We summarised in a previous blog a number of judicial review claims being brought by individuals and entities listed on European Union sanctions lists, against the Secretary of State for Foreign and Commonwealth Affairs in the UK.
There have now been two preliminary judgments in the judicial review brought by John Bredenkamp, who was included between 2009 and 2012 on the EU’s Zimbabwe sanctions list. The first judgment (see previous blog) concerned the degree to which the role of the British Government in sanctions listings could be subject to judicial review in the English Administrative Court.
The second judgment, handed down earlier this month, orders the Government to provide Mr Bredenkamp with disclosure of documents and further information about the Government’s decision to propose his designation. Mr Justice Dingemans declined to order a number of his other requests for documents and information on the grounds that it was not necessary for the fair resolution of the claim. A link to the judgment is here.
Two men are being criminally prosecuted in the federal District Court in Chicago for engaging in “public relations, political consulting and lobbying” US officials to lift sanctions against President Robert Mugabe and others on the US Zimbabwe sanctions list, in exchange for the promise of payment. The offence carries a maximum penalty of 20 years in prison and a $1 million fine, under the International Emergency Economic Powers Act.
The position of the US Office of Foreign Asset Control (OFAC) is that lobbying is not covered by an OFAC licence authorising the provision of legal services to people on a US sanctions list, and is therefore a criminal offence. Although OFAC licences authorise “representation of persons before any federal or state agency with respect to the imposition, administration, or enforcement of U.S. sanctions against such persons”, OFAC does not consider Congress or State legislatures to be “agencies”.
A link to Erich Ferrari’s blog on this is here.
As foreshadowed in a previous blog, the European Commission has decided (on 20 August 2013) to adopt restrictive measures against the Faroe Islands in response to the islands’ decision to adopt a unilateral herring quota. The measures include restrictions on the use of EU ports by vessels fishing for the herring and mackerel stocks under the control of the Faroe Islands. Some Faroese vessels will not be allowed to dock in EU ports except in an emergency.
The Faroe Islands have now referred this dispute with the European Union to an arbitral tribunal in the Netherlands, pursuant to to the United Nations Convention on the Law of the Sea (UNCLOS), arguing that the EU restrictive measures violate the international law of the sea.
On 21 August 2013, EU foreign ministers decided to continue the current sanctions against various Zimbabwean individuals and companies for a further six months.
On 25 March 2013, sanctions against 81 individuals and 8 companies were suspended in recognition of the “peaceful, successful and credible vote to approve a new constitution” (see earlier blog post). 10 individuals and 2 companies remained listed, including President Mugabe. This will now remain the position until 20 February 2014.
In justifying this step, referring to the recent Zimbabwe Presidential elections, the EU High Representative for Foreign Policy, Catherine Ashton said: “The EU is worried by the allegations of irregularities and information indicating voter registration may have been incomplete as well as by the…lack of transparency.”
The EU’s Southern African representative had previously stated that sanctions would be lifted if the Southern African Development Community (SADC) (the body monitoring the election process) deemed the elections to be free and peaceful (see earlier blog post). On 2 August 2013, SADC had positively endorsed the election process (see earlier blog post). On 18 August 2013, SADC leaders said in a statement that “all forms of sanctions” imposed on Zimbabwe should be lifted following the holding of “free and peaceful” elections.
“I believe Zimbabwe deserves better, Zimbabweans have suffered enough” said Ms Banda, Malawi’s leader and incoming chairperson of SADC.
The position of the EU mirrors that of the US State Department which confirmed this week that US sanctions would remain and that “…a change in U.S. sanctions policy will occur only in the context of credible, transparent and peaceful reforms that reflect the will of the Zimbabwean people“.
Two open letters have recently been sent to President Obama, asking him to lift US sanctions regimes.
One comes from a group of prominent political prisoners asking President Obama to lift US sanctions on Iran. A translation of the letter is here.
The other comes from a number of organisations asking the President to lift US sanctions on Zimbabwe, which have been in place since 2003. A copy is here. The Southern African Development Community (SADC) has also urged western powers to remove all sanctions on Zimbabwe – see previous blog. A U.S. State Department spokeswoman (Jen Psaki) said this week that the U.S. program of sanctions will remain in force as long as “serious flaws” persist in Zimbabwe’s electoral process, that the recent election did “not represent a credible expression of the will of the Zimbabwean people” and that a change in the U.S. sanctions policy would occur “only in a context of credible, transparent, peaceful reforms” that reflect the public’s wishes.
Her Majesty’s Treasury (the British Government’s economic and finance ministry) has just published detailed advice on various aspects of the United Kingdom’s sanctions regimes. It includes detailed Frequently Asked Questions, and covers financial sanctions but not travel bans or export controls. A link is here.
The guidance includes an introduction to financial sanctions in the United Kingdom, who administers and applies them, the role of various regulatory bodies, and how they relate to EU and UN sanctions. Guidance is given on what is prohibited and what is not, how to obtain a licence, and how they affect different people and, and where to find further information. There are specific FAQs for individuals designated under Terrorism / Al Qaida regimes, and new sections giving advice on how designated persons may use their assets, humanitarian transactions, what constitutes ownership and control, and sector specific advice for financial institutions, insurers, charities and law firms.
HM Treasury has also issued a new licence application form for all country sanctions regimes (except Iran and Libya). The licence application forms are here: https://www.gov.uk/sanctions-embargoes-and-restrictions
The Commercial Court has granted summary judgment to Bank Melli, Persia International Bank and a German bank (DVB Bank SE) to recover over €40 million outstanding under a syndicated post-delivery ship finance facility from a number of Iranian ship owning companies, and to DVB against a number of Iranian guarantors including the Islamic Republic of Iran Shipping Lines in respect of the default under the loan facility. The case follows a line of similar cases, including Melli Bank v Holbud Limited (see previous blog).
The Court held that the borrowers and guarantors had no prospect of succeeding in their argument that they did not have to repay the sums because the European Union sanctions against Iran frustrated performance of the contract, or made it illegal or impossible to perform because it would have constituted the provision of “economic resources” or the making available of “funds” by increasing equity in the vessel. Mr Justice Simon stated that this was “not the effect of the Regulations nor is it consonant with their broad intent.”
He rejected the argument that payment under the contract constituted the provision of “economic resources” or would breach the asset freeze, since the agreement was not an asset but an instrument imposing liability to repay; the assets of designated persons were frozen but not the discharge of their liabilities. Any payments received by the Iranian banks would be paid into frozen accounts with authorisation from the relevant national authority and the borrowers had not tried to obtain a licence. The Court also rejected the borrowers’ application to make a preliminary reference to the European Court of Justice on the meaning and effect of the relevant EU Iran sanctions regulations.
The judgment, handed down on 31 July 3013, is here: Bank Melli and Persia International Bank -v- Shere Shipping and ors  EWHC 2321 (Comm).
Targeted sanctions go multi-media. In addition to this blog and related LinkedIn group on Economic Sanctions, the Watson Institute for International Studies at Brown University and the Targeted Sanctions Consortium have launched a Sanctions App for ipad, iphone and android. The app was developed at the Graduate Institute in Geneva.
The app gives information on the 22 United Nations targeted sanctions regimes, including their background, remit and effectiveness. Available for free download here. More information here.