International Sanctions 2019

2020-01-17 Newsletters

Tabla de contenidos

1
2 EUROPEAN UNION
3 UNITED STATES

EUROPEAN UNION

The principal sanctions are as follows:

1. RUSSIA

Background

On 6 March 2014, the member States of the European Union strongly condemned the unprovoked violation of Ukrainian sovereignty and territorial integrity by Russia and called on the Russian Federation to immediately withdraw its armed forces from the country. It was stated that any additional Russian action to destabilize the situation in Ukraine would have additional and far-reaching consequences for relations in a wide range of economic areas.

Given the seriousness of the situation, on 31 July 2014 the Council of the European Union adopted restrictive measures in response to Russia’s actions destabilising the situation in Ukraine. They consisted of trade measures (a ban on the export of dual-use items, goods and technology listed in the Common Military List, and goods and technology for the exploration and production of oil) and financial measures (limiting access to the European Union’s primary and secondary capital markets for five major Russian financial institutions).

On 30 August 2014 the European Council condemned the increasing influx of fighters and weapons from the territory of Russia into Eastern Ukraine and the aggression of the Russian armed forces on Ukrainian territory.

On 8 September 2014 the Council of the European Union adopted further restrictive measures in response to Russia’s actions destabilising the situation in Ukraine.

On 19 March 2015 the European Council agreed that the duration of the restrictive measures should be clearly linked to the full implementation of the Minsk agreements signed on 5 September 2014 to end the conflict in eastern Ukraine. The agreement was signed by Ukraine, the Russian Federation, the People’s Republic of Donetsk and the People’s Republic of Lugansk.

On 22 June 2015 the Council of the European Union renewed these restrictive measures for a further six (6) months to allow the Council to assess the implementation of the Minsk agreements.

On 21 December 2015, the Council of the European Union found that the Minsk agreements would not be fully implemented by 31 December 2015 and extended the restrictive measures for a further six (6) months to allow the Council to further evaluate the implementation of the Minsk agreements.

In March 2016 the Foreign Affairs Council of the European Union agreed on five guiding principles for EU-Russia relations:

The implementation of the Minsk Agreement as a key condition for any substantial change in the European Union’s position towards Russia.

Strengthening relations with the European Union’s eastern partners and other neighbours, in particular in Central Asia.

Strengthening the European Union’s resilience (e.g. energy security, hybrid threats, strategic communication).

Need for targeted engagement with Russia on issues of concern to the European Union.

Need for personal contacts and support to Russian civil society.

Extension of economic sanctions against Russia

On 27 June 2019 the Council of the European Union extended the economic sanctions targeted at specific sectors of the Russian economy until 31 January 2020. These sanctions are laid down in Council Regulation (EU) 833/2014 of 31 July 2014 concerning restrictive measures caused by actions of Russia destabilising the situation in Ukraine (“Regulation 833/2014“). This Regulation imposes the following restrictive measures:

Trade Sanctions:

According to Article 2.1 of Regulation 833/2014, a ban on exports of dual-use items, either for military use or for military end-users in Russia is imposed as follows:

“It is prohibited to sell, supply, transfer or export, directly or indirectly, dual-use items and technology, whether or not originating in the Union, to any natural or legal person, entity or body in Russia or for use in Russia, if the items are or may be intended, in their entirety or in part, for military use or for military end-users.

In cases where the end-user is the Russian military, any dual-use item or technology it acquires shall be considered as military“.

In addition, Article 2.1 bis adds the following:

“It is prohibited to sell, supply, transfer or export, directly or indirectly, the dual-use items and technology listed in Annex I to Regulation (EC) No 428/2009, whether or not originating in the Union, to natural or legal persons, entities or bodies in Russia listed in Annex IV to this Regulation”.

Finally, paragraph 2 of the above-mentioned Article 2.1 bis prohibits “the provision of technical assistance, brokering services or other services related to products and technology” referred to in paragraph 1 (Article 2.2 bis (b)), as well as “the provision of financing or financial assistance, (…) including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of such products and technology” (Article 2.2 bis (b)).

Article 3 of Regulation 833/2014 also restricts Russia’s access to certain products and technology for the purpose of exploration and production of oil.
Finally, Article 4 of the above-mentioned Regulation 833/2014 provides for further prohibitions in relation to products and technology listed in the Common Military List.

Financial sanctions:

Article 5 of Regulation 833/2014 imposes certain financial sanctions limiting access to the primary and secondary capital markets of the European Union for five (5) major Russian financial institutions, with majority State ownership, and their subsidiaries, also with majority State ownership, established outside the EU, as well as for three (3) major Russian energy companies and three (3) defence companies.

2. UKRAINE

Background

On 6 March 2014 the Member States of the European Union strongly condemned the unprovoked violation of Ukrainian sovereignty and territorial integrity by Russia. At its meeting on 20 and 21 March 2014, the European Council strongly condemned the illegal annexation of Crimea by the Russian Federation and stressed that it would not recognise it. The European Council considered that certain economic, trade and financial restrictions in relation to Crimea should be proposed for rapid implementation.

On 27 March 2014 the United Nations General Assembly adopted Resolution 68/262 on the territorial integrity of Ukraine, affirming its commitment to the sovereignty, political independence, unity and territorial integrity of Ukraine within its internationally recognised borders, stressing the invalidity of the referendum held in Crimea on 16 March and urging all States not to recognise any alteration of the status of Crimea.

On 23 June 2014 the Council of the European Union considered that the import of goods originating in Crimea or Sevastopol into the European Union should be prohibited with the exception of goods originating in Crimea or Sevastopol that had been granted a certificate of origin by the Ukrainian government. On 30 July 2014 the Council of the European Union adopted additional measures to restrict trade and investment in the Crimea.

On 18 December 2014 the Council further restricted investment in Crimea. Thus, trade in goods and technology for use in certain sectors in Crimea was restricted. Services in the sectors of transport, telecommunications, energy or exploration, production of oil, gas and mineral resources, as well as services related to tourist activities in the Crimea, including the maritime sector, were also prohibited.

On 19 March 2015 the European Council concluded that it does not recognise and continues to condemn Russia’s illegal annexation of Crimea and that it will remain committed to the full implementation of its non-recognition policy.

Restrictive measures were renewed on 19 June 2015, 17 June 2016 and 19 June 2017.

This regime of restrictive measures is part of a broader Community policy of non-recognition of the illegal annexation of Crimea and Sevastopol.

Extension of sanctions on Ukraine (limited to the territory of Crimea and Sevastopol)

On 20 June 2019 the Council of the European Union extended restrictive measures in response to Russia’s illegal annexation of Crimea and Sevastopol until 23 June 2020. These sanctions are regulated in Council Regulation (EU) 692/2014 of 23 June 2014 on restrictions on imports into the Union of goods originating in the Crimea or Sevastopol in response to the illegal annexation of Crimea and Sevastopol (Regulation 692/2014).

Under this Regulation, the following restrictive measures are imposed:

Trade sanctions:

Article 2 prohibits “the import into the European Union of goods originating in Crimea or Sebastopol’ and ‘the provision, directly or indirectly, of financing or financial assistance, insurance and reinsurance related to the import of the goods” (Article 2 (b)).

Article 2 (d) also does not permit “the provision of tourist services directly connected with tourist activities in the Crimea and Sevastopol (…) and, in particular, it is prohibited for any ship offering cruise services to enter or call at any port in the Crimean peninsula listed in Annex III” to Regulation No 692/2014.

Finally, Article 2b prohibits the export of certain goods and technologies to companies in Crimea or for use in Crimea in the transport, telecommunications and energy sectors and in connection with the prospection, exploration and production of oil, gas and mineral resources. Nor may technical assistance, brokerage, construction or engineering services related to infrastructure be provided in these sectors (Article 2c).

Financial sanctions:

Article 2a prohibits investment in Crimea and Sevastopol region in particular:

“Acquiring any new property or extending any existing interest in real estate situated in Crimea or Sevastopol.

Acquiring any new ownership of real estate or extending any participation in ownership or control of an entity situated in Crimea or Sevastopol, including the total acquisition of such an entity and the acquisition of shares and securities of a participating nature in such an entity.

III. To grant or be part of any arrangement to grant any loan or credit or otherwise provide financing, including equity, to an entity in the Crimea or Sevastopol or with the stated intention of financing such an entity.

To set up any joint venture in Crimea or Sebastopol or with an entity in the Crimea or Sebastopol.”

Extension of individual sanctions against certain natural and legal persons on account of the situation in Ukraine

To date, 170 individuals and 44 entities have been subject to property freezing and travel ban measures for acts that undermine the territorial integrity, sovereignty and independence of Ukraine, adopted under the following legislation:

Council Regulation (EU) 208/2014 of 5 March 2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine.

Council Regulation (EU) 269/2014 of 17 March 2014 concerning restrictive measures against actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269/2014”).

Council Decision 2014/145/CFSP of 17 March 2014 concerning restrictive measures against actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

These measures have been last extended in September 2019 until 15 March 2020. Specifically, the following extensions have been agreed during the year 2019:

(a) On 4 March 2019 the Council of the European Union has issued the Implementing Regulation (EU) 2019/352 of 4 March 2019 implementing Regulation (EU) 208/2014 on restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, published in the Official Journal of the European Union on 5 March 2019, which extends until 6 March 2020 the freezing of assets against twelve (12) persons held liable for misappropriation of Ukrainian public funds or abuse of power causing loss to Ukrainian public funds. Only one (1) person has been exempted from the extension of the restrictive measures. The decision is based on the annual review of the measures.

(b) On 15 March 2019 the Council of the European Union issued Implementing Regulations 2019/408 and 2019/409, implementing Regulation (EU) 269/2014 on restrictive measures against actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

The above-mentioned Implementing Regulations add the names of eight (8) officials of Russian nationality to the list of persons and entities in Annex I of Regulation 269/2014 on which travel restrictions and the freezing of their assets are imposed.

The validity of the restrictive measures provided for by Regulation 269/2014 is also extended until 15 September 2019.

(c) On 11 September 2019, the Council of the European Union issued Implementing Regulation (EU) 2019/1403 of 12 September 2019 implementing Regulation (EU) 269/2014 concerning restrictive measures against actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, published in the Official Journal of the European Union on 12 September 2019. The said Implementing Regulation extends the restrictive measures in respect of actions adversely affecting or threatening the territorial integrity, sovereignty and independence of Ukraine for another six (6) months until 15 March 2020. Furthermore, the information regarding 21 persons and 19 entities listed in Annex I to Regulation 269/2014 and on whom travel restrictions and the freezing of their assets are imposed, is amended.

3. VENEZUELA

Background

On 13 November 2017 the Council of the European Union adopted restrictive measures in view of the continuing deterioration of democracy, the rule of law and human rights in Venezuela. The current regulatory framework therefore imposes certain restrictive measures, such as travel restrictions and freezing of assets, which may be imposed on those responsible for serious violations or abuses of human rights or for the repression of civil society and democratic opposition, as well as those whose actions, policies or activities otherwise undermine democracy or the rule of law in Venezuela.

These restrictive measures are intended to encourage a credible and meaningful process that can lead to a peaceful negotiated solution. They may be reversed depending on developments in the country, including the holding of credible and meaningful negotiations, respect for democratic institutions, the adoption of a full electoral timetable and the release of all political prisoners.

Current legal framework and developments 2019

The European Union’s sanctions against Venezuela are configured through certain restrictive measures imposed by the following rules:

Regulation (EU) 2017/2063 concerning restrictive measures in view of the situation in Venezuela.

Decision (CFSP) 2017/2074 concerning restrictive measures in view of the situation in Venezuela

The measures included in these regulations include the following:

Embargo on arms and equipment for internal repression
Travel ban and freezing of assets for 25 individuals, included in Annex I of Regulation 2017/2063, who hold official positions and are responsible for violations of human rights or undermining democracy and the rule of law in Venezuela.

On 11 November 2019, the Council of the European Union issued Council Regulation (EU) 2019/1889 of 11 November 2019 amending Regulation (EU) 2017/2063 on restrictive measures in view of the situation in Venezuela, and Council Decision (CFSP) 2019/1893 of 11 November 2019 amending Decision (CFSP) 2017/2074 concerning restrictive measures in view of the situation in Venezuela, published in the Official Journal of the European Union on 12 November 2019.

By means of this regulation, the restrictive measures imposed by the above-mentioned Regulation 2017/2063 and Decision 2017/2074 are extended for one year, until 14 November 2020.

Furthermore, it amends the information concerning 8 persons listed in Annex I to Regulation 2017/2074 and on whom travel restrictions are imposed as well as the freezing of their assets.

4. TURKEY

Background

On 14 October 2019 the EU Member States reaffirmed their full solidarity with the Republic of Cyprus and agreed that a new framework of restrictive measures should be established against natural and legal persons responsible for or involved in unauthorised oil drilling activities in the Eastern Mediterranean. In line with this, the Council established a new framework of restrictive measures on 11 November 2019.

This framework allows the EU to impose specific restrictive measures, including an asset freeze and a travel ban against certain natural persons or entities responsible for, involved in, or providing assistance to drilling activities not authorised by the Republic of Cyprus, in its territorial sea or in its exclusive economic zone or on its continental shelf.

This includes, in cases where the exclusive economic zone or the continental shelf has not been delimited in accordance with international law with a State that has an opposite coast, activities that may endanger or impede the conclusion of a delimitation agreement.

Current legal framework and developments 2019

The Council of the European Union has adopted Council Regulation (EU) 2019/1890 of 11 November 2019 concerning restrictive measures in respect of unauthorised drilling activities by Turkey in the Eastern Mediterranean (Regulation 2019/1980).

Regulation 2019/1980 allows for restrictive measures (freezing of funds and prohibition of entry into and transit through the territory of the European Union) to be imposed on certain natural and legal persons listed in its Annex I, as provided for in Article 2(1):

“All funds and economic resources belonging to, owned, held or controlled by any natural or legal person, entity or body listed in Annex I shall be frozen.

In addition, Regulation 2019/1980, in Article 1(d) and (g) defines the terms ‘economic resources’ and ‘funds’ respectively:

“(d) “economic resources” means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services)

(e) “funds” means financial assets and benefits of every kind, including but not limited to those listed below:

i. cash, cheques, claims on money, drafts, money orders and other payment instruments

ii. deposits in financial institutions or other entities, account balances, debts and debt obligations,

iii. publicly and privately traded securities and debt instruments, such as stocks and shares, certificates representing securities, bonds and notes, promissory notes, warrants, unsecured obligations and derivative contracts,

iv. interest, dividends or other income earned or generated by assets

v. loans, rights of set-off, guarantees, payment guarantees or other financial commitments,

vi. letters of credit, bills of lading and sales slips, and

vii. documents attesting to an interest in funds or financial resources.”

The persons who may be included in Annex I are those described in Article 2.3 of Regulation 2019/1980:

Annex I shall include those natural and legal persons, entities and bodies that the Council, in accordance with Articles 1(1) and 2(1) of Decision (CFSP) 2019/1894, deems appropriate:

1. Persons responsible for carrying out, including through planning, preparation, participation, direction or assistance, drilling activities related to the exploration and production of hydrocarbons, or the extraction of hydrocarbons resulting therefrom, or involved in such activities, which have not been authorised by the Republic of Cyprus, within its territorial waters or its exclusive economic zone or on its continental shelf; shall include, in cases where the exclusive economic zone or the continental shelf has not been delimited in accordance with international law in respect of a State whose coast is opposite, those activities which may endanger or obstruct the possibilities of reaching a delimitation agreement;

2. involved in the financial, technical or material support of drilling activities relating to the exploration and production of hydrocarbons, or the extraction of hydrocarbons resulting from such activities, referred to in point (a);

3. associated with the natural or legal persons, entities or bodies referred to in points (a) and (b)”.

It should be noted that no person has yet been included in the above-mentioned Annex I.

5. NICARAGUA

Background

At the European Council of 21 January 2019, EU Member States condemned the silencing of political opponents, independent media and civil society, as well as the use of anti-terrorism laws to suppress dissenting opinions in the Republic of Nicaragua.

In view of the continuing violations of human rights and civil liberties in the Republic of Nicaragua, as well as to contribute to a peaceful and negotiated solution to the current crisis, the Council established a new framework of restrictive measures on 14 October 2019.

This framework allows the European Union to impose targeted restrictive measures, including a travel ban and a freeze of assets, against persons, entities or bodies responsible for serious violations of human rights and undermining democracy and the rule of law in the Republic of Nicaragua, as well as against persons associated with them.

Exceptions to the restrictive measures, including the delivery of humanitarian aid, are possible.

Current legal framework and developments 2019

On 14 October last, Council Regulation (EU) 2019/1716 of 14 October 2019 concerning restrictive measures in view of the situation in Nicaragua and Council Decision (CFSP) 2019/1720 of 14 October 2019 concerning restrictive measures in view of the situation in Nicaragua were adopted. This new legal framework imposes restrictive measures on the natural and legal persons listed in Annex I thereto, who are deemed to be responsible for violations of human rights and repression of civil society in Nicaragua, as provided for in Article 2(3) of Regulation 2019/1716:

“Annex I shall include natural or legal persons, entities and bodies to whom the Council has indicated, in accordance with Articles 1(1) and 2(1) of Decision (CFSP) 2019/1720, that

-are responsible for serious violations of human rights or for the repression of civil society and democratic opposition in Nicaragua

–undermine democracy and the rule of law in Nicaragua;

–are associated with the natural or legal persons, entities or bodies referred to in points (a) and (b)”.

The same Article 2(1) and (2) provides for the freezing of funds of the persons listed in Annex I:

“All funds and economic resources belonging to, owned, held or controlled by any natural or legal person, entity or body listed in Annex I shall be frozen.

No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of the natural or legal persons, entities or bodies listed in Annex I’.

As in the case of the recent sanctions against Turkey imposed by the aforementioned Regulation 2019/1980, no persons or entities have yet been included in Annex I to Regulation 2019/1716.

6. DEMOCRATIC REPUBLIC OF THE CONGO

Background

On 7 April 1993 the European Union decided to impose an arms embargo on Zaire (now the Democratic Republic of Congo, ‘DRC’).

On 28 July 2003 the United Nations Security Council adopted Resolution 1493 (2003) imposing an arms embargo against the DRC.

On 18 April 2005, the UN Security Council adopted Resolution 1596 (2005), which also imposes specific restrictive measures. On 21 December 2005, the United Nations Security Council adopted Resolution 1649 (2005) extending restrictive measures to political and military leaders of foreign armed groups operating in the DRC who impede the disarmament and voluntary repatriation or resettlement of combatants belonging to such groups, as well as to the political and military leaders of Congolese militias receiving support from outside the DRC and, in particular, those operating in Ituri, who are preventing their combatants from participating in the DDR processes.

On 31 July 2006 the United Nations Security Council adopted Resolution 1698 (2006) extending restrictive measures to political and military leaders recruiting or using children in armed conflict in violation of applicable international law, and to individuals committing serious violations of international law involving the targeting of children in situations of armed conflict, including killing and maiming, sexual violence, abduction and forced displacement.

On 17 October 2016 the European Union expressed its deep concern at the political situation in the DRC. It strongly condemned the acts of extreme violence that took place on 19 and 20 September 2016 in Kinshasa and noted that these acts further exacerbated the stalemate in the country by not convening the presidential elections before the constitutional deadline of 20 December 2016. The EU stressed that, in order to create a climate conducive to dialogue and the holding of elections, the Government of the DRC must make a clear commitment to ensuring respect for human rights and the rule of law and to ending all use of the judicial system as a political instrument. It also called on all the parties concerned to reject the use of violence. The European Union has taken specific measures against those responsible for serious human rights violations, those who promote violence and those who seek to obstruct a consensual and peaceful solution to the crisis that respects the aspirations of the people of the DRC to elect their representatives.

There are exceptions to the restrictive measures, such as the delivery of humanitarian aid.

Current legal framework and developments 2019

On 9 December 2019, the Council of the European Union has adopted Implementing Regulation (EU) 2019/2101 of 9 December 2019 implementing Article 9 of Regulation (EC) 1183/2005 imposing certain specific restrictive measures directed against persons acting in violation of the arms embargo with regard to the Democratic Republic of the Congo, published in the Official Journal of the European Union on 10 December 2019. The above-mentioned Implementing Regulation maintains the individual restrictive measures against certain persons and entities in the DRC.

Annex I to Regulation 1183/2005 is amended and two (2) persons previously sanctioned are removed from it.

It is recalled that Regulation 1183/2005 freezes the funds and economic resources of the persons listed in its Annex I (Article 2(1) of Regulation 1183/2005) and prohibits the provision of “technical assistance or brokering services related to goods and technology listed in the Common Military List of the European Union, or related to the provision, manufacture, maintenance and use of goods included in that list, to any non-governmental entity or person operating in the territory of the DRC” (Article 1a(a)).

7. EGYPT:

Background

On 21 February 2011 the Council of the European Union declared its readiness to support a peaceful and orderly transition to civilian and democratic government in Egypt based on the rule of law, with full respect for human rights and fundamental freedoms, and to support efforts to create an economy that enhances social cohesion and promotes growth. In addition, restrictive measures were imposed against persons identified as responsible for misappropriating Egyptian state funds and who are therefore depriving the Egyptian people of the benefits of sustainable development of their economy and society, as well as undermining the development of democracy in the country. The aim of the measures is to recover the assets diverted from Egypt.

Current legal framework and developments 2019

On 21 March 2019, the Council of the European Union issued Council Implementing Regulation (EU) 2019/459 of 21 March 2019 implementing Regulation (EU) 270/2011 concerning restrictive measures against certain persons, entities and bodies in view of the situation in Egypt, and Council Decision (CFSP) 2019/468 of 21 March 2019 amending Decision 2011/172/CFSP concerning restrictive measures against certain persons, entities and bodies in view of the situation in Egypt, published in the Official Journal of the European Union on 22 March 2019. That Decision extends the restrictive measures provided for by Regulation 270/2011 until 22 March 2020 and freezes all funds and economic resources of the persons listed in Annex I thereto. These include former Egyptian President Mohamed Hosni Elsayed Mubarak and several of his family members.

A further extension of these sanctions is also foreseen.