* Bank says responded to requests from export traders
* France has approved use of frozen Syrian funds for food
* Released assets help Syria secure imports during war
By Gus Trompiz
PARIS, Nov 21 Paris-based Union de Banques
Arabes Francaises (UBAF) said on Thursday it had agreed to
release Syrian funds to pay for food deals, suggesting Damascus
is making headway in its complex moves to finance imports of
Western countries have imposed sanctions on President Bashar
al-Assad's government, but these do not apply to food and France
has cleared the use of frozen Syrian assets as part of a
European Union scheme that allows funds to be used for
Assad had hoped to achieve self-sufficiency in food to help
sidestep the sanctions, but the war has caused the worst harvest
in nearly three decades, leaving Syria's population increasingly
reliant on food aid.
The United Nations said it delivered food to a record 3.3
million people in October, up from 2.7 million the previous
month, and that civilians were going hungry in besieged areas.
"At the request of trading house clients who had previously
obtained an export permit from the French Economy and Finance
Ministry, UBAF has accepted, in this context, to conduct the
payment of humanitarian/food products destined for Syria," UBAF
said in an emailed response to Reuters.
"To this end, the Economy and Finance Ministry has
authorised the use of frozen funds of Syrian banks that are in
our books," said the bank, whose core activity is trade finance,
mostly in relation to Arab countries.
UBAF's statement confirmed comments made by the head of
Syria's General Foreign Trade Organisation to Reuters on Sunday,
saying the bank had agreed to release funds.
No one at UBAF was immediately available to respond to
requests for further details. The French Finance Ministry was
not available either to provide details about Syrian assets.
While foodstuffs are not covered by the sanctions, banking
sanctions and asset freezes imposed by Washington and Brussels
have created a climate that had made it difficult for some
trading houses to do business with Damascus.
Commodity traders say access to frozen assets has helped the
Syrian government complete import deals for staples such as
wheat and partly alleviate supply problems caused by the
two-and-half year civil war.
As part of these flows, several cargoes of wheat and barley
have been shipped from France since the start of 2013.
But the Syrian authorities have repeatedly failed to
conclude sugar and rice purchases in international tenders,
highlighting continued difficulties in securing food imports.
Unlisted UBAF is owned by Credit Agricole Corporate &
Investment Bank, part of French bank Credit Agricole,
which has a 47 percent stake, and a bloc of Arab banks that hold
the remaining capital.
In a note this week, credit rating agency Fitch said a
decrease in trade finance business in countries such as Egypt,
Libya and Syria put pressure on UBAF's profits in the first half
of 2013. In 2012, UBAF made a group net profit of 16.8 million
euros ($22.62 million).
($1 = 0.7428 euros)
(Editing by Alison Williams)