Clinton to Lift Sanctions on Yugoslavia, Except for Those Critical to Milosevic's Fate

President Clinton is to announce on Thursday that he will lift many of the trade and economic sanctions against Yugoslavia that were intended to speed the fall of Slobodan Milosevic, with the understanding that the new government will face international pressure to deliver Milosevic to justice. The move is seen as a key step in normalizing relations with Yugoslavia and paving the way for economic recovery.

Key Takeaways:

• The Clinton administration will immediately lift the ban on American flights and an embargo on oil to Yugoslavia, with further sanctions to be lifted over the next several weeks.
• The "outer wall" of sanctions, including the World Bank and International Monetary Fund embargoes, will remain in place until the US has discussed Milosevic's fate with the new government of President Vojislav Kostunica.
• The lifting of sanctions is expected to boost economic recovery in Yugoslavia, with the ability to trade with the US seen as a critical prerequisite for rebuilding.
• The administration may be satisfied if Milosevic stands trial in Yugoslavia, rather than being turned over to the international criminal tribunal in The Hague.
• US diplomats are expected to arrive in Belgrade in the coming days to begin discussing economic normalization and cooperation with the new government.
• The Treasury Department's Office of Foreign Assets Control is working to track financial flows out of Yugoslavia, with evidence of Milosevic's cronies attempting to funnel millions of dollars out of the country.
• There is debate in Washington over the extent to which economic sanctions contributed to Milosevic's downfall, with some officials crediting sanctions for raising popular discontent and others arguing they played a modest role at best.

Statistics:

• The Clinton administration will lift the ban on American flights to Yugoslavia immediately, with further sanctions to be lifted over the next several weeks.
• An estimated millions of dollars are believed to have been funneled out of Yugoslavia by Milosevic's cronies in the wake of his ouster.
• The US has invested millions in efforts to track financial flows out of Yugoslavia, with the Treasury Department's Office of Foreign Assets Control working to crack down on these transactions.

Sources:

• Senior administration officials, speaking on condition of anonymity.
• William Montgomery, coordinator of the office of Yugoslav affairs.
• James C. O'Brien, special adviser to the president for democracy in the Balkans.
• Richard N. Haass, scholar, Brookings Institution.
• Page A10.