29. 11 . 96 fENl Official Journal of the European Communities No L 309/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 2271/96

of 22 November 1996

protecting against the effects of the extra-territorial application of legislation adopted by a third

country, and actions based thereon or resulting therefrom

THE COUNCIL OF THE EUROPEAN UNION,

resulting therefrom affect or are likely to affect the

established legal order and have adverse effects on the

interests of the Community and the interests of natural

and legal persons exercising rights under the Treaty

establishing the European Community;

Whereas, under these exceptional circumstances, it is

necessary to take action at Community level to protect

the established legal order, the interests of the

Community and the interests of the said natural and legal

persons, in particular by removing, neutralising, blocking

or otherwise countering the effects of the foreign

legislation concerned;

Whereas the request to supply information under this

Regulation does not preclude a Member State from

requiring information of the same kind to be provided to

the authorities of that State;

Whereas the Council has adopted the Joint Action

96/668/CFSP of 22 November 1996 ( 2 ) in order to ensure

that the Member States take the necessary measures to

protect those natural and legal persons whose interests

are affected by the aforementioned laws and actions

based thereon, insofar as those interests are not protected

by this Regulation;

Whereas the Commission, in the implementation of this

Regulation, should be assisted by a committee composed

of representatives of the Member States;

Whereas the actions provided for in this Regulation are

necessary to attain objectives of the Treaty establishing

the European Community;

Whereas for the adoption of certain provisions of this

Regulation the Treaty does not provide powers other

than those of Article 235,

Having regard to the Treaty establishing the European

Community, and in particular Articles 73c, 113 and 235

thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European

Parliament ( 1 ),

Whereas the objectives of the Community include

contributing to the harmonious development of world

trade and to the progressive abolition of restrictions on

international trade;

Whereas the Community endeavours to achieve to the

greatest extent possible the objective of free movement of

capital between Member States and third countries,

including the removal of any restrictions on direct

investment — including investment in real estate —

establishment, the provision of financial services or the

admission of securities to capital markets;

Whereas a third country has enacted certain laws,

regulations, and other legislative instruments which

purport to regulate activities of natural and legal persons

under the jurisdiction of the Member State;

Whereas by their extra-territorial application such laws,

regulations and other legislative instruments violate

international law and impede the attainment of the

aforementioned objectives; j

Whereas such laws, including regulations and other

legislative instruments, and actions based thereon or

( ) Opinion delivered on 25 October 1996 ( OJ No C 347, 18 .

11 . 1996 ). ( ) See page 7 of this Official Journal.

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No L 309/2 ΓΕΝ Official Journal of the European Communities 29 . 11 . 96

HAS ADOPTED THIS REGULATION :

Article 1

Communication of such information shall be permitted

where the Commission is obliged or authorized to do so,

in particular in connection with legal proceedings. Such

communication must take into account the legitimate

interests of the person concerned that his or her business

secrets should not be divulged .

This Article shall not preclude the disclosure of general

information by the Commission. Such disclosure shall not

be permitted if this is incompatible with the original

purpose of such information.

In the event of a breach of confidentiality, the originator

of the information shall be entitled to obtain that it be

deleted , disregarded or rectified, as the case may be .

This Regulation provides protection against and

counteracts the effects of the extra-territorial application

of the laws specified in the Annex of this Regulation,

including regulations and other legislative instruments,

and of actions based thereon or resulting therefrom,

where such application affects the interests of persons,

referred to in Article 11 , engaging in international trade

and/or the movement of capital and related commercial

activities between the Community and third countries.

Acting in accordance with the relevant provisions of the

Treaty and notwithstanding the provisions of Article 7

( c ), the Council may add or delete laws to or from the

Annex to this Regulation.

Article 4

Article 2

No judgment of a court or tribunal and no decision of an

administrative authority located outside the Community

giving effect, directly or indirectly, to the laws specified in

the Annex or to actions based thereon or resulting there

from, shall be recognized or be enforceable in any

manner.

Article 5

Where the economic and/or financial interests of any

person referred to in Article 11 are affected , directly or

indirectly, by the laws specified in the Annex or by

actions based thereon or resulting therefrom, that person

shall inform the Commission accordingly within 30 days

from the date on which it obtained such information;

insofar as the interests of a legal person are affected, this

obligation applies to the directors, managers and other

persons with management responsibilities (')•

At the request of the Commission, such person shall

provide all information relevant for the purposes of this

Regulation in accordance with the request from the

Commission within 30 days from the date of the

request.

All information shall be submitted to the Commission

either directly or through the competent authorities of the

Member States. Should the information be submitted

directly to the Commission, the Commission will inform

immediately the competent authorities of the Member

States in which the person who gave the information is

resident or incorporated .

No person referred to in Article 11 shall comply, whether

directly or through a subsidiary or other intermediary

person, actively or by deliberate omission, with any

requirement or prohibition, including requests of foreign

courts, based on or resulting, directly or indirectly, from

the laws specified in the Annex or from actions based

thereon or resulting therefrom.

Persons may be authorized, in accordance with the

procedures provided in Articles 7 and 8 , to comply fully

or partially to the extent that non-compliance would

seriously damage their interests or those of the

Community. The criteria for the application of this

provision shall be established in accordance with the

procedure set out in Article 8 . When there is sufficient

evidence that non-compliance would cause serious

damage to a natural or legal person, the Commission

shall expeditiously submit to the committee referred to in

Article 8 a draft of the appropriate measures to be taken

under the terms of the Regulation .

Article 3

All information supplied in accordance with Article 2

shall only be used for the purposes for which it was

provided .

Information which is by nature confidential or which is

provided on a confidential basis shall be covered by the

obligation of professional secrecy. It shall not be

disclosed by the Commission without the express

permission of the person providing it.

Article 6

(') Information should he supplied to the following address:

Any person referred to in Article 11 , who is engaging in

an activity referred to in Article 1 shall be entitled to

recover any damages, including legal costs, caused to that

person by the application of the laws specified in the

Annex or by actions based thereon or resulting

therefrom.

European Commission , Directorate General I , Rue de la

Loi/Wetstraat 200 , B — 1049 Brussels ( tax ( 32-2 )

295 65 05 ).

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29. 11 . 96 EN Official Journal of the European Communities No L 309/3

Such recovery may be obtained from the natural or legal

person or any other entity causing the damages or from

any person acting on its behalf or intermediary.

The Brussels Convention of 27 September 1968 on

jurisdiction and the enforcement of judgments in civil and

commercial matters shall apply to proceedings brought

and judgments given under this Article . Recovery may be

obtained on the basis of the provisions of Sections 2 to 6

of Title II of that Convention, as well as, in accordance

with Article 57 ( 3 ) of that Convention, through judicial

proceedings instituted in the Courts of any Member State

where that person, entity, person acting on its behalf or

intermediary holds assets.

Without prejudice to other means available and in

accordance with applicable law, the recovery could take

the form of seizure and sale of assets held by those

persons, entities, persons acting on their behalf or

intermediaries within the Community, including shares

held in a legal person incorporated within the

Community.

composed of the representatives of the Member States

and chaired by the representative of the Commission .

The representative of the Commission shall submit to the

committee a draft of the measures to be taken. The

committee shall deliver its opinion on the draft within a

time limit which the chairman may lay down according

to the urgency of the matter. The opinion shall be

delivered by the majority laid down in Article 148 ( 2 ) of

the Treaty in the case of decisions which the Council is

required to adopt on a proposal from the Commission.

The votes of the representatives of the Member States

within the committee shall be weighted in the manner set

out in that Article . The chairman shall not vote .

The Commission shall adopt the measures envisaged if

they are in accordance with the opinion of the

committee .

If the measures envisaged are not in accordance with the

opinion of the committee , or if no opinion is delivered ,

the Commission shall, without delay, submit to the

Council a proposal relating to the measures to be taken .

The Council shall act by a qualified majority.

If, on the expiry of a period of two weeks from the date

of referral to the Council, the Council has not acted, the

proposed measures shall be adopted by the

Commission .

Article 7

For the implementation of this Regulation the

Commission shall :

Article 9

Each Member State shall determine the sanctions to be

imposed in the event of breach of any relevant provisions

of this Regulation . Such sanctions must be effective ,

proportional and dissuasive .

Article 10

( a ) inform the European Parliament and the Council

immediately and fully of the effects of the laws,

regulations and other legislative instruments and

ensuing actions mentioned in Article 1 , on the basis

of the information obtained under this Regulation ,

and make regularly a full public report thereon;

( b ) grant authorization under the conditions set forth in

Article 5 and, when laying down the time limits with

regard to the delivery by the Committee of its

opinion, take fully into account the time limits which

have to be complied with by the persons which are to

be subject of an authorization;

( c ) add or delete, where appropriate, references to

regulations or other legislative instruments deriving

from the laws specified in the Annex, and falling

under the scope of this Regulation;

( d ) publish a notice in the Official Journal of the

European Communities on the judgments and

decisions to which Articles 4 and 6 apply;

( e ) publish in the Official Journal of the European

Communities the names and addresses of the

competent authorities of the Member States referred

to in Article 2 .

The Commission and the Member States shall inform

each other of the measures taken under this Regulation

and of all other relevant information pertaining to this

Regulation .

Article 1 1

This Regulation shall apply to:

1 . any natural person being a resident in the

Communitv (') and a national of a Member State ,

Article 8

(') For the purposes of this Regulation , 'being a resident in the

Community ' means: being legally established in the

Community for a period of at least six months within the

12-month period immediately prior to the date on which ,

under this Regulation , an obligation arises or a right is

exercised .

For the purposes of the implementation of Article 7 ( b )

and ( c ), the Commission shall be assisted by a Committee

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No L 309/4 f EN Official Journal of the European Communities 29 . 11 . 96

any aircraft or on any vessel under the jurisdiction or

control of a Member State , acting in a professional

capacity.

2 . any legal person incorporated within the

Community,

3 . any natural or legal person referred to in Article 1 ( 2 )

of Regulation ( EEC) No 4055/86 ('),

4 . any other natural person being a resident in the

Community, unless that person is in the country of

which he is a national,

5 . any other natural person within the Community,

including its territorial waters and air space and in

Article 12

This Regulation shall enter into force on the day of its

publication in the Official Journal of the European

Communities.

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

Done at Brussels, 22 November 1996 .

For the Council

The President

S. BARRETT

(') Council Regualation ( EEC) No 4055/86 of 22 December

1986 applying the principle of freedom to provide services to

maritime transport between Member States and between

Member States and third countries ( OJ No L 378 ,

31.12.1986, p. 1 ). Regulation as last amended by Regulation

( EC) No 3573/90 ( OJ No C 353 , 17.12.1990, p. 16 ).

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29 . il. 96 ΓΕΝ Official Journal of the European Communities No L 309/5

ANNEX

LAWS, REGULATIONS AND OTHER LEGISLATIVE INSTRUMENTS (')

referred to in Article 1

COUNTRY: UNITED STATES OF AiM ERICA

ACTS

1 . 'National Defense Authorization Act for Fiscal Year 1993 ', Title XVII 'Cuban Democracy Act 1992 ',

sections 1704 and 1706

Required compliance :

The requirements are consolidated in Title I of the 'Cuban Liberty and Democratic Solidarity Act of

1996 ', see below.

Possible damages to EU interests:

The liabilities incurred are now incorporated within the 'Cuban Liberty and Democratic Solidarity Act

of 1996 ', see below.

2. 'Cuban Liberty and Democratic Solidarity Act of 1996'

Title I

Required compliance:

To comply with the economic and financial embargo concerning Cuba by the USA, by, inter alia, not

exporting to the USA any goods or services of Cuban origin or containing materials or goods originating

in Cuba either directly or through third countries, dealing in merchandise that is or has been located in

or transported from or through Cuba, re-exporting to the USA sugar originating in Cuba without

notification by the competent national authority of the exporter or importing into the USA sugar

products without assurance that those products are not products of Cuba , freezing Cuban assets, and

financial dealings with Cuba .

Possible damages to EU interests:

Prohibition to load or unload freight from a vessel in any place in the USA or to enter a USA port;

refusal to import any goods or services originating in Cuba and to import into Cuba goods or services

originating in the USA, blocking of financial dealings involving Cuba .

Title III and Title IV:

Required compliance:

To terminate 'trafficking' in property, formerly owned by US persons ( including Cubans who have

obtained US citizenship ) and expropriated by the Cuban regime . (Trafficking includes: use, sale , transfer,

control, management and other activities to the benefit of a person ).

Possible damages to EU interests:

Legal proceedings in the USA, based upon liability already accruing, against EU citizens or companies

involved in trafficking, leading to judgments/decisions to pay ( multiple ) compensation to the USA party .

Refusal of entry into the USA for persons involved in trafficking, including the spouses, minor children

and agents thereof.

(') Further information with regard to the aforementioned laws and regulations can be obtained from the European

Commission, Directorate General I.E. 3 , Rue de la LoiAVetstraat 200, B-1049 Brussels ( fax : ( 32-2 ) 295 65 05 ).

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3 . 'Iran and Libya Sanctions Act of 1996'

Required compliance :

Not to invest in Iran or Libya any amount greater than USD 40 million during a period of 12 months

that directly and significantly contributes to the enhancement of the Iranian or Libyan ability to develop

their petroleum resources. ( Investment covering the entering into a contract for the said development, or

the guaranteeing of it, or the profiting therefrom or the purchase of a share of ownership therein .)

NB: Investments under contracts existing before 5 August 1996 are exempted .

Respect of embargo concerning Libya established by Resolutions 748 ( 1992 ) and 883 ( 1993 ) of the

Security Council of the United Nations (').

Possible damages to EU interests:

Measures taken by the US President to limit imports into USA or procurement to USA, prohibition of

designation as primary dealer or as repository of USA Government funds, denial of access to loans from

USA financial institutions, export restrictions by USA, or refusal of assistance by EXIM-Bank .

REGULATIONS

1 . 1 CFR ( Code of Federal Regulations) Ch. V ( 7-1-95 edition ) Part 515 — Cuban Assets Control

Regulations, subpart B ( Prohibitions), E ( Licenses, Authorizations and Statements of Licensing Policy)

and G ( Penalties)

Required compliance:

The prohibitions are consolidated in Title I of the 'Cuban Liberty and Democratic Solidarity Act of

1996 ', see above . Furthermore, requires the obtaining of licences and/or authorizations in respect of

economic activities concerning Cuba .

Possible damages to EU interests:

Fines, forfeiture, imprisonment in cases of violation .

(') See Community implementation of those Resolutions through Council Regulation ( EC) No 3274/93 ( OJ No L 295 ,

30 . 1 1 . 1993 , p. 1 ).

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