EU SUSPENDS CERTAIN IRAN SANCTIONS AS JOINT PLAN TAKES EFFECT

iran sanctionsOn 20 January 2014, the European Council announced the suspension of certain restrictive measures against Iran for six months.  The announcement said that:

 “By putting the sanctions relief in place, the EU has implemented its part of the first step towards a comprehensive solution to address concerns about the Iranian nuclear programme. The first step may be prolonged by mutual consent between the Iran and the E3/EU+3.

The changes to the previous Iranian restrictive measures are set out in our earlier blog  and are contained in Council Decision (2014/21/CFSP, amending 2010/413/CFSP) and a Council Regulation (2014/42/EU, amending EU Regulation 267/2012).

EU RESTRICTS LIABILITY ARISING FROM LIBYA TARGETED SANCTIONS

libyaOn 20 January 2014, The EU’s sanctions relating to Libya were amended by the European Council to amend the “non-liability” and “no claim” clauses. Council Regulation No.45 of 2014, amends Council Regulation 204 of 2011, by providing (in approximate summary) that:

(i)   Freezing funds or economic resources or refusing to make economic resources available, if it is carried out “in good faith” on the basis that such action is in accordance with the Regulation, will not give rise to liability on the part of the person / body implementing it, unless it is proved that the funds / resources were frozen / withheld negligently (Article 11), and

 (ii)               No claims in connection with any contract or trans­action the performance of which has been affected by the Regulation, shall be satisfied, if they are made by a Libyan person or entity, designated person/entity, or any party so connected (Article 12).

These amendments replicate wording of the Guidelines on the implementation and evaluation of restrictive measures (sanctions) in the framework of the EU Common Foreign and Security Policy adopted by the Council on 15 June 2012 (EU Council 11205/2012).

The UK Minister for Europe, David Lidington MP, commented that the change had been made:

as a result of discussions between Member States regarding the potential consequences of removing from sanctions lists…entities who might thereafter seek compensation for their listing… In particular the proposal addresses concerns in a specific case, raised by one EU Member State. This concerned a construction company in that Member State which received payment-in-advance for a project which it was unable to complete as agreed due to the Libyan civil war and subsequent EU sanctions, which listed the Libyan project-funder.”

SOME IRAN SANCTIONS TO BE RELAXED FROM 20 JANUARY 2014

kerry iranAs we previously reported, EU, US and Iranian negotiators agreed an interim deal in Geneva  in November 2013 (see earlier blog). Part of that deal was that, starting on 20 January 2014, Iran would start a six-month process of eliminating its stockpile of highly enriched uranium, in exchange for a limited number of international sanctions imposed on Iran (as previously reported) being relaxed.

Accordingly, the EU proposed legislation on 7 January 2014 to suspend parts of its sanctions regime, and this weekend (12 January 2014), negotiators agreed on the details of how the interim deal will be implemented from 20 January.

US secretary of state, John Kerry, said:

As of that day, for the first time in almost a decade, Iran’s nuclear programme will not be able to advance, and parts of it will be rolled back, while we start negotiating a comprehensive agreement to address the international community’s concerns about Iran’s programme,”

This agreement is the result of weeks of negotiations over the technical implementation of November’s interim deal, and will include the temporary suspension of the following sanctions:

– the prohibition on the provision of insurance and reinsurance and transport for Iranian crude oil,

– the prohibition on the import, purchase or transport of Iranian petrochemical products and on the provision of related services,

– the prohibition on trade in gold and precious metals with the Government of Iran, its public bodies and the Central Bank of Iran, or persons and entities acting on their behalf.

There will also be an increase by tenfold of the authorisation thresholds in relation to the transfers of funds to and from Iran for humanitarian, agricultural and health purposes.

To achieve this, the European Commission and EU High Representative for Foreign Affairs and Security Policy have proposed legislation to the Council that would amend the EU’s main Iran sanctions regulation.  EU Council Joint Proposal of 7 January 2014, once implemented, will amend Articles 11, 13 and 15 of Council Regulation (EU) No 267/2012 of 23 March 2012 (as amended by Council Regulation (EU) No 1263/2012 of 21 December 2012) and will insert some new provisions.

In addition, for the six months after 20 January 2014, installments totaling $4.2bn of currently frozen Iranian assets will be repatriated to Iran at regular intervals. According to a US official:

We are basically waiting to make certain that Iran has begun to fulfil its commitments, as verified by the IAEA [International Atomic Energy Agency], before the funds are made available to the Iranians“.

FAROE FISH FIGHT IN THE WTO

We previously reported on this blog that the European Commission adopted restrictive measures against the Faroe Islands in August 2013, in response to the islands’ decision to adopt a unilateral herring quota.  The Commission’s concerns were about levels of mackerel and herring fishing on the islands, following a decision by the Faroe government to increase its fishing quota to more than three times the allocation it would have recently under current joint EU / third country arrangements that manage fishing quotas.

The Faroes have now asked the World Trade Organisation (WTO) to set up a panel to examine these restrictive measures. The Faroe Islands (18 small islands in the North Atlantic, between Scotland and Iceland) are a self-governing territory of Denmark and are not part of the European Union – Denmark (which is responsible for Faroes foreign policy) joined the EU law 1973 but the Faroes did not.  Denmark is the complainant before the WTO (all EU members states, and the EU itself, are WTO members).  On 4 November 2013, Denmark notified the WTO of a request for “consultation” with the EU regarding “the use of coercive economic measures in relation to Atlanto-Scandian herring”.  The complaint will alleged violations of the EU’s obligations under the GATT.

As we reported, Denmark has already already referred this dispute with the EU to an arbitral tribunal in the Netherlands, pursuant 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.

For more analysis, see this blog of the European Journal of International Law.