* Rice, sugar tenders delayed awaiting frozen funds
* Large bid bond tender condition may be altered
* Responsibility for approval to unlock funds lies with trading firms (Adds details, background)
By Maha El Dahan
ABU DHABI, Nov 17 (Reuters) - Syrian bank accounts frozen abroad are gradually being freed up for use to fund food purchases, the head of Syria’s General Foreign Trade Organisation (GFTO) told Reuters on Sunday, with France being the most committed to releasing the money.
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.
The Paris-based Union De Banques Arabes Francaises (UBAF) has approved the release of funds for purchases, Tarek al Taweel, Director General of GFTO, said over the telephone.
“UBAF bank in France has been very cooperative,” Taweel said.
France in September 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.
UBAF was not immediately available for comment when contacted through phone and e-mail.
Syria’s GFTO has been trying in vain for several months to buy sugar and rice in international tenders using funds frozen abroad. One of the reasons cited by traders was a failure to secure permission from governments to free the funds.
“The problem is not with us, the problem is that the traders have to seek the approval for unlocking the assets,” Taweel said.
GFTO is seeking 135,000 tonnes of long or short grain white rice and 276,000 tonnes of white sugar in two separate tenders. The deadline for sugar offers is Nov. 27, while that for rice is Nov. 26.
GFTO has asked for the same amounts of sugar and rice with the same conditions four times, and Taweel said he expected to face the same issues that hampered previous tenders when the new bids are reviewed at the end of the month.
“We have to ask that the traders have the approval to unlock funds alongside their offer, otherwise we cannot do business,” he said.
“This is what is hindering the process and the problem still exists.”
Apart from requiring prior approval to unlock frozen assets, traders have also said the low number of offers was due to tender conditions that do not reflect the risk involved in doing business with a country embroiled in civil war.
The requirement to place a one million euro ($1.4 million) bid bond was listed as one of the tender terms keeping traders away.
A bid bond is a form of guarantee which tender participants must give to ensure they will deliver under the terms of their offer.
Taweel said the one million euro bid bond condition would remain as long as some traders continued to make offers based on it.
“We might consider changing that term if it becomes an issue but so far traders have been willing to offer under these conditions,” he said.
Despite difficulties in buying food through government tenders, some deals struck through middlemen outside of the tender process have secured food for the country.
The Syrian state grain agency Hoboob said in October it concluded a deal to import 500,000 tonnes of wheat of which around 150,000 tonnes had arrived in Syria. That purchase was done outside the tender process through a local Syrian firm. (Editing by Keiron Henderson)