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EU sanctions: Commission adopts opinion to clarify the application of financial sanctions

Met dank overgenomen van Europese Commissie (EC), gepubliceerd op vrijdag 19 juni 2020, 8:00.

As part of its role to ensure the effective and uniform implementation of EU restrictive measures (sanctions), the European Commission today issued an Opinion that clarifies how existing financial sanctions should be interpreted in particular as regards the freezing of assets. Asset freezing refers to the blocking of bank accounts and other assets of persons listed under EU sanctions. The Opinion should provide clarity to Member States' competent authorities as regards the implementation of restrictive measures imposed by the EU in this field.

The Opinion concerns the sanctions imposed by means of Council Regulation (EU) No 269/2014in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. It was requested by EU national competent authorities, which are responsible for implementing EU sanctions.

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, also responsible within the Commission for EU financial and economic sanctions, said: "This Opinion will contribute to ensuring that Member States and their operators act consistently and effectively when they implement EU sanctions. It will clarify the scope of the asset freeze imposed on sanctioned individuals or entities. We have no doubt that it will contribute to a clearer and stronger application of sanctions across the EU”.

Similarly to other sanctions regulations, Council Regulation (EU) No 269/2014 imposes the freezing of all assets belonging to, owned, held or controlled by the listed natural and legal persons, and a prohibition to make funds and economic resources available to them. In this regard, the Commission clarified that the assets of an entity controlled by a listed person must be frozen, even if the entity as such is not listed. However, the controlled entity may obtain the lifting of the freeze on some or all of its assets if it provides evidence that they are in fact not controlled by the listed person.

The text further clarified that funds and economic resources cannot be made available to entities controlled by listed persons, except in specific cases foreseen as derogations in the sanctions regime. It also specified that the provision of labour or services to entities controlled by listed persons can amount to making economic resources indirectly available to the listed persons, insofar as it enables the latter to ultimately obtain an economic benefit.

Background

EU sanctions are a foreign policy tool and seek to uphold universal values such as preserving peace, strengthening international security, consolidating and supporting democracy, international law and human rights. They are targeted on those whose actions endanger these values, while aiming to avoid negative consequences on the civilian population. The EU has about 40 different sanctions regimes currently in place.

Compliance by the EU with relevant international obligations and its policy of targeted measures underpin a system of exceptions. These can include the provision of humanitarian assistance and humanitarian activities, including medical assistance. Depending on the transactions they envisage and the restrictions existing in each case, humanitarian operators may need to request a prior authorisation in order to export certain goods to sanctioned countries. Such authorisations are delivered by the competent authorities in each Member State.

Since March 2014, the EU has progressively imposed restrictive measures against Russia. The measures were adopted in response to the illegal annexation of Crimea and the deliberate destabilisation of Ukraine.

The EU imposes different types of restrictive measures:

  • diplomatic measures
  • individual restrictive measures (asset freeze and travel restrictions)
  • restrictions on economic relations with Crimea and Sevastopol
  • economic sanctions
  • restrictions on economic cooperation

Council Regulation (EU) No 269/2014 of 17 March 2014 lays down restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. Article 2 of that Regulation provides that all funds and economic resources belonging to, owned, held or controlled by any natural persons or natural or legal persons, entities or bodies associated with them as listed in the Annex to that Regulation shall be frozen. It also forbids making available any funds or economic resources, directly or indirectly, to or for the benefit of natural persons or natural or legal persons, entities or bodies associated with them listed in the Annex to the Regulation.

As part of the Commission's role as Guardian of the Treaties, Executive Vice-President Valdis Dombrovskis is responsible for the design and enforcement of EU financial and economic sanctions across the Union. This includes the issuance of guidance and opinions to ensure uniform implementation.

For more information:

Commission Opinion


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