# EUR-Lex - 52014JC0010 - EN

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# 52014JC0010

**Joint Proposal for a COUNCIL REGULATION concerning restrictive measures in view of the situation in Ukraine /* JOIN/2014/010 final - 2014/0062 (NLE) */**

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EXPLANATORY MEMORANDUM

(1) 
On 20 February 2014, the Council condemned in
the strongest terms all use of violence in Ukraine. It called for an immediate
end to the violence, full respect of human rights and fundamental freedoms. It
called upon the Ukrainian Government to exercise maximum restraint and
opposition leaders to distance themselves from those who resort to radical
action, including violence.

(2) 
On ... February 2014, the Council adopted Decision
2014/.../CFSP concerning restrictive measures in view of the situation in Ukraine.

(3) 
Decision 2014/.../CFSP provides for the freezing
of funds and economic resources of certain persons
responsible for violations of human rights, violence or use of excessive force. These natural or legal persons, entities and bodies are listed in
the Annex to the Decision.

(4) 
Further action by the Union is needed in order
to implement Decision 2014/.../CFSP.

(5) 
The High Representative of the Union for Foreign Affairs and Security Policy and the
European Commission should make a proposal for a Regulation concerning
restrictive measures in view of the situation in Ukraine.

2014/0062 (NLE)

Joint Proposal for a

COUNCIL REGULATION

concerning restrictive measures in view of
the situation in Ukraine

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 215 thereof,

Having regard to Council Decision 2014/.../CFSP[1] of ... concerning
restrictive measures in view of the situation in Ukraine,

Having regard to the joint proposal from the
High Representative of the Union for Foreign Affairs and Security Policy and
the Commission,

Whereas:

(1)       On 20 February 2014, the
Council condemned in the strongest terms all use of violence in Ukraine. It called for an immediate end to the violence, full respect of human rights and
fundamental freedoms in Ukraine. It called upon the Ukrainian Government to
exercise maximum restraint and opposition leaders to distance themselves from
those who resort to radical action, including violence.

(2)       On ... February 2014, the
Council adopted Decision 2014/.../CFSP concerning restrictive measures in view of
the situation in Ukraine.

(3)       Decision 2014/.../CFSP
provides for the freezing of funds and economic resources of certain persons responsible for violations of human rights, violence or use of excessive
force. These natural or legal persons, entities and
bodies are listed in the Annex to the Decision.

(4)       These measures fall within
the scope of the Treaty on the Functioning of the European Union and,
therefore, notably with a view to ensuring their uniform application by
economic operators in all Member States, regulatory action at the level of the Union is necessary in order to implement them.

(5)       This Regulation respects
the fundamental rights and observes the principles recognised in particular by
the Charter of Fundamental Rights of the European Union and notably the right
to an effective remedy and to a fair trial and the right to the protection of
personal data. This Regulation should be applied in accordance with those
rights.

(6)       In order to ensure uniform
conditions for the implementation of this Regulation, implementing powers
should be conferred on the Commission. Those powers should be exercised in
accordance with Regulation (EU) No 182/2011[2].

(7)       For the implementation of
this Regulation, and in order to create maximum legal certainty within the
Union, the names and other relevant data concerning natural and legal persons,
entities and bodies whose funds and economic resources must be frozen in
accordance with this Regulation, must be made public. Any processing of
personal data should comply with Regulation (EC) No 45/2001[3] and Directive 95/46/EC[4].

(8)       In order to ensure that
the measures provided for in this Regulation are effective, it should enter
into force immediately,

HAS ADOPTED THIS REGULATION:

Article 1

For the purposes of this Regulation, the
following definitions shall apply:

(a)          ‘claim’ means any claim, whether
asserted by legal proceedings or not, made before or after the date of entry
into force of this Regulation, under or in connection with a contract or
transaction, and includes in particular:

(i)      a claim for performance of any
obligation arising under or in connection with a contract or transaction;

(ii)     a claim for extension or payment of a
bond, financial guarantee or indemnity of whatever form;

(iii)    a claim for compensation in respect
of a contract or transaction;

(iv)    a counterclaim;

(v)     a claim for the recognition or
enforcement, including by the procedure of exequatur, of a judgment, an
arbitration award or an equivalent decision, wherever made or given;

(b)          ‘contract or transaction’ means
any transaction of whatever form and whatever the applicable law, whether
comprising one or more contracts or similar obligations made between the same
or different parties; for this purpose 'contract' includes a bond, guarantee or
indemnity, particularly a financial guarantee or financial indemnity, and
credit, whether legally independent or not, as well as any related provision
arising under, or in connection with, the transaction;

(c)          ‘competent authorities’ refers to
the competent authorities of the Member States as identified on the websites
listed in Annex II;

(d)          ‘economic resources’ means assets
of every kind, whether tangible or intangible, movable or immovable, which are
not funds, but may be used to obtain funds, goods or services;

(e)          'freezing of economic resources'
means preventing the use of economic resources to obtain funds, goods or
services in any way, including, but not limited to, by selling, hiring or
mortgaging them;

(f)          ‘freezing of funds’ means
preventing any move, transfer, alteration, use of, access to, or dealing with
funds in any way that would result in any change in their volume, amount,
location, ownership, possession, character, destination or other change that
would enable the funds to be used, including portfolio management;

(g)          ‘funds’ means financial assets
and benefits of every kind, including, but not limited to:

(i)      cash, cheques, claims on money, drafts,
money orders and other payment instruments;

(ii)     deposits with financial institutions
or other entities, balances on accounts, debts and debt obligations;

(iii)    publicly-and privately-traded
securities and debt instruments, including stocks and shares, certificates
representing securities, bonds, notes, warrants, debentures and derivatives
contracts;

(iv)    interest, dividends or other income on
or value accruing from or generated by assets;

(v)     credit, right of set-off, guarantees,
performance bonds or other financial commitments;

(vi)    letters of credit, bills of lading,
bills of sale; and

(vii)   documents showing evidence of an
interest in funds or financial resources;

(h)          ‘territory of the Union’ means the territories of the Member States to which the Treaty is applicable, under
the conditions laid down in the Treaty, including their airspace;

(i)           ‘transfer of funds’ means:

(i)      any transaction carried out on behalf
of a payer through a payment service provider by electronic means, with a view
to making funds available to a payee at a payment service provider,
irrespective of whether the payer and the payee are the same person. The terms
payer, payee and payment service provider have the same meaning as in Directive
2007/64/EC[5];

(ii)     any transaction by non-electronic
means such as in cash, cheques or accountancy orders, with a view to making
funds available to a payee irrespective of whether the payer and the payee are
the same person.

Article 2

1.           All funds and economic
resources belonging to, owned, held or controlled by any natural or legal
person, entity or bodies as listed in Annex I shall be frozen.

2.           No funds or economic
resources shall be made available, directly or indirectly, to or for the
benefit of natural or legal persons, entities or bodies listed in Annex I.

Article 3

1.           Annex I shall include
natural or legal persons, entities and bodies who, in accordance with Article ...
of Council Decision 2014/.../CFSP of ..., have been identified by the Council as
being responsible for violations of human rights,
violence or use of excessive force in Ukraine, and
natural or legal persons, entities and bodies associated with them.

2.           Annex I shall include only
the following information on listed natural or legal persons, entities or
bodies:

(a)     for identification purposes: in the
case of natural persons, surname and given names (including alias names and
titles, if any); date and place of birth; nationality; passport and identity
card numbers; tax and social security numbers; sex; address or other information
on whereabouts; function held or profession; in the case of legal persons,
entities or bodies, name, place and date of registration, registration number
and place of business.

(b)     the date on which the natural or legal
person, entity or body has been included in Annex I;

(c)     the grounds for listing.

3.           Annex I may also include
information on family members of the persons listed, provided that the
inclusion of this information is considered to be necessary in a specific case
for the sole purpose of verifying the identity of the listed natural person in
question.

Article 4

1.           By way of derogation from
Article 2, the competent authorities of the Member States may authorise the
release of certain frozen funds or economic resources, or the making available
of certain funds or economic resources, under such conditions as they deem
appropriate, after having determined that the funds or economic resources
concerned are:

(a)     necessary to satisfy the basic needs
of natural or legal persons, entities or bodies listed in Annex I, and
dependent family members of such natural persons, including payments for
foodstuffs, rent or mortgage, medicines and medical treatment, taxes, insurance
premiums, and public utility charges;

(b)     intended exclusively for payment of
reasonable professional fees or reimbursement of incurred expenses associated
with the provision of legal services;

(c)     intended exclusively for payment of
fees or service charges for routine holding or maintenance of frozen funds or economic
resources;

(d)     necessary for extraordinary expenses,
provided that the relevant competent authority has notified the grounds on
which it considers that a specific authorisation should be granted to the
competent authorities of the other Member States and to the Commission at least
two weeks prior to authorisation;

(e)     to be paid into or from an account of
a diplomatic mission or consular post or an international organisation enjoying
immunities in accordance with international law, insofar as such payments are
intended to be used for official purposes of the diplomatic mission or consular
post or international organization;

(f)     necessary to ensure human safety or
environmental protection.

2.           The Member State concerned
shall inform the other Member States and the Commission of any authorisation
granted under paragraph 1.

Article 5

1.           By way of derogation from
Article 2, the competent authorities in the Member States may authorise the
release of certain frozen funds or economic resources, if the following
conditions are met:

(a)     the funds or economic resources are
subject to an arbitral decision rendered prior to the date on which the natural
or legal person, entity or body referred to in Article 2 was included in Annex
I, or of a judicial or administrative decision rendered in the EU, or a
judicial decision enforceable in the Member State concerned, prior to or after
that date;

(b)     the funds or economic resources will
be used exclusively to satisfy claims secured by such a decision or recognised
as valid in such a decision, within the limits set by applicable laws and
regulations governing the rights of persons having such claims;

(c)     the decision is not for the benefit of
a natural or legal person, entity or body listed in Annex I; and

(d)     recognising the decision is not contrary
to public policy in the Member State concerned.

2.           The Member State concerned
shall inform the other Member States and the Commission of any authorisation
granted under paragraph 1.

Article 6

1.           By way of derogation from
Article 2 and provided that a payment by a natural or legal person, entity or
body listed in Annex I is due under a contract or agreement that was concluded
by, or an obligation that arose for the natural or legal person, entity or body
concerned, before the date on which that natural or legal person, entity or
body was included in Annex I, the competent authorities of the Member States may
authorise, under such conditions as they deem appropriate, the release of
certain frozen funds or economic resources, provided that the competent
authority concerned has determined that:

(a)     the funds or economic resources shall
be used for a payment by a natural or legal person, entity or body listed in
Annex I; and

(b)     the payment is not in breach of
Article 2(2).

2.           The Member State concerned
shall inform the other Member States and the Commission of any authorisation
granted under paragraph 1.

Article 7

1.           Article 2(2) shall not
prevent the crediting of the frozen accounts by financial or credit
institutions that receive funds transferred by third parties onto the account
of a listed natural or legal person, entity or body, provided that any
additions to such accounts will also be frozen. The financial or credit
institution shall inform the relevant competent authority about any such
transaction without delay.

2.           Article 2(2) shall not
apply to the addition to frozen accounts of:

(a)     interest or other earnings on those
accounts;

(b)     payments due under contracts,
agreements or obligations that were concluded or arose before the date on which
the natural or legal person, entity or body referred to in Article 2 has been
included in Annex I; or

(c)     payments due under judicial,
administrative or arbitral decisions rendered in a EU Member State or
enforceable in the Member State concerned; and

provided that any such interest, other earnings
and payments are frozen in accordance with Article 2(1).

Article 8

1.           Without prejudice to the
applicable rules concerning reporting, confidentiality and professional
secrecy, natural and legal persons, entities and bodies shall:

(a)     supply immediately any information which would facilitate compliance with this
Regulation, such as information on accounts and amounts frozen in accordance
with Article 2, to the competent authority of the Member State where they are
resident or located, and shall transmit such information, directly or through
the Member State, to the Commission; and

(b)     co-operate with the competent
authority in any verification of this information.

2.           Any additional information
received directly by the Commission shall be made available to the Member
States.

3.           Any information provided
or received in accordance with this Article shall be used only for the purposes
for which it was provided or received.

Article 9

It shall be prohibited to participate, knowingly
and intentionally, in activities the object or effect of which is to circumvent
the measures referred to in Article 2.

Article 10

1.           The freezing of funds and
economic resources or the refusal to make funds or economic resources
available, carried out in good faith on the basis that such action is in
accordance with this Regulation, shall not give rise to liability of any kind
on the part of the natural or legal person or entity or body implementing it,
or its directors or employees, unless it is proved that the funds and economic
resources were frozen or withheld as a result of negligence.

2.           Actions by natural or
legal persons, entities or bodies shall not give rise to any liability of any
kind on their part if they did not know, and had no reasonable cause to
suspect, that their actions would infringe the prohibitions set out in this
Regulation.

Article 11

1.           No claims in connection
with any contract or transaction the performance of which has been affected,
directly or indirectly, in whole or in part, by the measures imposed under this
Regulation, including claims for indemnity or any other claim of this type,
such as a claim for compensation or a claim under a guarantee, notably a claim
for extension or payment of a bond, guarantee or indemnity, particularly a
financial guarantee or financial indemnity, of whatever form, shall be
satisfied, if they are made by:

(a)     designated natural or legal persons,
entities or bodies listed in Annex I;

(b)     any natural or legal person, entity or
body acting through or on behalf of one of the persons, entities or bodies
referred to in point (a).

2.           In any proceedings for the
enforcement of a claim, the onus of proving that satisfying the claim is not
prohibited by paragraph 1 shall be on the natural or legal person, entity or
body seeking the enforcement of that claim.

3.           This Article is without
prejudice to the right of the natural or legal persons, entities and bodies
referred to in paragraph 1 to judicial review of the legality of the
non-performance of contractual obligations in accordance with this Regulation.

Article 12

1.           The Commission and Member States shall inform each other of the measures taken under this Regulation and share
any other relevant information at their disposal in connection with this
Regulation, at three-monthly intervals, in particular information:

(a)     in respect of funds frozen under
Article 2 and authorisations granted under Articles 4, 5 and 6;

(b)     in respect of violation and
enforcement problems and judgments handed down by national courts.

2.           The Member States shall
immediately inform each other and the Commission of any other relevant
information at their disposal which might affect the effective implementation
of this Regulation.

Article 13

1.           The Commission shall be
empowered to:

(a)     amend Annex I on the basis of
decisions taken by the Council in respect of Annex ... to Council Decision 2014/.../CFSP;
and

(b)     amend Annex II on the basis of
information supplied by Member States.

2.           The Commission shall
state, in Annex I, the grounds for its decision to include an entry in that
Annex, and shall communicate its decisions, including the grounds for the
listing to the listed natural or legal persons, entities or bodies if the
address is known or, if the address is not known, draw its decisions to the
attention of the listed natural or legal persons, entities or bodies through
the publication of a notice in the Official Journal of the European Union,
providing such natural or legal person, entity or body with an opportunity to
submit observations.

3.           Where observations are
submitted or where substantial new evidence is presented, the Commission shall
review its decision in light of the observations submitted and any other
relevant information, following the procedure referred to in Article 14(2), and
inform the natural or legal person, entity or body of the outcome of the
review.

Article 14

1.           The Commission shall be
assisted by a committee. That committee shall be a committee within the meaning
of Regulation (EU) No 182/2011.

2.           Where reference is made to
this paragraph, Article 5 of Regulation (EU) No 182/2011 shall apply.

Article 15

1.           The Commission shall
process personal data in order to carry out its tasks under this Regulation.
These tasks include:

(a)     preparing and making amendments of
Annex I;

(b)     including the contents of Annex I in
the electronic, consolidated list of persons, groups and entities subject to EU
financial sanctions available on the website[6];

(c)     processing of information on the
impact of the measures of this Regulation such as the value of frozen funds and
information on authorisations granted by the competent authorities.

2.           The Commission may process
relevant data relating to criminal offences committed by listed natural
persons, and to criminal convictions or security measures concerning such
persons, only to the extent that such processing is necessary for the
preparation of Annex I to this Regulation. Such data shall not be made public
or exchanged.

3.           For the purposes of this
Regulation, the Commission service listed in Annex II is designated as
“controller” for the Commission within the meaning of Article 2(d) of
Regulation (EC) No 45/2001, in order to ensure that the natural persons
concerned can exercise their rights under Regulation (EC) No 45/2001.

Article 16

1.           Member States shall lay
down the rules on penalties applicable to infringements of the provisions of
this Regulation and shall take all measures necessary to ensure that they are
implemented. The penalties provided for must be effective, proportionate and dissuasive.

2.           Member States shall notify
these rules to the Commission without delay after the entry into force of this
Regulation and shall notify it of any subsequent amendment.

Article 17

1.           Member States shall
designate the competent authorities referred to in this Regulation and identify
them on the websites listed in Annex II. Member States shall notify the
Commission of any changes in the addresses of their websites listed in Annex
II.

2.           Member States shall notify
the Commission of their competent authorities, including the contact details of
those competent authorities, without delay after the entry into force of their
Regulation, and shall notify it of any subsequent amendment.

3.           Where this Regulation sets
out a requirement to notify, inform or otherwise communicate with the
Commission, the address and other contact details to be used for such
communication shall be those indicated in Annex II.

Article 18

This Regulation shall apply:

(a)          within the territory of the Union, including its airspace;

(b)          on board of any aircraft or any
vessel under the jurisdiction of a Member State;

(c)          to any person inside or outside
the territory of the Union who is a national of a Member State;

(d)          to any legal person, entity or
body, inside or outside the territory of the Union, which is incorporated or
constituted under the law of a Member State;

(e)          to any legal person, entity or
body in respect of any business done in whole or in part within the Union.

Article 19

This Regulation shall enter into force on
the day of its publication in the Official Journal of the European Union.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For
the Council

The
President
                                                                       [...]

[1]               OJ L

[2]               Regulation (EU) No 182/2011 of the European
Parliament and of the Council of 16 February 2011 laying down the rules and
general principles concerning mechanisms for control by the Member States of
the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p.13).

[3]               Regulation (EC) No 45/2001 of
the European Parliament and of the Council of 18 December 2000 on the
protection of individuals with regard to the processing of personal data by the
Community institutions and bodies and on the free movement of such data (OJ L 8, 12.1.2001, p. 1).

[4]               Directive 95/46/EC of the
European Parliament and of the Council of 24 October 1995 on the protection of
individuals with regard to the processing of personal data and on the free
movement of such data (OJ L 281, 23.11.1995, p. 31).

[5]               Directive 2007/64/EC of the European Parliament and
of the Council of 13 November 2007 on payment services in the internal market
(OJ L 319, 5.12.2007, p. 1).

[6]               http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm

ANNEXES

to the

Joint proposal for a
COUNCIL REGULATION

concerning restrictive measures in
view of the situation in Ukraine

"ANNEX
I

List of natural and legal persons,
entities and bodies referred to in Article 2

A. Natural persons

B. Legal persons, entities and bodies

ANNEX II

Websites
for information on the competent authroities and address for notification to
the European Commission

BELGIUM

http://www.diplomatie.be/eusanctions

BULGARIA

http://www.mfa.bg/en/pages/135/index.html

CZECH REPUBLIC

http://www.mfcr.cz/mezinarodnisankce

DENMARK

http://um.dk/da/politik-og-diplomati/retsorden/sanktioner/

GERMANY

http://www.bmwi.de/DE/Themen/Aussenwirtschaft/aussenwirtschaftsrecht,did=404888.html

ESTONIA

http://www.vm.ee/est/kat_622/

IRELAND

http://www.dfa.ie/home/index.aspx?id=28519

GREECE

http://www.mfa.gr/en/foreign-policy/global-issues/international-sanctions.html

SPAIN

http://www.exteriores.gob.es/Portal/es/PoliticaExteriorCooperacion/GlobalizacionOportunidadesRiesgos/Documents/ORGANISMOS%20COMPETENTES%20SANCIONES%20INTERNACIONALES.pdf

FRANCE

http://www.diplomatie.gouv.fr/autorites-sanctions/

CROATIA

http://www.mvep.hr/sankcije

ITALY

http://www.esteri.it/MAE/IT/Politica_Europea/Deroghe.htm

CYPRUS

http://www.mfa.gov.cy/sanctions

LATVIA

http://www.mfa.gov.lv/en/security/4539

LITHUANIA

http://www.urm.lt/sanctions

LUXEMBOURG

http://www.mae.lu/sanctions

HUNGARY

http://www.kulugyminiszterium.hu/kum/hu/bal/Kulpolitikank/nemzetkozi_szankciok/

MALTA

http://www.doi.gov.mt/EN/bodies/boards/sanctions_monitoring.asp

NETHERLANDS

www.rijksoverheid.nl/onderwerpen/internationale-vrede-en-veiligheid/sancties

AUSTRIA

http://www.bmeia.gv.at/view.php3?f_id=12750&LNG=en&version=

POLAND

http://www.msz.gov.pl

PORTUGAL

http://www.portugal.gov.pt/pt/os-ministerios/ministerio-dos-negocios-estrangeiros/quero-saber-mais/sobre-o-ministerio/medidas-restritivas/medidas-restritivas.aspx

ROMANIA

http://www.mae.ro/node/1548

SLOVENIA

http://www.mzz.gov.si/si/zunanja_politika_in_mednarodno_pravo/zunanja_politika/mednarodna_varnost/omejevalni_ukrepi/

SLOVAKIA

http://www.mzv.sk/sk/europske_zalezitosti/europske_politiky-sankcie_eu

FINLAND

http://formin.finland.fi/kvyhteistyo/pakotteet

SWEDEN

http://www.ud.se/sanktioner

UNITED KINGDOM

https://www.gov.uk/sanctions-embargoes-and-restrictions

Address for notifications to the
European Commission:

European Commission

Service for Foreign Policy Instruments
(FPI)

EEAS 02/309

B-1049 Brussels

Belgium

E-mail: relex-sanctions@ec.europa.eu"