EU Sanctions Flashcards
What is the Blocking Statute?
The European Union Blocking Statute was originally adopted in 1996 to counteract US sanctions on Cuba, Iran and Libya, but following a memorandum of understanding entered into between the EU and the US, it has seldom been enforced by EU member states’ authorities. However, on 7 August 2018, the EU amended the annex to the statute in response to the US’ withdrawal from the Joint Comprehensive Plan of Action and the re-imposition of US sanctions against Iran. The effect was an expanded scope of the EU Blocking Statute to counteract the re-imposed US primary and secondary sanctions on Iran.
The EU Blocking Statute prohibits EU persons from complying, directly or indirectly, with certain US sanctions listed in its annex, leaving EU companies caught between two opposing regimes.
Since 2018, there has been limited case law interpreting the EU Blocking Statute in the context of civil disputes over commercial agreements, with courts in the UK and EU member states taking differing approaches.
What is the Common Foreign and Security Policy?
(CFSP)
This is the is the EU’s overall foreign policy.
What is the Common Military List?
The European Union (EU) Common Military List specifies the certain military goods, such as guns, ammunition, tear gas and warships that require an export license.
It lists items covered by Council Common Position 2008/944/CFSP defining common rules governing the control of exports of military technology and equipment. The list is published regularly in the Official Journal by the EU.
What is a Council Decision?
Restrictive measures (sanctions) are laid down in a CFSP Council decisions. A proposal is made by the High Representative of the Union for Foreign Affairs and Security Policy (HR). The Decision is adopted by the Council of the EU by unanimity.
If the Council Decision includes an asset freeze and/or other types of economic and/or financial sanctions, those measures need to be implemented in a Council regulation.
What is the purpose of the Council of the EU?
When it comes to sanctions, the Council of the EU is the decision-maker. A restrictive measure must be adopted by the Council by unanimity.
Council meetings are attended by representatives from each member state at a ministerial level, who can be ministers or state secretaries.
What is the Council Regulation?
Based on the CFSP Council decision, the High Representative and the Commission present a joint proposal for a Council regulation.
The regulation lays down the precise scope of the measures and details for the sanctions implementation.
As a legal act of general application, the regulation is binding on any person or entity (economic operators, public authorities, etc.) within the EU.
What is the complete definition of Economic Resources?
Assets of every kind, which are not funds, but may be used to obtain funds, goods or services.
What is the European External Action Service (EEAS)?
Serves as a foreign ministry and diplomatic service for the Union.
The High Representative is head of the service, which is composed of expert staff transferred from the Council, the Member States and the European Commission.
What are Financial Restrictions?
Target the financial means of pre-identified individuals or entities. This includes freezing of funds and economic resources.
Financial restrictions are intended to prevent access to financial means of any kind by designated person.
What is the Service for Foreign Policy Instruments (FPI)?
The European Commission’s Service for FPI puts EU foreign policy into action − fast and flexibly − in a policy-driven approach. It acts as first responder to foreign policy needs and opportunities.
FPI transposes into EU law sanctions decisions prepared by the EEAS and agreed by the Council of the European Union. Such decisions support specific EU CFSP objectives or UN Security Council Resolutions.
What does the Freezing of Funds entail?
Preventing any move, transfer, alteration, use of, access to or dealing with funds in any way that would result in any change in their volume, amount, location, ownership, possession, character, destination or other change that would enable the funds to be used. This includes portfolio management.
What are funds?
Financial assets and benefit of every kind
What is the High Representative (HR)?
The HR of the European Union for Foreign Affairs and Security Policy (HR/VP) is the chief co-ordinator and representative of the CFSP within the EU.
What is the Treaty on European Union (TEU)?
One of the primary Treaties of the European Union, alongside the Treaty on the Functioning of the European Union (TFEU). The TEU forms the basis of EU law, by setting out general principles of the EU’s purpose, the governance of its central institutions, as well as the rules on external, foreign and security policy.
Article 29 of the TEU the allows the Council of the EU to adopt sanctions against governments of non-EU countries, non-state entities and individuals (such as terrorists) to bring about a change in their policy or activity.
What is a Travel Ban?
These are restrictive measures that prohibit access to the EU. Also called “movement restrictions.”
What powers does the United Nations Security Council (UNSC) have?
Its powers include establishing peacekeeping operations, enacting international sanctions, and authorizing military action.
The UNSC is the only UN body with the authority to issue binding resolutions on member states.
What is Implementation?
Many restrictive measures, such as freezing funds, are implemented by the EU using Regulations. Regulations are legal instruments that implement these sanctions measures. They are binding and directly applicable throughout the EU.
Individuals and entities with link to the EU must comply with restrictive measures implemented by EU Regulation.
True or False: Arms embargoes or travel restrictions have regulations and are done at the EU level.
FALSE - Arms embargoes or travel restrictions merely have a Council Decision. There is no Regulation. In this case, implementation must be done by the Member States at national level in line with CFSP.
True or False: EU regulations take precedence over any conflicting domestic legislation at the member state level.
TRUE
What is a listing?
Designation on the EU Consolidated List. Listing is achieved by:
* A Decision of the Council, followed by
* Publication in the EU Official Journal, and
* Notification of the target through a letter
Is licensing the same across the EU?
The licensing, or authorization system, is dependent on the internal licensing systems in place in each EU member state. This means that each EU member state is responsible for regulating the practical aspects of EU sanctions, including enforcement, and exceptions, into their national law.
Therefore, in order to obtain further details on the licensing or authorization system in place in a particular EU jurisdiction, the regulator of the EU member state in question should be contacted.
True or False: The penalties for any breach of EU restrictive measures are dependent on the national legislation of EU member states.
TRUE
What is a Control?
The EU restrictive measures apply to entities that are controlled by sanctioned persons.
Factors indicating control include:
- Power to appoint or remove a majority of the members of the entity’s administrative, management or supervisory body;
- Having appointed solely as a result of the exercise of one’s voting rights a majority of the members of the administrative, management or supervisory bodies of the entity in the present and previous financial years;
- Controlling alone, pursuant to shareholder agreement, a majority of shareholders’ or members’ voting rights;
- Having a legal right to exercise a dominant influence over the entity;
- Having the right to use all or part of the assets of a legal person or entity;
- Managing the business of an entity on a unified basis, while publishing consolidated accounts;
- Sharing jointly and severally the financial liabilities of the entity or guaranteeing them.
What is Fifty Percent for the EU?
In the EU, entities in which a sanctioned person or entity has an ownership interest of 50 percent or more are also subject to restrictive measures, even if they are not designated separately. The same applies to entities that are controlled by sanctioned persons.
