France cleared the use of frozen funds to export food to Syria

PARIS Mon Sep 23, 2013 10:46am EDT

A boy makes bread in Duma neighbourhood, in Damascus September 22, 2013. All official government bakeries were closed since 10 months ago and no flour has reached the area except those smuggled by Free Syrian army members, activists said. REUTERS/Bassam Khabieh

A boy makes bread in Duma neighbourhood, in Damascus September 22, 2013. All official government bakeries were closed since 10 months ago and no flour has reached the area except those smuggled by Free Syrian army members, activists said.

Credit: Reuters/Bassam Khabieh

PARIS (Reuters) - France has cleared the use of frozen Syrian bank assets to fund the export of food to the country as part of a European Union system that allows such funds to be used for humanitarian ends, a spokeswoman at the French trade ministry said.

The European Union, United States and other Western countries have imposed sanctions on President Bashar al-Assad's government over his crackdown on the revolt in his country, but these do not apply to food.

Syria has been trying for several months to buy sugar, wheat and rice in international tenders using funds frozen abroad, in vain. One of the reasons cited by traders was a failure to secure permission from governments to free the funds.

"Permits issued by the French authorities have been declared to the member states of the European Union and the Commission," the spokeswoman told Reuters by email.

The export of food commodities under these authorizations may be financed through frozen funds of Syrian banks affected by European Union sanctions, she added, but did not say when the permission was granted.

The move by a European government to free Syria's frozen funds removes a political hurdle to much needed food purchases, although traders say Damascus' recent failures to buy food in public tenders may be more related to its tender terms.

They say Syria's attempts to buy food using frozen funds had been unsuccessful because it was still imposing the same purchasing conditions as in normal times with huge penalty payments if they were not met.

France, which has been backing military action to punish Syria for a deadly chemical weapons attack, granted the permits to unfreeze Syrian funds due to the unprecedented food crisis hitting the country and its civilian population, the spokeswoman stressed.

France is the European Union's largest grain exporter.

The EU executive was not immediately available to comment.

(Additional reporting by Justyna Pawlak in Brussels; writing by Sybille de La Hamaide; editing by Muriel Boselli; editing by Keiron Henderson)

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