deputy managing director of the AY Bank, said a 30 per cent cut in its staff meant the bank, whose majority shareholder is Beogradska Banka in Belgrade, remained profitable but was paying no dividends. 'We totally refute that we are sending funds to Belgrade. We comply with UN sanctions scrupulously and have regular consultations with the Bank of England's sanctions emergency unit and the Department of Trade and Industry,' he said. The bank observed sanctions at least as scrupulously as any other because of its position. 'There is no question whatsoever of us sending cash to Serbia.'
Doro Vicovich, operations manager of Yugotours, who says the company lost 97 per cent of its business when holiday traffic to the former Yugoslavia was banned, said it now ran tours to Turkey, Greece, Spain, Cyprus, Malta and Slovenia.
Any payments to hoteliers and others in the travel trade to the Mediterranean were monitored by its bank under Bank of England regulations. Mr Vicovich said he could guarantee that no transactions had been made with Serbia or Montenegro or through intermediaries.
Similar denials came from Bert Abel, company secretary of BSC Jenex, which is owned by General Export of Belgrade. His company had not traded with Serbia since sanctions were imposed, instead developing its trade with other countries. 'All transactions going through our accounts are monitored either directly by the Bank of England or on their behalf by the clearing banks. Even if there was a desire to send money to Serbia, we just couldn't'
Jack Cunningham, Labour's foreign affairs spokesman, wrote on Wednesday to Douglas Hurd, the Foreign Secretary, calling on him to 'end the activities of such organisations forthwith' and alleging that they were 'widely known to be remitting substantial economic support to Belgrade'.
Sanctions monitoring is undertaken by the Department of Trade and the Bank of England. A trade department spokeswoman said it had no evidence the sanctions were being broken.
The Bank of England confirmed that it supervised AY Bank's activities closely, adding: 'At no point have we seen any evidence that payments have been made in breach of sanctions.'
Mr Cunningham said yesterday that 'we never suggested that these organisations were doing anything illegal' but he did want assurances that sanctions against the former Yugoslavia were proving effective.Reuse content