EU Sanctions Updates 2011

EU REGULATION 442/2011 - 9 MAY 2011

EU Council 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 the 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.

Copies of the Regulation and an associated HMT Financial Sanctions Notice can be downloaded below.

EU IMPLEMENTING REGULATION 504/2011 24 MAY 2011

The EU has extended the application of the asset freeze imposed by Regulation 442/2011 to an additional ten individuals by means of Implementing Regulation 504/2011 which came into effect on 24 May 2011.

Annex II of Regulation 442/2011 lists the persons, entities and bodies that have been designated by the European Council as responsible for the violent repression of the civilian population in Syria. Annex II of Regulation 442/2011 is replaced by the text set out at Annex II of Regulation 504/2011.

The additional persons listed are all said to be connected with the governing Presidential regime through holding positions in the government or security services, or through the provision of funding for the regime.

The text of the Regulation can be found below.

EU IMPLEMENTING REGULATION 611/2011 23 JUNE 2011

The EU has extended the application of the asset freeze measures set out in Regulation 442/2011 to a further seven individuals and four entities. They are alleged to have provided funding, equipment and support to the Syrian regime to suppress protests in Syria, and in the case of one individual, a first cousin of President Bashar Al-Assad, to have actively participated in violence against demonstrators. This brings to thirty-four the total number of persons and entities subject to the asset freeze measures.

Copies of the Regulation and an associated HMT Financial Sanctions Notice can be found below.

EU IMPLEMENTING REGULATION 755/2011 1 AUGUST 2011

A further five individuals have been added to the list of individuals and entities subject to EU asset freeze and travel ban measures. The newly listed persons, which include Syria's defence minister and the head of the country's internal security services, are said to be involved in repression and violence against the civilian population.

Copies of the Regulation and an associated HMT Financial Sanctions Notice can be found below.

EU IMPLEMENTING REGULATION 843/2011 23 AUGUST 2011

A further fifteen individuals and five entities have been added to the list of persons and entities subject to the asset freeze measures adopted by EU countries pursuant to EU Regulation 442/2011 of 9 May 2011. All are cited as being involved in repression and violence against civilians involved in pro-democracy demonstrations in Syria, aiding repression and violence, or providing economic support to the Syrian regime.

Copies of the Regulation and an associated HMT Financial Sanctions Notice can be found below.

EU REGULATION 878/2011 2 SEPTEMBER 2011

The EU Council has adopted measures, effective from 3 September 2011, which have widened the scope of the sanctions regime against Syria which was first adopted on 9 May 2011 under Regulation 442/2011. Regulation 442/2011 has been amended by Regulation 878/2011 to include the following provisions:

Article 3a - the following activities are now prohibited:

(a) importation of crude oil or petroleum products into the Union if they:

(i) originate in Syria; or

(ii) have been exported from Syria;

(b) purchase of crude oil or petroleum products which are located in or which originated in Syria;

(c) transportation of crude oil or petroleum products if they originate in Syria, or are being exported from Syria to any other country;

(d) provision, directly or indirectly, of financing or financial assistance, including financial derivatives, as well as insurance and re-insurance, related to the prohibitions set out in points (a), (b) and (c); and

(e) participation, knowingly and intentionally, in activities whose object or effect is, directly or indirectly, to circumvent the prohibitions in point (a), (b), (c) or (d).

Article 3b - sets out exemptions to the activities prohibited under Article 3a. There is dispensation, (subject to 7 days advance notice to the competent authority of a relevant EU State), for the execution, on or before 15 November 2011, of contractual obligations involving activities prohibited under Article 3a, where such obligations had been entered into before 2 September 2011. It is also permitted, up to 15 November 2011, to purchase crude oil or petroleum products which had been exported from Syria prior to 2 September 2011.

Article 5(1) - Regulation 442/2011 is amended to allow the sanctions measures to be applied against "persons and entities benefiting from or supporting the regime, or persons and entities associated with them".

Article 10a - a new provision to protect EU persons and entities from claims made by the Government of Syria in relation to contracts or transactions the performance of which is affected, directly or indirectly, by the measures imposed under Regulation 442/2011 as amended.

In addition to changes to the sanctions measures themselves, Regulation 878/2011 adds an additional 4 individuals and 3 entities to the list of designated persons and entities.

Copies of Regulation 878/2011, and an associated HMT Financial Sanctions Notice can be found below.

EU REGULATION 950/2011 - 23 SEPTEMBER 2011

The EU has adopted changes to the sanctions regime in place against Syria.

The first is the introduction of additional non-asset freezing measures to complement those set out in Regulation 442/2011. From 23 September, EU persons are prohibited from selling, supplying, transferring or exporting, directly or indirectly, new Syrian denominated banknotes and coinage printed or minted in any EU state, to the Central Bank of Syria (new Article 2a inserted in Regulation 442/2011).

In addition, EU persons are banned from granting any loans or credit to, acquiring or extending any participation in, or creating any joint venture operation with, any Syrian person, entity or body that is engaged in the exploration, production or refining of crude oil (new Article 3c inserted in Regulation 442/2011). There is dispensation for the execution of contractual obligations involving the newly prohibited activities entered into before 23 September 2011.

"Syrian person, entity or body" are defined as:

(i) the State of Syria or any public authority thereof;

(ii) any natural person in, or resident in, Syria;

(iii) any legal person, entity or body having its registered office in Syria;

(iv) any legal person, entity or body, inside or outside Syria, owned or controlled directly or indirectly by one or more of the above mentioned persons or bodies.

Regulation 950/2011 also adds two individuals and six entities to the list of those subject to the asset freeze measures set out in Regulation 442/2011.

Copies of Regulation 950/2011 and an associated HMT Financial Sanctions Notice can be downloaded below.

EU REGULATION 1011/2011 - 14 OCTOBER 2011

Pursuant to Regulation 1011/2011, which came into effect on 14 October 2011, the Commercial Bank of Syria has been designated as an entity subject to the EU's asset freezing measures. This designation extends to all of the Bank's offices worldwide. As a result, parties subject to EU jurisdiction are prohibited from making funds or economic resources directly or indirectly available to it or for its benefit.

By way of derogation from this prohibition, Article 9a of the Regulation expressly incorporates a temporary exemption, whereby payment can be made out of the Bank's funds and economic resources which were received and frozen after 13 October 2011, for a period of two months (until 13 December 2011), provided that such payment is due under a trade contract, and the competent authority of the relevant Member State has determined that such payment will not directly or indirectly be received by any other designated person or entity. This exemption permits a two month period to enable payments to be made under existing contracts not involving designated parties and to allow third parties to find alternative routes for financing trades which do not involve a listed bank.

In addition, Regulation 1011/2011 introduces a minor but important amendment to the ban on the purchase, transport and import into the EU of crude oil and petroleum products which was introduced under Regulation 878/2011 (amending Regulation 442/2011). The amendment makes clear that the ban does not extend to the purchase, in Syria, of kerosene jet fuel provided that it is "intended and used solely for the purpose of the continuation of the flight operation of the aircraft into which it is loaded". Otherwise the ban on the purchase, transport and import into the EU of all other petroleum products as defined in Annex IV of EU Regulation 878/2011 remains in place.

A copy of Regulation 1011/2011 and the associated HMT Financial Sanctions Notice, can be found below.

EU REGULATIONS 1150/2011 & 1151/2011 - 14 NOVEMBER 2011

Pursuant to EU Regulation 1150/2011, and with effect from 14 November 2011 the European Investment Bank (“EIB”) is prohibited from making any payments or disbursements in connection with existing loan agreements between EIB and the State of Syria or any public authority thereof.

Pursuant to EU Regulation 1151/2011 the EU has added 18 individuals to the list of persons and entities subject to asset freeze measures. All but one are involved in the military. The exception is a lawyer by the name of Bassam Sabbagh of the Sabbagh and Associates law firm in Damascus. 74 individuals and 19 entities are now covered by the asset freeze.

Copies of the Regulations and an associated HMT Financial Sanctions Notifcation can be downloaded from the links below.

EU IMPLEMENTING REGULATION 1244/2011 – 1 DECEMBER 2011

With effect from 1 December 2011, an additional twelve individuals and eleven entities are added to the designees listed under Annex II of EU Regulation 442/2011 for the purposes of asset freeze. These include the following oil and petroleum corporations: