EU and US adopt sanctions measures against Syria
The Council of the European Union and the United States administration have taken steps to put economic and political pressure on a number of individuals and entities deemed to be responsible for human rights abuses and acts of violent repression against the civilian population in Syria. The Unites States has imposed restrictive measures against the Syrian intelligence service and two relatives of President Bashar al-Assad.
In brief, the effect of these measures, which are set out in Executive Order 13572, is to bar U.S. business dealings with, and to freeze any property or assets of the named individuals and entities in the U.S., or which are within the control of US persons or entities, including overseas branches. The US administration has indicated that this is likely to be followed by further measures if the situation in Syria does not improve quickly.
Regulation 442/2011 was adopted by the Council of the European Union on 9th May 2011, and came into immediate effect in all Member States of the EU. In essence, the Regulation imposes a ban on provision of internal repression equipment, and the freezing of funds and economic resources of certain individuals and entities.
The Regulation applies, inter alia, to banks, financial institutions and all commercial organisations operating within the European Union, or established under the laws of a Member State, to nationals of Member States, to other bodies and persons in the Union, and to all legal persons, entities and bodies in respect of any business done in whole or in part within the EU. It applies within the territory of the Union, and on board any aircraft or vessel under the jurisdiction of a Member State.
Article 2 of the Regulation prohibits the sale, supply, transfer or export, whether directly or indirectly, of equipment, (as listed in Annex I), which might be used for internal repression, whether or not originating in the EU, to any person, entity or body in Syria or for use in Syria. Exceptions apply in respect of protective clothing equipment temporarily exported to Syria by UN personnel or EU Member States, representatives of the media or humanitarian or development workers, and associated persons for personal use. Application may also be made via the relevant competent authorities of Member States for derogation from the prohibition in respect of equipment listed in Annex I if it is intended solely for humanitarian or protective use.
Article 3 prohibits the provision of financial and technical assistance related to goods and technologies listed in the Common Military List of the EU. It also prohibits technical and brokering services related to any other equipment which might be used for internal repression to persons in Syria or for ultimate use in Syria.
Article 4 of the Regulation freezes the funds and economic resources of designated individuals, entities and bodies, as listed in Annex II of the Regulation. Thirteen individuals are currently listed. All but one are described as being senior figures in the military, intelligence and political security sectors in Syria. The exception is a Mr Rami Makhlouf, described as a Syrian businessman who allegedly bankrolls repressive activities against the civilian population. Article 4 forbids the making available of funds and economic resources, directly or indirectly to, or for the benefit of those designated persons, entities and bodies. It further forbids the participation, knowingly and intentionally, in activities the object or effect of which is to circumvent the measures.
Article 6 sets out various derogations from the prohibitions. These include the release or making available of funds or economic resources for the purposes of satisfying the basic needs of designated persons and their dependent family members, and for payment of professional fees and expenses associated with legal expenses, etc.
Under Article 7 there is a derogation in respect of release of funds to satisfy claims secured by a lien or judgment established prior to the date the designated person was listed in Annex II.
Article 8 permits the addition of interest and other earnings to frozen accounts, provided such funds shall then become frozen.
Article 9 provides for the authorisation of the release of frozen funds, to permit payment by a designated person under a contract, agreement or obligation that arose prior to such person’s designation.
In all such cases, permission must be sought from the relevant competent authority of the Member State, and that authority is obliged to notify the other Member States and the European Commission of any decision to grant an authorisation.
Article 11 sets out an obligation upon all legal persons, entities and bodies that are subject to the Regulation to supply immediately any information in their possession, such as details of accounts, assets and funds which would facilitate compliance with the Regulation, to the relevant competent authority in their State.
Article 15 provides that each Member State shall lay down rules on penalties applicable to infringements of the provisions of the Regulation.
HM Treasury has published a Financial Sanctions Notice outlining its interpretation of Regulation 442/2011. Further information may be obtained from the HM Treasury website.