AMENDMENTS TO EU’S AL QAIDA AND NORTH KOREA SANCTIONS LISTS

The European Council has made the following amendments to its sanctions regimes.

Al-Qaida

On 16 February 2013, the EU published Commission Implementing Regulation (EU) No 132/2013, amending Council Regulation (EC) No 881/2002 imposing restrictive measures on certain people and entities associated with Al-Qaida.  Regulation 132/2013 removes Suliman Hamd Suleiman Al-Buthe from the list of people targeted by the EU’s restrictive measures, following his de-designation by the UN Security Council Sanctions Committee on 13 February 2013. This UN de-designation followed a request submitted through the office of the UN Ombudsperson, Judge Kimberley Prost.

North Korea

On 19 February 2013, the EU published Commission Implementing Regulation (EU) No 137/2013, amending Council Regulation (EC) No 329/2007 concerning restrictive measures against the Democratic People’s Republic of Korea.  This regulation amends the list of entities and individuals subject to EU economic sanctions.

UK IMPLEMENTS MODIFICATIONS TO OFFENCES IN EU IRAN SANCTIONS

On 20 February 2013, the UK adopted the Export Control (Iran Sanctions) (Amendment) Order 2013 which amends the Export Control (Iran Sanctions) Order 2012 to bring it in line with changes adopted by the European Council to the EU Iranian sanctions regime in Council Regulation (EU) No 1263/2012 of 21 December 2012.

The new order creates a number of new offences for an individuals who supply proscribed goods, or provide financial assistance, technical assistance or brokering services in relation to proscribed goods, to an Iranian person, entity or body or for use in Iran.

LISTING THE SUBSIDIARIES OF IRANIAN BANKS: MELLI BANK PLC LOSES IN THE GENERAL COURT

European Court of JusticeMelli Bank Plc is a UK bank regulated by the Financial Services Authority, owned by Bank Melli Iran.  The European Court has rejected Melli Bank Plc’s 2nd application for annulment.

In the first case (Case T-246/08), the Court upheld the European Council’s power to include subsidiaries of Iranian banks on the EU’s sanctions list because of the danger that a parent may apply pressure on its subsidiaries to circumvent sanctions.  The Court said that the Council can presume that this is the case with wholly owned subsidiaries (like Melli Bank Plc), but has to perform a case by case analysis of whether the subsidiary is owned or controlled by the parent for all others.  The Grand Chamber of the Court of Justice agreed (Case C-380/09 P).

In this 2nd case, which challenges Melli Bank Plc’s subsequent EU designation, the General Court has decided that Melli Bank Plc had been given sufficient reasons and evidence to justify its designation, given that it was listed automatically for being a wholly owned subsidiary.

The Court has taken a strict approach to the admissibility of various other arguments, and on that basis did not rule on: (a) whether Melli Bank Plc should be automatically de-listed if Bank Melli Iran were to be de-listed, (b) whether Melli Bank Plc should be regarded as an emanation of the Iranian State, (c) whether the EU measure requiring the automatic listing of subsidiaries is an unlawful criterion.

UK GOVERNMENT WILL GIVE REASONS FOR DE-LISTINGS ON UK TERRORIST LIST

On 14 February 2013, the UK Government published its response to the second report of the independent reviewer of terrorism legislation, David Anderson QC, on the operation of the Terrorist Asset-Freezing Etc. Act 2010.

In the response, the UK Government welcomed and accepted the independent reviewer’s recommendation that HM Treasury should routinely provide any formerly designated individual or group requesting reasons for being de-listed with a written statement explaining why designation has been revoked or allowed to lapse.

EU RENEWS SANCTIONS AGAINST ZIMBABWE BUT LIFTS SANCTIONS ON A NUMBER OF PEOPLE AND ENTITIES

The European Council has today suspended the travel ban on 6 members of the Government of Zimbabwe, removed 21 individuals and 1 entity from the list, and has renewed sanctions against everyone else on the list for a year, until 20 February 2014.  The new decision is Council Decision 2013/89/CFSP of 18 February 2013, which amends Decisoin 2011/101/CFSP.

The Council has said that its decision to suspend and remove certain individuals and entities from the list is a result of an agreement between Zimbabwean political parties on a draft constitution and a proposed referendum in March on the constitution and the holding of elections in July, and that it will remove the sanctions completely if there is a fair and peaceful referendum and election.

Peters & Peters, instructing Brick Court Chambers, act for all of the de-listed and suspended individuals and companies, and for a number that remain listed, in a case currently pending before the General Court of the European Union.

EU SANCTIONS ON NORTH KOREA STRENGTHENED

The European Council has strengthened EU restrictive measures against the Democratic People’s Republic of Korea (DPRK) because the recent nuclear test and ballistic missile test on 12 December 2012.

The EU decision gives effect to measures provided for in UN Security Council resolution 2087, which includes a number of additional designations and brings the total number of people subject to a travel ban and an asset freeze to 26 while the total number of entities targeted by an asset freeze now amounts to 33.

The Council also agreed EU autonomous sanctions (i.e. not derived from UN measures): it banned the export and import key components for ballistic missiles with the DPRK, such as certain types of aluminium used in ballistic missile-related systems. The precise scope of that provision will be defined in implementing legislation that is yet to be adopted.

The Council also prohibited trade in new public bonds from the DPRK. It outlawed trade in gold, precious metals and diamonds with North Korean public bodies and stopped the delivery of new DPRK denominated banknotes and coinage to the central bank of the DPRK. North Korean banks will no more be allowed to open new branches in the European Union nor establish joint ventures with European financial institutions. Nor will European banks be permitted to establish offices and subsidiaries in the DPRK. Finally, the Council took steps enabling future restrictions against individuals and entities involved in trade with the DPRK in conventional arms or nuclear and ballistic components.

HM TREASURY RENEWS UK TERRORIST DESIGNATIONS

On 8 February 2013, HM Treasury issued a notice under s. 4 of The Terrorist Asset-Freezing etc. Act 2010 renewing final designations as against both Khalid Shaikh Mohammed and the entity known as “Holy Land Foundation For Relief And Development” for the period of one year. Accordingly the asset freezing prohibitions contained in the Act continue to apply to both entities.

Relevant institutions and others are required to check whether they maintain any accounts or otherwise hold any funds or economic resources for, or provide financial services to, the designated persons. If so, such accounts must be frozen and, unless licensed by the Treasury, the relevant institutions must not deal with the funds or economic resources or make them available to the two named entities and must suspend the provision of any financial services to such persons.  Any such findings or any reasonably held suspicions that a person has committed an offence under the Act must (if not previously reported) be reported to HM Treasury pursuant to s. 19 of the 2010 Act.

EU TO REVISE ZIMBABWE SANCTIONS

On 20 February 2013, the European Council has said that it will announce revisions to the EU sanctions list which currently comprises 123 Zimbabwean individuals and entities. European sanctions were first imposed on Zimbabwe in 2002, when 20 members of the government had their assets frozen and travel bans imposed for their “wide responsibility” for “serious violations of human rights and of the freedom of opinion, of association and of peaceful assembly”. The USA imposed its own sanctions shortly afterwards, followed  by a number of Commonwealth countries, but not the United Nations.

The European Council has added to the sanctions list a number of times, in particular in 2009 when, in response to violence during the presidential run-off election in 2008, around 150 people and entities were added.  There have been indications that the EU will remove some people from the list in February 2013; the EU supports the National Unity Government in Zimbabwe (a coalition which includes Zanu PF and the MDC).

121 individuals and entities on the Zimbabwe sanctions list are currently challenging their designations in the European  Court, represented by
Peters & Peters, instructing counsel from Brick Court Chambers.