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DATE=10-12-2000

TYPE=CORRESPONDENT REPORT

NUMBER=2-267832

TITLE=CLINTON / YUGO SANCTIONS (L)

BYLINE=DAVID GOLLUST

DATELINE=WHITE HOUSE

CONTENT=

VOICED AT:

INTRO: President Clinton -- following the lead of the European Union -- is ending a number of U-S sanctions against Yugoslavia in response to the change of government there. V-O-A Correspondent David Gollust at the White House reports U-S sanctions aimed specifically against former Yugoslav President Slobodan Milosevic and his close aides will remain in place.

TEXT: The sanctions move by Mr. Clinton means the immediate end to an oil embargo and the ban on U-S commercial flights to and from Yugoslavia. It follows similar action by the European Union on Monday.

In a written statement, Mr. Clinton hailed what he called the victory of freedom in Serbia. He said it is one of the most hopeful developments in Europe since the fall of the Berlin wall and could liberate the entire region from the fear of ethnically-based conflict.

He said the U-S disagreement was with the former Milosevic government, not the people of the country, and that the United States has a strong interest in supporting Yugoslavia's new leaders as they work to build a truly democratic society.

In that regard, Mr. Clinton said travel restrictions against Mr. Milosevic and close associates and measures to help the new government prevent them from looting the national treasury -- will remain in place.

The announcement said the administration will review U-S restrictions that effectively bar Yugoslavia from receiving aid from the International Monetary Fund and World Bank.

Those, it is understood, will remain in place until the United States has discussed with the new leadership in Belgrade the legal fate of Mr. Milosevic, who faces war crimes charges for his role in fomenting a decade of conflict in the Balkans.

U-S officials including President Clinton have said they want to see Mr. Milosevic delivered to the U-N's war crimes tribunal at The Hague, although they have not said this is a condition for removing the multilateral lending restrictions.

The sanctions announcement came as Mr. Clinton's adviser on the Balkans, James O'Brien, was in Belgrade to congratulate and open a direct dialogue with Yugoslavia's new President, Vojislav Kostunica.

Mr. Kostunica has questioned the objectivity of the war crimes tribunal and has said he would not turn his predecessor over to the international court. (Signed)

NEB/DAG/JWH