Iraq

Initial Imposition of EU Sanctions

The EU initially imposed sanctions against Iraq in 1990 in response to the Iraq-Kuwait War

UN Sanctions

UNSCR 661 (1990) – sanctions imposed on Iraq relating to the Iraq-Kuwait War

UN 1483 (2003) – asset freezes of funds belonging to members of the deposed Saddam Hussein regime, repeal of UNSCR 661 (1990)

UNSCR 1518 (2003) – stressing the importance of Member States fulfilling their obligations under UN 1483 (2003)

UNSCR 1546 (2004) – call upon Member States to prevent the transit of terrorists to and from Iraq, as well as to prevent the transfer of arms and finances for terrorists

Form of the Sanctions

Arms embargo

Asset freeze

Restrictions on trade in cultural goods

Restrictions on payment for petroleum and gas

Criteria for Inclusion in Targeted Measures

Targeted asset freezes against senior officials of the Saddam Hussein regime, as well as public bodies and authorities, and private corporations and bodies in which the Government of Iraq or other public authorities had a majority stake

Provisions in Force

Common Position 2003/495/CFSP (8 July 2003)

  • Article 1: prohibition on the sale or supply of arms and related material remains intact even after the repeal of UNSCR 661 (1990)
  • Article 2: assets of members of the Saddam Hussein regime or that were removed from Iraq by officers of the Saddam Hussein regime are frozen
  • Article 3: Member States shall take appropriate steps to return Iraqi cultural property that were illegally removed from Iraq. Trade of these items is prohibited
  • Article 4: proceeds from sale of petroleum and gas to be deposited into the Development Fund for Iraq

Amended by Common Position 2003/735/CFSP (15 October 2003) to provide clarification on Article 2

Amended by Common Position 2004/553/CFSP (20 July 2004) to amend Articles 1 and 5

Amended by Common Position 2008/186/CFSP (4 March 2008) to extend the effective end date of Articles 4 and 5

Amended by Council Decision 2011/100/CFSP (15 February 2011) to further extend the effective end date of Articles 4 and 5

Amended by Council Decision 2012/812/CFSP (21 December 2012) to provide details for the transfer of frozen funds to the successor arrangements to the Development Fund for Iraq set up by the Government of Iraq

Amended by Council Decision 2014/484/CFSP (23 July 2014)

Council Regulation (EEC) No 3541/92 (10 December 1992)

  • Prohibition on the satisfying of claims made by persons or bodies in Iraq, where the performance of such claims was affected by UNSCR 661 (1990)

Council Regulation (EC) No 1210/2003 (8 July 2003)

  • Article 2: proceeds from petroleum sales to be deposited into the Development Fund for Iraq
  • Article 3: prohibition on import/export/trade in Iraq cultural property
  • Article 4: asset freezes against public bodies/corporations in which public authorities have a majority stake (listed in Annex III), and against the individuals listed in Annex IV
  • Annex IV includes 55 individuals, including Saddam Hussein and his two sons

Amended by Council Regulation (EC) No 1799/2003 (15 October 2003) to exclude from the asset freeze the funds and economic resources of ministries and other public entities that were not located outside Iraq on the date of 22nd May 2003 but left Iraq after that date

Amended by Commission Regulation (EC) No 2119/2003 (3 December 2003) to replace Annex III with a new Annex III containing 5 entities

Amended by Commission Regulation (EC) No 924/2004 (30 April 2004) to add 16 individuals to Annex IV, including Saddam Hussein’s wives and children

Amended by Commission Regulation (EC) No 979/2004 (15 May 2004) to amend Annex III to bring the list to 199 entities. 5 natural persons are added to the list

Amended by Commission Regulation (EC) No 1086/2004 (10 June 2004) to amend Annex III to remove 5 individuals from the list. 11 individuals and 2 entities are added to Annex IV

Amended by Council Regulation (EC) No 1412/2004 (4 August 2004) to reflect changes made to the Development Fund for Iraq, the Central Bank of Iraq and the Interim Government

Amended by Commission Regulation (EC) No 1087/2005 (9 July 2005) to add 1 individual to Annex IV

Amended by Commission Regulation (EC) No 1286/2005 (4 August 2005) to add 6 individuals to Annex IV

Amended by Commission Regulation (EC) No 785/2006 (25 May 2006) to add 8 identities to Annex III and 10 individuals to Annex IV

Amended by Council Regulation (EC) No 195/2008 (4 March 2008) to facilitate alignment with developing sanctions practice regarding the identification of competent authorities for derogations from the regulations

Amended by Council Regulation (EU) No 131/2011 (15 February 2011) to extend the effective end date of Articles 2 and 10

Amended by Commission Implementing Regulation (EU) No 88/2012 (2 February 2012) to remove 3 individuals from the list

Amended by Council Regulation (EU) No 85/2013 (1 February 2013) to permit the transfer of asset freezes to the successor arrangements to the Development Fund for Iraq

Amended by Council Regulation (EU) No 791/2014 (OJ L 217, 23 July 2014)

Case Law

In Dorsch Consult Ingenieurgesellschaft mbH v Council of the European Union (T-184/95) [1998] 2 CMLR 758, the applicant was owed money by the Iraqi Government but Government’s bank had not transferred the money due to Iraqi legislation freezing all assets held by States which had adopted ‘arbitrary decisions’ (sanctions) against Iraq. The applicant applied to the Court of First Instance for compensation. The Council argued that the applicant’s loss was not caused by the restrictive measures against Iraq because the applicant’s claims were not assets, and that any losses were caused by Iraqi legislation and not by Community measures. The CFI held that the applicant had not demonstrated “actual and certain” damage as required by EC law, that the applicant had failed to make use of contractual remedies (particularly since the Iraqi legislation was repealed in 1991), and that the applicant had failed to prove causation. The CFI further held that the general interest objective of the Regulation (to maintain international security) was so fundamental that the Regulation as a lawful act could not render the Community liable in this case (applying Bosphorus v Ireland (C-84/95) [1996] 3 CMLR 257)

In Al-Kishtaini v Shanshal, The Times, June 16 1999, Richards J considered that Article 2 of the Control of Gold, Securities, Payments and Credits (Republic of Iraq) Directions 1990, which prohibited the advancing of money to a person who was resident in Iraq “at the time of the coming into force of these directions or at any later time”, did not in fact apply to those who were resident in Iraq when the directions came into force but not at the time of the advancement. The decision was reversed by the Court of Appeal in Al-Kishtaini v Shanshal [2001] EWCA Civ 264; [2001] 2 All ER (Comm) 601. The Court of Appeal held that the judge had erred in his construction of the directions.

In Ullises Shipping Corp v Fal Shipping Co Ltd (The Greek Fighter) [2006] EWHC 1729 (Comm); [2006] 2 CLC 497, the defendant had been using a vessel chartered from the claimant as an oil storage facility in the UAE, where it was confiscated by UAE authorities. The Claimant argued that the Defendant had caused cargoes of smuggled Iraqi oil to get onto the ship, whilst the Defendant denied that there was no Iraqi oil on board. Colman J gave judgment for the Claimant, holding that at least some of the oil on board was of Iraqi origin, and that the Claimant was entitled to claim damages as to the difference between the charter rate and the reduced rate of hire on the grounds that this reduced rate was caused by the UAE’s detention of the ship which was itself caused by the Defendant possessing oil in contravention of the oil embargo against Iraq.

In Saipem SpA v Rafidain Bank (In Provisional Liquidation) [2007] EWHC 3119 (Ch), the parties were in a contractual relationship for the provision of spare parts. The Defendant held certain funds on trust in an agreement governed by English law. The Claimant was unable to make a delivery to Iraq on the grounds of the UNSCR 661 (1990). David Richards J held that the agreement was frustrated by reason of war (though not explicitly as a result of sanctions)

In R v Forsyth (Richard Charles) [2010] EWCA Crim 2437, the Defendants were alleged to have entered into an agreement to help the Iraqi government to avoid the asset freezes contained within EU Regulations, specifically the Iraq (United Nations Sanctions) Order 2000. These provisions created a new criminal offence of making funds available to Iraq, of which the Defendants were convicted. On appeal of a recorder’s refusal to quash the conviction, the Defendants argued that the new offence was ultra vires. The Court of Appeal rejected their appeal. In R v Forsyth (Richard Charles) [2011] UKSC 9; [2011] 2 AC 69, the Supreme Court heard the same and similar arguments viz that the power to create new offences could only be exercised at or about the time of the implementation of the UNSCR. Lord Brown held that there was no limit on time to the power to create new offences. The appeal failed.

 

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