DUTCH DISCOURAGED ABOUT EU EFFORT TO DEFINE FRY

1.(C) SUMMARY: DUTCH MFA OFFICIALS ARE DISCOURAGED AT THE
VERY SLOW AND POOR QUALITY EU EFFORT TO DEFINE A FRY WHITE
LIST TO BUTTRESS THE SANCTIONS REGIME. THEY NOTE A CLEAR
LACK OF FRENCH, ITALIAN AND GREEK EFFORT TO MEET EU POLITICAL
COMMITMENTS TO DEFINE A MEANINGFUL LIST AND EXPECT THE END
PRODUCT TO BE OF QUESTIONABLE REAL ENFORCEMNT VALUE.
NEVERTHELESS, THEY SAY THEY ARE AT LEAST RELIEVED THAT THE EU
IS NOT NOW ARGUING ABOUT HOW TO DISMANTLE THE "ENERGY FOR
DEMOCRACY" PROGRAM. THEY CAUTION THAT, SHOULD THE TENSION IN
BELGRADE SOON SUBSIDE, STRONG EU MEMBER STATE PRESSURE TO
WATER DOWN FINANCIAL SANCTION EFFORTS AND THE OIL DELIVERY
BAN WILL START REAPPEARING IN EU PROCEEDINGS. END SUMMARY.


2.(C) IN 6/5 DISCUSSIONS WITH MFA BALKANS OFFICE AND EU
AFFAIRS OFFICIALS, THE DUTCH EXPRESSED A BROAD
DISSATISFACTION WITH THE EU'S EFFORT TO DEFINE A FRY
SANCTIONS "WHITE LIST." THEY CONCUR THAT THE EUROPEAN
COMMISSION IS SEVERELY UNDER-RESOURCED TO PERFORM THE TASK,
BUT SEE THAT STAFFING OBSTACLE AS SECONDARY TO GENERAL EU
MEMBER STATE RELUCTANCE TO PROVIDE ENFORCEMENT MECHANISMS
THAT MATCH POLITICAL COMMITMENTS. MFA EU COORDINATION
OFFICIALS STATED THAT, WHILE IT IS WORTH NOTING THAT THE EU
AT LEAST IS EMBARKING ON A SANCTIONS REGIME, THERE IS STILL
BROAD TENSION BETWEEN MANY MEMBER STATES AND THE COMMISSION
OVER THE QUESTION OF WITH WHOM GENERAL ENFORCEMENT
IMPLEMENTATION POWERS LIE. TO THIS THEY ADD THAT THERE IS
LITTLE REAL CONSENSUS TO ADD TEETH TO THE POLITICAL
STATEMENTS ABOUT THE EU FRY SANCTIONS REGIME. THE DUTCH
REPORT A CONTINUING CORE OF UK/NL RESOLVE TO PUSH FOR A
COMMISSION-LED EU SANCTIONS REGIME THAT FINANCIALLY PRESSURES
MILOSEVIC. ON THE OTHER HAND, THEY ARE TO QUICK TO NOTE
THEIR EFFORTS ARE OFFSET BY BROAD EU SLUGGISHNESS ON THE
QUESTION AND ANIMOSITY TO SUCH STEPS BY PARIS, ROME AND
ATHENS.
THE DUTCH ALSO FREELY CONCEDE THAT EVEN THEY LACK THE
PERSONNEL TO DO MUCH MORE ON SANCTIONS ENFORCEMENT THAN THEY
ALREADY DO. THEY SAY THAT THEY CANNOT EASILY SURGE BEYOND
THE 3-4 FULL-TIME EQUIVALENTS THAT THEY JOINTLY DEDICATE TO
THE EFFORT BETWEEN THE FOREIGN, FINANCE AND COMMERCE
MINISTRIES.


3.(C) AS A CASE IN POINT, DUTCH OFFICIALS HIGHLIGHT THE
DUTCH AND UK STRONG VETTING EFFORTS ON THE WHITE LIST. THE UK
HAS DEMARCHED EU STATES TO WORK HARD TO MEET THE JUNE 30
DEADLINE AND PRESENT CREDIBLE CANDIDATE BUSINESSES. THE DUTCH
SAY THAT THEY HAVE ONLY SUBMITTED TWO NAMES FOR COMMISSION
CONSIDERATION FOR THE WHITE LIST. UNDERCUTTING THIS
SERIOUSNESS OF APPROACH, THEY REPORT THAT STOCKHOLM HAS
SUBMITTED A SLATE OF 2,500 TO 3,000 CANDIDATE COMPANIES WHILE
PARIS' SUBMISSIONS WERE MEASURED IN WEIGHT, COMING IN AT
25-30 KILOS.


4.(C) ACCORDINGLY, THE DUTCH PREDICT THAT THE JUNE 20 REVIEW
MEETING SET TO ORGANIZE THE JUNE 30 ANNOUNCEMENT LIKELY WILL
OVERSEE COMPILATION OF A POORLY VETTED LIST THAT MEETS THE EU
POLITICAL COMMITMENT TO DEFINE SUCH A PRODUCT, BUT WHICH WILL
LACK CREDIBILITY AS A REAL ENFORCEMENT TOOL.


5.(C) SEVERAL MFA OFFICIALS FAMILIAR WITH RECENT EU
DELIBERATIONS ON THE BALKANS AND SANCTIONS HAVE MADE CLEAR
THE LIMITS THAT THEY PERCEIVE THE EU IS REACHING ON BALKANS
SANCTIONS. THEY COMMENT THAT, WHILE EU LEADERS POLITICALLY
WOULD FEEL VULNERABLE IF THEY SAID NOTHING IN THE FACE OF
BELGRADE'S ONGOING REPRESSION, THERE IS STILL NO BROAD EU
RESOLVE TO MATCH WORDS WITH ENFORCEMENT DEEDS. THEY ADD THAT
UNTIL THAT RESOLVE MATERIALIZES IT IS NOT WORTH THE EFFORT OF
TRYING TO SECOND PERSONNEL TO THE COMMISSION OR CHIP IN FROM
SCARCE NATIONAL RESOURCES WITH VETTING THE WHITE LIST DRAFT.


6.(C) COMMENT: DESPITE THE GENUINE DUTCH DISCOURAGEMENT OVER
DEFINING THE WHITE LIST, THEY STILL CAUTIOUSLY IMPLY THAT THE
U.S. MIGHT CONSIDER BEING GLAD FOR WHAT WE HAVE: THAT IS,
THE MOMENTARY ABSENCE OF AN ALL-OUT EU DRIVE TO DISMANTLE THE
EXISTING FRY SANCTIONS REGIME. THEY SIGNAL THAT WE SHOULD
NOT UNDERESTIMATE HOW CLOSE TO THE SURFACE THOSE SENTIMENTS
ARE IN EUROPE. IT IS PROBABLY WORTH NOTING THAT THE DUTCH
ALSO SEEM TO BE TIRING OF WADING UPSTREAM AGAINST A STRONG
CURRENT OF FRENCH, ITALIAN AND GREEK NEGATIVE SENTIMENT. IT
IS CLEAR THAT, IN DISCUSSIONS OF EU FRY SANCTIONS
DELIBERATIONS, THEY ALSO ARE TAKING PAINS TO DEFLECT
ANTICIPATED U.S. PRESSURE AWAY FROM THE HAGUE. END COMMENT.
FENDRICK