Euro Court Slams UK Bank Over Drugs

The European Court of Justice has ruled against action taken by the Bankof England for the UK Treasury in refusing to allow the transfer of Yugoslav funds to Centro-Com Srl of Italy, to pay for drugs and medical products exported from Italy to Montenegro.

In May 1992, the United Nations imposed sanctions on the former Yugoslavia (Serbia and Montenegro) under Resolution 757, but these excluded goods for medical purposes and foodstuffs. In June 1992, the Bank of England indicated that it would consider applications to debit Serbian and Montenegrin accounts "where payments were made for charitable or humanitarian purposes," ie for medical and similar exports, from the UK or another country.

Centro-Com exported 15 consignments of drug items and blood-testing equipment to wholesalers in Montenegro in October 1992-January 1993, after obtaining approval from Italy and the UN Sanctions Committee. But the Treasury changed its policy because of reports of abuse of authorization procedures, including misdescription of goods, and restricted payment authorization to ex-UK exports only.