ECJ says actions by armed forces can be terrorist acts for sanctions purposes

The European Court of Justice has just given judgment in the LTTE case, Case C-158/14 A, B, C, D v Minister van Buitenlandse Zaken.  The Court followed the views of Advocate General Sharpston in her opinion (see previous blog). This was a preliminary reference, meaning that the ECJ was answering questions about the interpretation of EU law rather than being asked to invalidate sanctions measures.  The 2 main points in the judgment are that:

  • The preliminary reference was admissible because it was not clear that A, B, C and D would have had standing to bring a direct action in the General Court (since they were not EU-designated) – had they had so they would have had to have brought a direct action not a preliminary reference; and
  • Actions by armed forces during periods of armed conflict within the meaning of international humanitarian law can constitute terrorist offences / terrorist acts for the purposes of the EU’s terrorist asset freezing regime.

EU renews targeted Russia sanctions

The EU has decided to renew its asset freezing measures and travel bans on people and entities said to be involved in undermining Ukraine’s territorial integrity (and related criteria) for a further 6 months, until 15 September 2017.  The EU has also removed 2 deceased people from its listings bringing the total to 150 people and 37 entities listed on these measures.

See Implementing Regulation 2017/437 implementing Regulation 269/2014 and Decision 2017/445 amending Decision 2014/145/CFSP.

ZTE agrees $1.2bn fine for US sanctions violations

ZTE (Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd), a Chinese telecoms company, has agreed with OFAC, BIS and the DOJ in the USA to plead guilty to civil and criminal charges of violating US sanctions on Iran and North Korea, and pay a combined $1.2bn in fines ($300m of which is suspended).  It also agreed to a 7-year suspended denial of export privileges, and to dismiss 4 senior officials who were involved in the violations.

A 5-year-long investigation found that ZTE had conspired to evade US sanctions by incorporating US components into its equipment and illegally shipping it to Iran, and by making 283 shipments of telecoms equipment to North Korea.  ZTE is also said to have used “isolation companies” to conceal the use of controlled US-components, intentionally failed to mention them on customs declarations, employed people to specifically remove incriminating evidence from internal communications, and caused its lawyers to unintentionally lie to US officials.

ZTE was first penalised by US authorities in March 2016, when US companies were prohibited from selling to it without a specific licence, and non-US companies were prohibited from selling products to it which contained a significant percentage of US-made components (see previous blog).  The US Department of Commerce will recommend that the requirement for a licence to do business with ZTE be lifted if ZTE complies with the terms of its settlement agreement.

Potential new EU sanctions on DRC

The EU has informed the Democratic Republic of Congo that it is ready to impose new targeted sanctions in response to the serious human rights violations that have recently occurred in the country, the refusal of President Joseph Kabila to stand down at the end of his term, and the general blockage of the December 2016 political agreement.  The Council has invited the High Representative to initiate work on new measures which would target those responsible for the human rights violations or incitements to violence, and those obstructing a consensual and peaceful solution to the crisis in DRC. The Council’s press release is here.

EU renews Ukraine misappropriation sanctions

kievThe EU has renewed its asset freezes relating to people identified as being responsible for misappropriating Ukrainian state funds for 1 year, following its annual review.  They were first introduced in March 2014.  See Implementing Regulation 2017/374 implementing Regulation 208/2014 and Decision 2017/381 amending Decision 2014/119/CFSP.

EU calls for further Swiss cooperation on sanctions

swissThe EU Council has published its conclusions on EU relations with Switzerland, in which it notes Switzerland’s voluntary alignment to EU sanctions on a case-by-case basis.  It encourages Switzerland to remain consistent in the application of sanctions, including in preventing their circumvention, and invites Switzerland to align itself further with EU sanctions on Russia over its involvement in the crisis in Ukraine.

The EU’s press release is here.

UN report finds evidence of widespread N Korea sanctions evasion

north-korea-1-pyongyangA new unpublished UN report is said to have found that North Korea is using a network of front companies to “[flout] sanctions through trade in prohibited goods, with evasion techniques that are increasing in scale, scope, and sophistication”.  The report also criticises Member States for lacking the “political will” to back up the tougher sanctions on North Korea that were introduced last year (see previous blog), failing to commit the resources necessary for their effective implementation.

Russia & China veto new UN sanctions on Syria

un-security-council-1Russia and China have vetoed a draft UN resolution put forward by the US, UK, and France that would have prohibited the sale of helicopters to Syria and sanctioned 11 Syrian commanders or officials and 10 entities linked to chemical weapon attacks in the country (see previous blog). Russian President Vladimir Putin described the draft resolution as “totally inappropriate”, and China said that while it opposed the use of chemical weapons it was too early to act as the international investigation into the attacks was ongoing. It is the 7th time Russia has vetoed a UN resolution on Syria, and the 6th time for China.