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Romania: Previous Government Charged With Smuggling Oil To Serbia

Prague, 13 March 1998 (RFE/RL) -- A criminal trial next week in Timisoara will test allegations that Romania's previous government smuggled fuel to Serbia through a secret pipeline for 18 months in violation of international sanctions.

Five ex-managers of the state-run Solventul refinery, including former General Director Peter Marin, go on trial next Friday (March 20) on charges of conspiring and smuggling fuel to a Serbian refinery at the Danube River port of Pancevo. The charges specify that about 8,000 tons of gasoline and 38,000 tons of diesel passed into Serbia through an underground pipeline from the Timisoara refinery between October 1993 and March 1995. The deliveries violated the United Nations' wartime sanctions against rump Yugoslavia.

Marin's attorney, Viorel Pasca, says exports of that magnitude could not have been made from a state refinery without "official protection." He says Romania's leading political figures and secret police knew about the secret pipeline and its use for deliveries to Serbia's "HIP Pancevo" refinery about 10 kilometers east of Belgrade.

Last September, Romanian President Emil Constantinescu accused his ex-communist predecessors of orchestrating the systematic smuggling of $7 million worth of fuel to Serbia.

Similar charges surfaced on Saturday when the former chief of the SRI domestic secret service, Virgil Margureanu, told a press conference that the fuel shipments were the result of a "political decision." Margureanu said the shipments were approved by Romania's Supreme Defense Council. He did not specify the names of any government officials involved. But the Defense Council at the time was headed by then-President Ion Iliescu, a former high-ranking Communist Party official who turned Socialist after 1989.

Margureanu retracted his statements this week after they appeared in two national newspapers. He claimed he had been speaking about humanitarian aid deliveries that also had been approved by international monitors. But an RFE/RL correspondent who recorded Saturday's press conference confirms that Margureanu was clearly speaking about outlawed fuel shipments. Further, former Foreign Affairs Minister Teodor Melescanu told RFE/RL that U.N. embargo monitors never approved any shipments of humanitarian aid or fuel from Romania to Serbia during the war in Bosnia-Herzegovina.

Melescanu also denies that his government was behind the smuggling. Iliescu's political party (note: Party of Social Democracy in Romania) said this week it is not likely that the former president knew about the shipments.

Nevertheless, the allegations of government involvement are expected to form the basis of the defense strategy for the five former Solventul managers. Marin's attorney has said that he will call on Margureanu to testify. Margureanu's remark that the shipments were part of a 1993 "political decision" could raise questions at the trial about relations between Belgrade and Bucharest following their so-called "ships-and-locks war" earlier that year.

The United Nations Security Council placed an oil embargo on rump Yugoslavia in 1992 because of Belgrade's role in the war in Bosnia-Hercegovina. The embargo was lifted at the end of 1995. Romania's decision to join the international embargo was seen in 1992 as an effort to improve its image in the West and break its relative political isolation. But enforcement of restrictions on Danube River traffic put Romania in direct confrontation with Belgrade.

In late 1992 and early 1993, Romania stopped a series of Serbian tugboats that were pulling barges with crude oil thought to have come from Ukraine. Belgrade responded by detaining several Romanian ships in Serbian ports. It also ordered the closure of a Serbian lock to Romanian vessels, a move that brought Danube traffic to a halt.

Meanwhile, Serbian tugboats like the "Bihac" blocked traffic at Romanian locks by positioning themselves in the narrow transport channels nearby. Belgrade had shown that if Romania would stop barge traffic to Serbia, then Serbia could stop Romanian traffic on the Danube River from reaching Austria and Germany further to the West.

At first, Iliescu denounced Belgrade's moves and pledged to coordinate future actions with other countries along the Danube. In February of 1993, Iliescu told NATO officials in Brussels that Romania was committed to fulfilling its embargo obligations.

But a week later, after meeting with rump Yugoslav President Dobrica Cosic in Bucharest, Iliescu told journalists that he was not happy about strict adherence to the UN sanctions. He said that the sanctions were "an embargo against (Romania), too." Cosic left the meeting with praise for Romania as a "reliable friend."

Cooperation in the border area near Timisoara played an important role in economic relations between the two countries before the UN embargo took effect. The region also has a long history as a haven for smugglers. One of the most important aspects of trade before 1992 had been the energy sector. Romanian oil exports covered about 15 percent of Yugoslavia's oil needs. Most Russian oil, which accounted for 22 percent of Yugoslavia's needs, reached refineries at Pancevo and Novi Sad after passing through Romania.

Belgrade also delivered cheap electricity to Romania from a joint Romanian-Yugoslav hydroelectric station on the Danube. With limited energy resources and scarce hard currency reserves, Romania was particularly sensitive in 1993 to political events that might effect its energy policy. Serbia's blockade of the Danube showed that Romania also was vulnerable to other forms of Serbian pressure.

Romanian newspapers and western analysts this week have speculated that shipments from Timisoara to Serbia probably were greater than the 46,000 tons of fuel specified in the court charges.

But it is curious that the deliveries specified in the Solventul case are roughly equal to the amount of oil that had been delayed by Romania during its conflict with Belgrade several months before the secret pipeline deliveries began.