TNAG-2029-FCO40-2891-Hong-Kong-freezing-of-Kuwaiti-and-Iraqi-assets-1990 — Page 81

RESTRICTED

061665 MDHIAN 917

PERFORMANCE BONDS

4.

THE COMMISSION ASKED MEMBER STATES WHETHER THEY ALLOWED PAYMENTS IN RESPECT OF PERFORMANCE BONDS, AND WHETHER THEY PERMITTED EXTENSIONS. MEMBER STATES EXPRESSED VARIED POSITIONS. NEUMANN REQUESTED THESE IN WRITING AS SOON AS POSSIBLE, SO THAT THEY COULD PRODUCE A SYNOPTIC DOCUMENT FOR MEMBER STATES' INFORMATION.

5. A NUMBER OF MEMBER STATES WERE IN FAVOUR OF REACHING A COMMON POSITION RAPIDLY ON THIS QUESTION. IRELAND SUGGESTED THAT THE COMMISSION SHOULD BRING FORWARD PROPOSALS FOR A COMMUNITY REGULATION. THE UK DISAGREED. WE WELCOMED THE CHANCE TO COORDINATE WITH OTHER MEMBER STATES, BUT A COMMISSION PROPOSAL WOULD RAISE DIFFICULT ISSUES OF COMPETENCE.

SUB-CONTRACTS

THE COMMISSION NOTED THAT GERMANY HAD ASKED ABOUT THE TREATMENT OF SUBCONTRACTS. AS A PRELIMINARY VIEW, THE COMMISSION THOUGHT IT WOULD BE NECESSARY ASSESS WHETHER THE EXECUTION OF SUB-CONTRACTS WOULD PROMOTE THE SUPPLY OF GOODS TO IRAQ OR KUWAIT: IF IT WAS CLEAR THAT THE MAIN CONTRACT WAS BLOCKED (EG WHERE THE MAIN CONTRACTOR WAS AN EC COMPANY) EXECUTION OF SUBCONTRACTS MIGHT BE PERMISSIBLE. MEMBER STATES SHOULD REFLECT

ON THIS QUESTION.

7.

PORTUGAL SAW AN INCONSISTENCY IN PERMITTING EXECUTION OF SUB-CONTRACTS ONLY WHERE THE MAIN CONTRACTOR WAS AN EC COMPANY: WHAT ABOUT CASES WHERE THE MAIN CONTRACTOR WAS A COMPANY INCORPORATED IN A NON-EC STATE (EG SWITZERLAND) WHERE SANCTIONS WERE PROPERLY ENFORCED? THE UK AGREED THAT A SPECIFIC GEOGRAPHICAL LIMITATION WOULD BE INAPPROPRIATE. EACH SUBCONTRACT SHOULD BE ASSESSED TO SEE WHETHER IT WOULD PROMOTE THE SUPPLY OF

GOODS TO IRAQ OR KUWAIT.

PROFESSIONAL SERVICES

8.

IN THE MARGINS, THE UK TOLD NEUMANN THAT ACCOUNTANTS AND LAWYERS WERE EXPRESSING CONCERN ABOUT THE IMPACT OF THE AMENDING REGULATION ON THE PROVISION OF ADVICE TO IRAQI AND KUWAITI CLIENTS. WE WOULD RAISE THIS AT THE NEXT MEETING.

KERR

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