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U.S. Department of State

Diplomacy in Action

V. International Institutions and Initiatives


U.S. Government Assistance to Eastern Europe under the Support for East European Democracy (SEED) Act
Bureau of European and Eurasian Affairs
January 2003
Report
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SOUTHERN EUROPEAN COOPERATIVE INITIATIVE (SECI)

SECI was launched in December 1996, with U.S. support, to facilitate regional peace and stability through cooperative activities among the countries of Southeastern Europe (SEE), and to lay the foundation for their integration into the rest of Europe. SECI provides a mechanism for these countries -- Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Greece, Hungary, Macedonia, Moldova, Romania, Slovenia, Turkey and, most recently, the Federal Republic of Yugoslavia -- to cooperate on a regional basis to solve trans-national problems. An Agenda Committee composed of member government representatives determines priority projects, and working groups discuss problems, develop solutions, and seek project financing. In FY 02, SECI received technical staff support from the United Nations Economic Commission for Europe (UNECE), which was reimbursed with $75,000 in SEED funds. SECI's Vienna-based Coordinator, who receives administrative support from the OSCE to oversee SECI projects, received $125,000 in SEED funds for administrative and travel expenses.

In FY 02, SECI received an allocation of $4.42 million from the SEED regional and bilateral budgets. Of that, $3.5 million was drawn from the SEED country budgets of seven states (Albania, Bulgaria, Croatia, Macedonia, Montenegro, Romania, and Serbia) and was devoted to technical assistance in support of the SECI/World Bank program in the areas of customs reform and trade facilitation in SEE.

SEED-funded SECI activities in FY 02 focused on two priorities -- fighting cross-border crime and supporting the World Bank's Trade and Transport Facilitation in Southeast Europe (TTFSE) program.

SECI Anti-Crime Program

SECI devoted $542,000 in SEED funds to activities to fight cross-border crime in SEE. Twelve SECI states are parties to an agreement to share information to combat such crime, under which they established the SECI Regional Center for Combating Trans-Border Crime in Bucharest, Romania.

SECI Bucharest Center: The SECI participating states have placed special emphasis on combating cross-border crime and corruption. This emphasis is based upon two considerations: transnational criminal activities are detrimental to the social and economic development of the region; and, coming to grips with these well-organized cross-border activities requires border enforcement and regulatory agencies in the region to cooperate closely in interdiction efforts and measures to apprehend and bring to justice those engaged in such criminal activities. The principal criminal activity of mutual concern is smuggling, which encompasses goods lawfully in possession of the smuggler but smuggled to evade customs duties; stolen items; drugs; human beings; small arms; and precursors or ingredients for weapons of mass destruction. In efforts against the smuggling of human beings, there is an application to deny access to documents relevant to border crossings, which impacts not only the movements of illegal migrants but potential terrorists. Border personnel must be able to detect, identify, and interdict all these categories of smuggled goods.

The SECI Bucharest Center has been in operation since January 2001, and now functions as a regional focal point for the communication and transmission of "real time" law enforcement information on cross-border crime. It is staffed by 20 liaison officers (police and customs officers) from all SECI countries, working closely with law enforcement experts from most of the countries of Western Europe, Russia, Poland, Georgia, Ukraine, Azerbaijan, the U.S., and others. All participating states have deployed liaison officers to the Center. During 2002, the Center received about 5,000 requests for the exchange of information related to trans-border criminal activity in the region. The Center also operates on the basis of task forces in the field. Its four primary task forces target narcotics, commercial fraud, human trafficking, and terrorism (which consists of financial crime, small arms trafficking, and WMD), and include, inter alia, experts from international organizations, supporting states, and the region. The operational successes of several task forces merit mention. In September 2002, the human trafficking task force conducted "Operation Mirage," the first regionally coordinated and implemented activity in SEE in the Trafficking in Persons area. Operating for 10 days in September 2002, the enforcement action sought to identify and repatriate trafficked women and identify and investigate criminal groups involved in trafficking. In "raiding" 20,558 sites, Operation Mirage identified 1,738 women without transit identification, of whom 237 proved to be trafficked persons or potential victims of trafficking. Criminal procedures were undertaken against the 293 traffickers who were identified. In another regionally coordinated operation in June and July 2002, the Center's Task Force on Drug Trafficking implemented the first phase of its "Operation Containment," an interdiction effort designed to seize Southwest Asian heroin destined for Western European markets. Of the 29 drug seizures that occurred during the operation, 15 were of heroin -- a total of 583.9 kilograms. The average heroin seizure was of 38.9 kilograms, and the estimated value of the heroin seized was $10-17 million dollars.

INTERPOL and the World Customs Organization (WCO) have provided assistance, and serve as permanent advisors to the Center. SECI has also held discussions with EUROPOL and expects to develop a similar working relationship with it in the near future. SECI is also working with the Stability Pact's Organized Crime Initiative, which is viewed as instrumental in addressing the issues of combating crime and corruption in SEE. The U.S. has assigned officers to the Center from the Department of Justice (DOJ). The DOJ has provided guidance on several matters related to assisting the Center in cementing its legal protocols, developing rules of information exchange such as Mutual Legal Assistance Treaties, advising on the implementation of a regional prosecutorial working group, as well a witness/victim protection program. The Drug Enforcement Administration (DEA) is advising on implementing information process management, risk assessment, and intelligence analysis. The FBI and INS have assisted in the development of a regional human trafficking task force.

SECI Law Enforcement Task Forces: Within the SECI framework and in close coordination with the Center, SECI task forces work to combat cross-border crime and conduct law enforcement operations. FY 02 SEED funds totaling $542,000 have been transferred to the Center, and to U.S. law enforcement agencies directly, to support the following law enforcement operations:

  • $200,000 to support Operation Mirage, the first regionally coordinated and conducted activity in SEE in the Trafficking in Persons area.
  • $125,000 was transferred to the Drug Enforcement Agency (DEA) to support the Center and the Task Force on Trafficking in Narcotics.
  • $92,000 to support the organization of the Terrorism and Money Laundering Task Force.
  • $125,000 to support development of the Center's infrastructure.

Combating Global Terrorism

On September 14, 2001, the Joint Coordinating Committee (JCC) of the SECI Center unanimously adopted the Bucharest Declaration on the Suppression of Terrorism. The Declaration is meant to encourage the exchange of information among SECI participating states on criminal organizations that are closely tied to terrorism, including information on the financial resources and support of these groups. The JCC also approved a resolution on providing immediate assistance to the USG in the global investigation under way to identify and bring to justice those responsible for the September 11 terrorist attacks on the U.S. The Government of Turkey is serving as the project coordinator on this matter and has consolidated several task forces (Small Arms, WMD, and Financial Crime) under its umbrella.

Trade and Transport Facilitation in Southeast Europe Program (TTFSE)

This program addresses the need to achieve quicker, cheaper cross-border transit of goods in the region, while also fighting smuggling and corruption at border stations. Long delays in transiting international borders are considered a serious obstacle to trade and economic development. Accordingly, experts in this effort focused initially on the need for improved physical facilities. The SECI-supporting states, such as Austria, Italy, the Netherlands, and the U.S., provide technical assistance to the participating states that will help them to carry out comprehensive institutional reforms. The five key elements of this effort are: 1) physical infrastructure improvement; 2) trade facilitation training and related activities; 3) customs information management systems; 4) customs training; and 5) anti-corruption programs.

In cooperation with SECI and with $300,000 of FY 98 and FY 99 SEED funds, the World Bank in 1999 began a $1.15 million preparatory study of transport problems at border crossings in SEE, which the World Bank and Austria also helped to fund. On the basis of the study, the Bank developed a project proposal to assist six SEE countries (Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Macedonia, and Romania) to improve both the physical infrastructure of their border crossings and their customs services' internal operating procedures.

This Trade and Transport Facilitation in Southeast Europe (TTFSE) project will be a multi-year, joint effort of the World Bank, the U.S., and European counterparts. The U.S. and selected European governments are providing technical assistance to participating countries to reform their customs services and facilitate trade in the region. These funds are expected to leverage about $68 million in World Bank loans to the region for the physical improvement of border crossing facilities in the six participating countries.

The Department of State invested $3.9 million of FY 02 SEED funds in TTFSE. Of that, the U.S. Customs Service (USCS) received $3.5 million to provide technical assistance to customs reform projects in Albania, Bulgaria, Croatia, Macedonia, Montenegro, Serbia, and Romania, in support of the World Bank project. Border advisory teams in Bulgaria, Croatia, Macedonia, and Romania are working with host border services, customs, police, and national security agencies to address TTFSE project requirements. Work being performed includes developing workload, productivity, and performance indicators; creating performance monitoring systems; establishing Port Pilot sites and testing of new procedures; enhancing cooperation among border control agencies; training prosecutors and magistrates in customs laws and procedures; and help to develop legal and regulatory amendments to customs codes, where needed.

USCS is also supporting the Regional Steering Committee (RSC) of the TTFSE project. The RSC is composed of one high-level official from each of the seven countries (Albania, Bosnia, Bulgaria, Croatia, Macedonia, Romania, and the FRY) participating in the TTFSE project and obtaining loans from the World Bank. The RSC was established under the World Bank Memorandum of Understanding to oversee overall implementation of the Bank's regional program. It considers information submitted by each country on the status of the border crossings being improved under the loan and reviews any obstacles to or delays in trade and transit among themselves. The obligation is being used to fund Customs advisers and staff assistance to the RSC to help it meet its objective outlined above. In order to coordinate customs reform efforts in each country (e.g., parallel reforms at twinned Port Pilot sites), USCS has created a regional management team to address coordination, commercial fraud, and anti-corruption issues. The regional team is the primary liaison with the World Bank and also coordinates with USAID's SEED-funded trade facilitation projects, the EC's customs reform efforts, related USG law enforcement assistance in the region, and other SECI activities such as the transport bottlenecks working group, the "PRO" committees, and the SECI Center. The regional team is also implementing a region-wide anti-corruption program, targeting border control agencies that will look at personnel laws and practices, employee hiring and vetting, compensation plans, codes of conduct and disciplinary systems, and ethics training. A consultant from the UNECE is acting as the Secretariat for the Regional Steering Committee (RSC) of TTFSE, paid for with $75,000 in SEED funds.

For TTFSE to be effective, those directly engaged in cross-border transit activities must know the relevant laws, regulations, and practices. The Department of State's Bureau of Educational and Cultural Affairs has approved and begun to implement a proposal, submitted by a consortium of three regional educational institutions (Bulgarian, Greek, and Turkish), for a joint training program for public and private sector personnel from throughout the region. SEED funds totaling $775,000 were allocated for this project in 2002.

STABILITY PACT FOR SOUTHEASTERN EUROPE

The Stability Pact is an important component of U.S. cooperation with the European Union (EU) to promote peace and stability in Southeastern Europe (SEE) and further to integrate the region into European and trans-Atlantic institutions. Since it was launched in the summer of 1999, the Pact has served as an important vehicle for fostering regional cooperation, and as a mechanism for coordinating international assistance and encouraging continued Western European focus on the region. Since the Pact's inception, more than $6 billion in assistance has been provided to the region, over 90 percent of which was pledged by European countries.

The Pact's activities are organized under three Working Tables: Table I -- Democratization and Human Rights; Table II -- Economic Reconstruction, Development, and Cooperation; and Table III -- Security Issues.

Several USG Agencies implement programs that contribute directly or indirectly to the objectives of one or more Stability Pact initiatives. In FY 02, while only about $5 million from the SEED Regional Budget was allocated in direct support of Stability Pact initiatives, much more was contributed from the individual country budgets and through the AID-administered regional budget. SEED-funded programs that contributed directly to Stability Pact activities focused on the following main areas: Working Table I (media, reconciliation, and education); Working Table II (Sava River initiative, energy, infrastructure, trade cooperation, improvement in investment climate, and e-commerce); and Working Table III (combating human trafficking, the fight against corruption, and disaster prevention and preparedness). Virtually all Stability Pact programs are supported by multiple donors, with the U.S. often playing a minor role.

Working Table I (Democracy and Human Rights)

Through USG assistance activities both within and outside the Stability Pact framework, the U.S. has carried out many programs to promote the rule of law and democracy in SEE. The four priorities under Working Table I are refugee returns, media, inter-ethnic relations and cross-border cooperation, and education and youth. FY 02 SEED funds have been used primarily to support activities in the areas of the media and education. In addition, significant funding has been provided by the State Department's Population, Refugees, and Migration Bureau to support the objectives of the Stability Pact's Refugee Return Initiative. During 2002 alone, more than 135,000 people either returned or became locally integrated, including over 70,000 refugees who returned to their former homes. For the first time since the Balkan crisis began, the number of displaced persons and refugees has fallen below one million. More details on SEED support to the Media and Education and Youth Task Forces follow below:

Media: Through its media assistance, the U.S. has helped National Media Working Groups in each Stability Pact country to carry out projects deemed by them to be of the utmost importance in furthering the development of free and independent media in their countries. Examples of projects being carried out with these funds include work on frequency mapping in Albania to allow the National Council for Radio and Television to issue broadcast licenses fairly and effectively; freedom of information legislation in Serbia and Montenegro; and development of new media and/or broadcast laws in Croatia and Macedonia. USG assistance also supported TV productions that promote independent media, including: "Media's Confrontation with Truth" and "Breakdown of the JNA (the Yugoslav National Army)."

Education and Youth: The Education and Youth Task Force, a platform of almost 40 members (experts, representatives of countries, NGOs, and associations from different countries), deals with six priority areas for education reform: policy development and system improvement, higher education, vocational education and training, young people, education for democratic citizenship and management of diversity, and history and history teaching. As part of its contribution to the work of the Task Force, the USG continues funding for development of a web-based network of local government officials in SEE and to educate governments of the region on the benefits of fiscal decentralization. The USG also supported the Balkan School of Political Studies through funding programs aimed at professionalizing government service. Through the Southeast Europe Youth Leadership program, implemented by the State Department's Education and Cultural Affairs Bureau, 88 secondary school students and educators from the Balkans participated in an exchange program. This program was designed to develop leadership skills, foster relationships among youth from different ethnic and religious groups, and help participants to understand the meaning of civic participation and the rights and responsibilities of citizens in a democracy. The USG also provided funding for two History Teaching projects through the Center for Democracy and Reconciliation in Southeast Europe, as well as a program implemented by Partners for Democratic Change, all of which fall under both education and reconciliation. The Partners program is co-financed by the Dutch Government, while the CDRSEE program is jointly funded with the Germans.

Working Table II (Economic Reconstruction and Development)

The main priorities under Working Table II are trade liberalization and facilitation, fostering private investment, and regional infrastructure and environment (including e-commerce). To varying degrees, SEED funds have been used to support all of these directly.

Trade Facilitation: The Commercial Law and Development Program (CLDP) of the Department of Commerce ($2.25 million) has been instrumental in helping SEE countries cooperate to reduce barriers to trade and investment, while building mechanisms necessary for increased international and regional trade and investment. Its work has contributed significantly to the near completion of a regional network of Free Trade Agreements (17of 21 FTAs were completed by the end of 2002). This network, when finished in early 2003, will enlarge the regional market to 55 million consumers, creating better conditions for private investment and economic growth and facilitating the longer-term integration of the SEE countries into EU structures. According to the Stability Pact MOU signed in June 2001, the FTAs are to be in conformity with WTO rules and result in significant tariff reductions and the elimination of non-tariff barriers. As longer-term goals, the MOU also includes a comprehensive program to manage a wide range of trade policy issues, including trade in services and intellectual property rights.

The Investment Compact: The U.S. provided $250,000 in FY 02 funds toward the implementation of the Stability Pact's Investment Compact for Reform, Investment, Integrity, and Growth. The Investment Compact's objective is to lay the economic and structural policy foundations for sustained growth and development in SEE. The U.S. was instrumental in bringing greater focus to the Investment Compact in 2002. The new Compact strategy calls on the countries of the region to commit to a number of specific policy actions that will result in an improved investment climate within a limited period of time. Even without these changes, the peer review and monitoring mechanisms built into the Compact were instrumental in keeping SEE governments focused on the necessary economic reforms.

E-SEE: The E-Southeast Europe (E-SEE) initiative's main objective is to support the use of information and communications technology in the region's economic, political, and educational development. In FY 02, the U.S. provided additional funding to the School Connectivity Project for Southeast Europe. This project, which is implemented by the State Department's Educational and Cultural Affairs Bureau, aims to enhance the use of the Internet in SEE secondary schools, while promoting inter-ethnic dialogue among schools in different countries of the region. It also seeks to engage U.S. and SEE schools in multipartite linkages to expand the dialogue and promote mutual understanding. FY 02 funds were used, in particular, to bring Serbia into the program. (See the Public Diplomacy chapter for additional details.) Separately, CLDP used FY 01 funds to co-sponsor with the FRY (in its SEECP presidency role) a regional telecommunications policy conference and to hold a five-day telecommunications regulatory workshop in Washington, D.C. Both of these very successful events were closely coordinated with the EU and helped set the framework for telecommunications policy and regulations in SEE.

Infrastructure: USAID provided valued assistance in the infrastructure field under its Energy and Regional Infrastructure projects. (See the AID chapter on regional programs for additional details.)

Sava River: The Stability Pact was instrumental in providing the Sava River riparian states with a framework for negotiating and concluding within record time an International Framework Agreement to establish navigation and protect the environment and natural resources of the Sava River Basin. Representatives of the four countries (Bosnia-Herzegovina, Croatia, Slovenia, and the FRY) hailed the agreement as an historic first link among their countries. Using SEED funds, the U.S. provided critical legal and technical expertise and secretariat support to these talks. Without SEED funding, the agreement would not have been concluded so quickly.

Working Table III (Security and Defense/Justice and Home Affairs)

Initiatives under Working Table III fall under two sub-tables: "Security and Defense" and "Justice and Home Affairs." SEED funds have been used to help implement initiatives under each of these sub-tables.

Security and Defense

The priorities under this sub-table relate to arms control and security sector reform, mine action and small arms/light weapons, and disaster preparedness and prevention. During FY 02, the South Eastern Europe Regional Clearing House for the Control of Small Arms and Light Weapons (SEESAC) was established in Belgrade, to foster regional cooperation in countering the cross-border flow of small arms and light weapons (SALW). The U.S. provided $500,000 (of the total $1.68 million committed by other donor states) toward the development of an incinerator project to destroy almost 12,000 tons of small arms and ammunition in Albania. Under the SALW Initiative, the Stability Pact had succeeded in destroying more than 280,000 weapons through mid-2002.

Disaster Preparedness and Prevention: SEE is prone to disasters that transcend borders or overwhelm the capacity of a single country to cope. As the level of preparedness to deal with these threats varies from country to country, and there is insufficient regional cooperation, the Stability Pact's Disaster Preparedness and Prevention Initiative (DPPI) was launched in 2001 to provide a framework for regional cooperation. In concert with contributions from the governments of Switzerland ($120,000) and Norway ($89,000), the U.S. provided $250,000 in SEED funds in FY 02 to fund a number of specific projects and the operations of a one-person expert DPPI Secretariat. The first regional DPPI disaster preparedness and prevention exercise involving 12 states, which was facilitated by the Secretariat, took place in June 2002. Titled "Taming the Dragon," the exercise focused on cross-border techniques for fighting brush and forest fires in the region and leveraging available resources to the maximum extent possible to improve disaster preparedness. This Initiative has developed into an effective consultative and coordination mechanism in fostering regional disaster preparedness and prevention.

Justice and Home Affairs

The three priorities under this sub-table are the fight against corruption and organized crime, migration and asylum (including trafficking in human beings), and law enforcement/institution building. FY 02 SEED funds have been used to support implementation of initiatives under the first two priority areas.

Anti-Corruption: The Stability Pact's Anti-Corruption Initiative (SPAI) is based on four principles of action to develop institutional mechanisms and lay the foundations for the sustained fight against corruption in SEE: country ownership, regional cooperation, civil society involvement, and international coordination. Since the Initiative's inception, there has been significant progress. All countries in the region have signed the SPAI Anti-Corruption Compact, committing themselves to take specific actions to fight corruption, including working closely with civil society on reform. All countries have appointed Senior Representatives to oversee implementation of the Compact and have developed National Action Plans to combat corruption. A SPAI Secretariat, comprised of senior anti-corruption experts from the OECD and the Council of Europe, has completed a comprehensive diagnosis of current policy conditions in the SEE countries, with recommendations for reform. The Secretariat also provides technical assistance to help countries move ahead on their reform priorities. In FY 02, the U.S. committed $335,000 in SEED funds to support country-specific anti-corruption projects and the relocation of the SPAI Secretariat Office to a capital in the region. The relocation of this office to the region is expected to enhance anti-corruption activities through regional ownership and leadership of the Initiative.

Human Trafficking Task Force: Led by an Austrian expert, the Stability Pact's Task Force on Trafficking in Human Beings has prepared a multi-year strategy to promote international coordination and avoid duplication of efforts, identify sustainable solutions, and focus activities on the most urgent aspects of the trafficking problem in SEE. Countries of the region, with help from the Task Force, have taken major steps toward developing anti-trafficking policies. All have set up national working groups, nominated governmental coordinators, and developed National Plans of Action, and in December 2002 approved an initiative to grant legal status and temporary residence to trafficking victims to aid in the prosecution of traffickers. In FY 02, the U.S. provided $300,000 in SEED funds for projects in the region (training, legislative reform, safe houses) to spur the development of anti-trafficking policies.

INTERNATIONAL COMMISSION ON MISSING PERSONS IN THE FORMER YUGOSLAVIA

In 1996, following the cessation of hostilities and the signing of the Dayton Peace Accords at the end of 1995, the long and difficult process of searching for those who remained unaccounted for began in earnest. In 1996, the International Commission on Missing Persons for the Former Yugoslavia (ICMP) was created, at the G-7 Summit in Lyon, France. ICMP is an organization whose exclusive focus is on assisting families, regardless of their ethnic or religious origin, in determining the fate of loved ones lost during the armed conflicts in the former Yugoslavia during the 1991-1999 period. SEED funds are used to support ICMP activities in Bosnia-Herzegovina, Croatia, Macedonia, Serbia, and Kosovo. Those activities include: building the political will of regional governments to release information and their capacity to address the missing persons issue; an innovative, sustainable process for the exhumation and identification of mortal remains; and civil society initiatives to address the missing persons issue. The Netherlands is the other major donor to ICMP, followed by Denmark, Germany, Iceland, Norway, Sweden, Switzerland, the United Kingdom, and the Vatican.

DEBT REDUCTION AND RESCHEDULING IN CENTRAL AND EASTERN EUROPE

In November 2001, the U.S. Government participated in an extraordinary Paris Club debt treatment for Yugoslavia, in which about $2.7 billion in debt was cancelled and $1.6 billion was rescheduled. As part of that arrangement, the United States forgave about $354 million of Yugoslavia's bilateral debt, at a cost of about $35 million to the U.S. Treasury. Approximately $21.5 of that was SEED Act money, with the remainder coming from Economic Support Funds (ESF).

EBRD TRUST FUND

In FY 02, the U.S. provided $5 million in regional SEED money to a Special Fund at the European Bank for Reconstruction and Development (EBRD) to support loans to micro, small, and medium-sized (MSME) enterprises in Southeastern Europe. This complements the $21 million that the U.S. provided earlier in FY 00 and FY 01 SEED funds. The program extends technical assistance and training to financial intermediaries to strengthen their lending capacity, with the goal of creating financially sustainable MSME lending programs, as well as loan funds that are supplemented by EBRD loans. To date, banks in Albania, Bosnia-Herzegovina, Bulgaria, Romania, Serbia, and Kosovo have received support under this program. In 2002, these banks supported 28,000 loans and disbursed $183 million to micro and small enterprises. The $5 million in FY 02 SEED regional money will be used to support a new program in Macedonia and possibly Montenegro, and will support the branch expansion of banks currently being supported under the program.



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