BRUSSELS, March 1: European Union sugar experts will debate a proposal this week to remove subsidies on exports sent to western Balkan nations in a bid to clamp down on several documented cases of fraud, officials said.

Under a dispensation scheme to boost recovery of war-damaged western Balkan industries, the EU allowed several nations in the region to sell locally produced sugar to the 15-nation bloc free of duties and quotas. But there appear to have been abuses.

Now, the EU’s executive Commission wants to stop the usual subsidy payments to the bloc’s exporters who send sugar to the region, probably for a temporary period, until the trade flow between the Balkans and the 15-nation bloc is normalised.

Suspicions have long been rife that some Balkan dealers have sold sugar to the EU under the deal at around $600 per ton, by re-exporting material bought on world markets at around $200.

European sugar dealers say this practice has helped to destabilise local markets in Greece, Italy and Austria, although on an EU-wide scale, the quantities involved are insignificant.

Apart from Serbia and Croatia, the Balkan states of Bosnia-Herzegovina, Macedonia, Montenegro and Albania also benefit from EU trade concessions that allow duty-free imports of several other agricultural and fisheries products.

The EU’s sugar management committee will vote on the Commission’s proposal at its meeting on Thursday. Although the final details are still unclear, it does not include invoking a safeguard clause to suspend Balkan access to EU markets.

It seems that the Commission will come to the sugar management committee with a proposal to remove export refunds from consignments of sugar that are going to some, or all, of the western Balkans, one member state official said.

The three main unclear areas were the countries to which the refund removal might apply, the timeframe and products involved — possibly syrups and the small-quantity export refunds along with the EU’s fortnightly white sugar export tender, he said.

One method of applying the subsidy suspension could be to stipulate an exemption for certain Balkan countries along with the refund decisions made by the committee at its every meeting.

The committee could also agree a regulation setting a finite period of exemption. Some traders have suggested three months.

Exporters would now have to prove where their sugar has gone, which they haven’t had to do in the past. So there would be a big administrative burden, the official said.—Reuters