EU UPDATES ITS SANCTIONS BEST PRACTICES DOCUMENT

The EU has produced an updated version of the document EU Best Practices for the effective implementation of restrictive measures, which contains non exhaustive and non binding recommendations by the Foreign Relations Counsellors Working Party for Member States implementing EU restrictive measures.  The Best Practices document covers a number of issues relating to listing & de-listing on EU targeted sanctions measures, & national implementation of asset freezing measures. This amends the previous version, published in 2008. The most significant amendments are:

  1. The addition of a section on de-listing from United Nations sanctions lists.
  2. Clarification of the tests for “ownership” or “control” of an entity and “making funds available indirectly”, mirroring the Guidelines on Implementation of Restrictive Measures published by the EU in 2013.
  3. An explanation of the non-liability & no claims clauses in a number of EU sanctions Regulations, which provide that no liability is incurred for damages caused by sanctioning a person in accordance with EU measures, or for breaching sanctions where it was not known or there was not reasonable cause to suspect that the action would infringe restrictive measures.
  4. A statement that, unless otherwise specified, sanctions measures annulled by the European court remain in force for the 2 month and 10 day time limit in which an appeal may be brought and for as long as an appeal is pending.
  5. Clarification of some of the grounds for exemptions to asset freezes (licences), and of the process for transfer of funds between EU and non-EU financial institutions where sanctions are involved.

The Best Practices and Guidelines documents are on the ‘guidelines’ section of this blog.

UN IMPOSES ARMS EMBARGO ON HOUTHI REBELS IN YEMEN AND BLACKLISTS TWO REBEL SUPPORTERS

The United Nations Security Council has voted 14-0, with Russia abstaining, to impose an arms embargo on Houthi rebels in Yemen.  It has also approved a global asset freeze and travel ban on Abdulmalik al-Houthi, a Houthi leader, and Ahmed Saleh, the son of previous Yemeni President Ali Abdullah Saleh and a former commander of Yemen’s Republican Guard, who has provided military support to the rebels.  They are accused of threatening the peace, security, and stability of Yemen and are listed alongside the former President and two other senior Houthi leaders, Abd al-Huthi and Abdullah al-Hakim, who were blacklisted by the Security Council in November (see previous blog).

The Houthi rebels are involved in a military campaign against the supporters of Yemen’s president, Abed Rabbo Mansouri Hadi.  The resolution demands that all Yemeni parties, in particular the Houthis, cease violence and “resume and accelerate” UN-brokered negotiations to continue the country’s political transition from the Saleh administration.

The measures are set out in Security Council Resolution 2216 (2015) and the US Treasury’s Office of Foreign Assets Control has sanctioned the two individuals concerned pursuant to Executive Order 13611, in accordance with the Resolution.

EU IMPLEMENTS UN AL-QAIDA SANCTIONS LISTINGS

The EU has updated its counterterrorism sanctions against Al-Qaida to reflect changes made by the United Nations Security Council.  They add Maulana Fazlullah, commander of Tehrik-e Taliban Pakistan (which claimed responsibility for the school shootings in Pakistan on 16 December 2014), who is a Specially Designated Global Terrorist under US sanctions.

Abd Al-Rahman Muhammad Jaffar Ali has been removed, having served a sentence for financing terrorism and membership of a terrorist organisation.  Listed people are subject to an EU-wide asset freeze.

These changes are set out in Commission Implementing Regulation (EU) 2015/576 amending Council Regulation (EC) 881/2002.  The corresponding HM Treasury notice is here.

A list of EU counterterrorism sanctions is in the “sanctions in force” section of this blog.

EU COURT INTERPRETS “FINANCIAL SUPPORT FOR THE GOVERNMENT OF IRAN” IN CENTRAL BANK OF IRAN’s 2nd CASE

The Council of the EU expanded the criteria for including people and companies in its targeted sanctions against Iranian nuclear proliferation in August 2012, so that it could include not only those said to be involved in some way in nuclear proliferation, but also those who provide “support” to the Iranian Government. The General Court (the EU’s first instance court) has just interpreted that criterion, in its recent judgment in the Central Bank of Iran’s 2nd application for annulment; T-563/12 Central Bank v Council (25 March 2012). It covers “any activity of the person or entity concerned which, regardless of any direct or indirect link established with nuclear proliferation, is capable, by its quantitative or qualitative significance, of encouraging that proliferation, by providing the Government of Iran with support in the form of resources or facilities of a material, financial or logistical nature which allow it to pursue nuclear proliferation”. On that basis, the Court upheld the Bank’s designation, because, as a central bank, it provides financial support to the Government, and the Court said the Council did not have to provide any evidence or further particulars.

As we previously reported, the Central Bank of Iran won its application to annul its original January 2012 designation, which had been on the basis that it was “involved in activities to circumvent sanctions”. The Council added “financial support to the Government” as an additional reason in October 2012, and it is that 2nd reason that the Court has now upheld. The Court rejected the Council’s argument that the 2nd application was inadmissible on the ground of lis pendens, because it was brought before the Bank’s 1st application was amended to challenge this new reason.

Maya Lester acts for the Central Bank of Iran.

HOUSE OF COMMONS EUROPEAN SCRUTINY COMMITTEE 37TH REPORT

The House of Commons European Scrutiny Committee has published its 37th Report, in which it considers in detail EU sanctions relating to Bosnia & Herzegovina, Ukraine, Russia, Syria and Iran (see previous blogs here and here).

The committee is very critical of the processes followed in relation to the re-listings of a number of people and entities whose listings have previously been annulled by the EU General Court for lack of evidence (in particular the National Iranian Tanker Company and Mr Golparvar on the EU’s Iran sanctions, and 7 people and 6 companies on its Syria sanctions).

The report particularly criticises the UK’s override of parliamentary scrutiny, and the lack of documentary evidence provided to the committee in the scrutiny process in relation to a number of EU sanctions regimes. The Committee criticises “the continuing failure of the European External Action Service” to circulate draft Council Decisions and Regulations in time for them to be reviewed in advance of their approval.  It has asked the Minister to report on progress by the EEAS on this issue after 6 months.

While the Committee acknowledged the importance of overriding scrutiny in the case of “genuine operational requirements”, eg the rapidly developing situation in Ukraine, it criticises the Foreign & Commonwealth Office for failing to brief the Committee on new sanctions measures in a timely fashion eg in the case of sanctions against Zimbabwe there were no pressing operational requirements to justify the override of scrutiny.  It describes the Government’s engagement with Parliament in relation to the Iran re-listings as being characterised by “mistakes, omissions, and unsatisfactory responses”.

EU EXTENDS IRAN HUMAN RIGHTS SANCTIONS, & RELISTS BANK TEJARAT & 32 IRISL COMPANIES ON PROLIFERATION SANCTIONS

The EU has relisted Bank Tejarat and 32 companies said to be owned by the Islamic Republic of Iran Shipping Lines in its sanctions targeted at Iranian nuclear proliferation.  Their previous listings were annulled by the European Court in January (see previous blogs here and here) and now have new statements of reasons (which remove circumvention of sanctions and involvement in Iran’s nuclear programme for listing Bank Tejarat, instead detailing its alleged relationship with the Iranian state and involvement in procuring prohibited goods and technology, & amend the connections alleged between IRISL and the 32 companies).

These re-listings are in Council Implementing Regulation (EU) 2015/549 implementing Council Regulation (EU) 267/2012 and Council Decision (CFSP) 2015/556 amending Council Decision 2010/413/CFSP.  Listed people and entities are subject to import and export bans on crude oil, petroleum products, and dual-use goods, restrictions on access to financial services, and an EU-wide asset freeze.

In addition, the EU has extended its separate measures which impose an EU-wide asset freeze on Iranian people and entities said to be responsible for or complicit in human rights abuses until 13 April 2016, deleted the entries for Nabiollah Heydari, Gholomani Rezvani, and Mousa Elahi, and updated the reasons for 47 people and the Centre to Investigate Organized Crime. These changes are by Council Implementing Regulation (EU) 2015/548 implementing Council Regulation (EU) 359/2011 and Council Decision (CFSP) 2015/555 amending Council Decision 2011/235/CFSP.

The corresponding HM Treasury notices can be found here and here.

A list of sanctions in force against Iran (both the nuclear & human rights regimes) can be found in the “sanctions in force” section of this blog.

US TAKES JOINT ACTION WITH SAUDI ARABIA TO TARGET TERRORIST FINANCING

The US and Saudi Arabia have taken joint action to target the operations of Al-Furqan Foundation Welfare Trust, an entity alleged to be involved in financing terrorist activities and seeking to circumvent US and UN sanctions regimes.  Al-Furqan is said to be the successor to the Afghan Support Committee (ASC) and Revival of Islamic Heritage Society (RIHS), both designated in 2002, and is accused of funding terrorist organisations including al-Qaida, the Taliban, and Lashkar-e-Tayyiba since its establishment in the mid-2000s.

Saudi Arabia has designated Al-Furqan under its Law of Terrorism Crimes and Financing and Royal Decree A/44, and the US Treasury’s Office of Foreign Assets Control has listed the organisation as a Specially Designated Global Terrorist on its list of Specially Designated Nationals.  Under the measures, Al-Furqan will have all of its assets under US or Saudi jurisdiction frozen, and US and Saudi persons will generally be prohibited from doing business with it.

The SDN list has been updated to add Al-Furqan and consolidate its listing with those of ASC and RIHS.