Council Regulation (EC) No 1210/2003
of 7 July 2003
concerning certain specific restrictions on economic and financial relations with Iraq and repealing Regulation (EC) No 2465/96
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Articles 60 and 301 thereof,
Having regard to Common Position 2003/495/CFSP on Iraq and repealing Common Positions 1996/741/CFSP and 2002/599/CFSP(1),
Having regard to the proposal from the Commission,
Whereas:
(1) Further to United Nations Security Council Resolution 661 (1990) and subsequent relevant Resolutions, in particular Resolution 986 (1995), the Council imposed a comprehensive embargo on trade with Iraq. This embargo is at present laid down in Council Regulation (EC) No 2465/96 of 17 December 1996 concerning the interruption of economic and financial relations between the European Community and Iraq(2).
(2) In its Resolution 1483 (2003) of 22 May 2003, the Security Council decided that, with certain exceptions, all prohibitions related to trade with Iraq and the provision of financial or economic resources to Iraq should no longer apply.
(3) With the exception of a ban on exports of arms and related materiel to Iraq, the Resolution provides that the comprehensive restrictions concerning trade should be repealed and replaced with specific restrictions applying to proceeds from all export sales of petroleum, petroleum products, and natural gas from Iraq, and to trade in goods belonging to Iraq's cultural heritage with the objective of facilitating the safe return of those goods.
(4) The Resolution also states that certain funds and economic resources, in particular those belonging to former Iraqi President Saddam Hussein and senior officials of his regime, should be frozen, subject to designation by the Committee of the Security Council established pursuant to paragraph 6 of Resolution 661 (1990), and that such funds should subsequently be transferred to the Development Fund for Iraq.
(5) In order to allow the Member States to effect the transfer of frozen funds, economic resources and proceeds of economic resources to the Development Fund for Iraq, provision should be made for such funds and economic resources to be unfrozen.
(6) The Resolution stipulates that all petroleum, petroleum products and natural gas exported by Iraq, as well as the payments for such goods, should be exempt from legal proceedings, attachment, garnishment and execution by those having claims against Iraq. This temporary measure is necessary in order to promote the economic reconstruction of Iraq and the restructuring of its debt, which will help remove the threat to international peace and security constituted by the current situation in Iraq in the common interest of the international community and in particular the Community and its Member States.
(7) Common Position 2003/495/CFSP makes provision for an amendment of the current Community regime in order to align it with UNSC Resolution 1483 (2003).
(8) These measures fall under the scope of the Treaty and, therefore, in particular with a view to avoiding distortion of competition, Community legislation is necessary to implement the relevant decisions of the Security Council as far as the territory of the Community is concerned. For the purposes of this Regulation, the territory of the Community is deemed to encompass the territories of the Member States to which the Treaty is applicable, under the conditions laid down in that Treaty.
(9) In order to create maximum legal certainty within the Community, the names and other relevant data relating to natural or legal persons, groups or entities identified by the UN authorities whose funds and economic resources are to be frozen, should be published and a procedure established within the Community to amend these lists.
(10) For reasons of expediency, the Commission should be empowered to amend the Annexes to this Regulation setting out the list of cultural goods, the lists of persons, bodies and entities, whose funds and economic resources are to be frozen, and the list of competent authorities.
(11) The competent authorities of the Member States should, where necessary, be empowered to ensure compliance with the provisions of this Regulation.
(12) The Commission and Member States should inform each other of the measures taken under this Regulation and of other relevant information at their disposal in connection with this Regulation, and should cooperate with the Committee established by UNSC Resolution 661 (1990), in particular by supplying it with information.
(13) Member States should lay down rules on sanctions applicable to infringements of the provisions of this Regulation and ensure that they are implemented. Those sanctions should be effective, proportionate and dissuasive.
(14) Since the comprehensive trade measures of Regulation (EC) No 2465/96 are being replaced by the specific trade restrictions of this Regulation, and this Regulation imposes freezing measures which require immediate application by economic operators, it is necessary to ensure that sanctions for breaches of this Regulation can be imposed as soon as it enters into force.
(15) For the sake of clarity, Regulation (EC) No 2465/96 should be repealed in its entirety.
(16) Council Regulation (EEC) No 3541/92 of 7 December 1992 prohibiting the satisfying of Iraqi claims with regard to contracts and transactions, the performance of which was affected by United Nations Security Council Resolution 661 (1990) and related resolutions(3) should remain in force,
HAS ADOPTED THIS REGULATION:
Article 1
For the purpose of this Regulation, the following definitions shall apply:
1. "Sanctions Committee" means: the Committee of the Security Council of the United Nations which was established pursuant to paragraph 6 of Resolution 661 (1990);
2. "funds" means financial assets and economic benefits of every kind, including but not limited to:
(a) cash, cheques, claims on money, drafts, money orders and other payment instruments;
(b) deposits with financial institutions or other entities, balances on accounts, debts and debt obligations;
(c) publicly- and privately-traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivatives contracts;
(d) interest, dividends or other income on or value accruing from or generated by assets;
(e) credit, right of set-off, guarantees, performance bonds or other financial commitments;
(f) letters of credit, bills of lading, bills of sale;
(g) documents evidencing an interest in funds or financial resources,
(h) any other instrument of export-financing;
3. "economic resources" means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but can be used to obtain funds, goods or services;
4. "freezing of funds" means preventing any move, transfer, alteration, use of 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 use of the funds, including portfolio management;
5. "freezing of economic resources" means preventing their use to obtain funds, goods or services in any way, including, but not limited to, by selling, hiring or mortgaging them;
6. "Development Fund for Iraq" means the Development Fund for Iraq held by the Central Bank of Iraq.
Article 2
All proceeds from all export sales of petroleum, petroleum products, and natural gas from Iraq, as listed in Annex I, as of 22 May 2003 shall be deposited into the Development Fund for Iraq under the conditions set out in UNSC Resolution 1483 (2003) and in particular paragraphs 20 and 21 thereof, until such time as an internationally recognized, representative government of Iraq is properly constituted.
Article 3
1. The following shall be prohibited:
(a) the import of or the introduction into the territory of the Community of,
(b) the export of or removal from the territory of the Community of, and
(c) the dealing in, Iraqi cultural property and other items of archaeological, historical, cultural, rare scientific and religious importance including those items listed in Annex II, if they have been illegally removed from locations in Iraq, in particular, if:
(i) the items form an integral part of either the public collections listed in the inventories of Iraqi museums, archives or libraries' conservation collection, or the inventories of Iraqi religious institutions, or
(ii) there exists reasonable suspicion that the goods have been removed from Iraq without the consent of their legitimate owner or have been removed in breach of Iraq's laws and regulations.
2. These prohibitions shall not apply if it is shown that either:
(a) the cultural items were exported from Iraq prior to 6 August 1990; or
(b) the cultural items are being returned to Iraqi institutions in accordance with the objective of safe return as set out in paragraph 7 of UNSC Resolution 1483 (2003).
Article 4
1. All funds and economic resources located outside Iraq on or after 22 May 2003 of the previous Government of Iraq, or of any of the public bodies, corporations, including companies established under private law in which the public authorities have a majority stake, and agencies of that Republic, identified by the Sanctions Committee and listed in Annex III, shall be frozen.
2. All funds and economic resources belonging to, or owned or held by the following persons, identified by the Sanctions Committee and listed in Annex IV, shall be frozen:
(a) former President Saddam Hussein;
(b) senior officials of his regime;
(c) immediate members of their families; or
(d) legal persons, bodies or entities owned or controlled directly or indirectly by the persons referred to in subparagraphs (a), (b) and (c) or by any natural or legal person acting on their behalf or at their direction.
3. No funds shall be made available, directly or indirectly, to, or for the benefit of, a natural or legal person, body or entity listed in Annexes III and IV.
4. No economic resources shall be made available, directly or indirectly, to, or for the benefit of, a natural or legal person, body or entity listed in Annexes III and IV, so as to enable that person, group or entity to obtain funds, goods or services.
Article 5
1. The crediting of frozen accounts shall be allowed on the condition that any additions shall be frozen.
2. This Regulation shall not require the freezing of a transfer of funds to a beneficiary in the Community by or through an Iraqi bank meeting the conditions of Article 4(1), if such transfer constitutes a payment for goods and services ordered by customers of that bank. It shall not restrict the validity and use of the guarantees and letters of credit issued by Iraqi banks meeting the conditions of Article 4(1), at the request of their customers, with a view to payment for goods or services which such customers concerned have ordered in the Community.
Article 6
Funds, economic resources and proceeds of economic resources frozen pursuant to Article 4 shall only be unfrozen for the purpose of their transfer to the Development Fund for Iraq held by the Central Bank of Iraq, under the conditions set out in UNSC Resolution 1483 (2003).
Article 7
1. The participation, knowingly and intentionally, in activities, the object or effect of which is, directly or indirectly, to circumvent Article 4 or to promote the transactions referred to in Articles 2 and 3, shall be prohibited.
2. Any information that the provisions of this Regulation are being, or have been, circumvented shall be notified to the competent authorities of the Member States, as listed in Annex V, and, directly or through these competent authorities, to the Commission.
Article 8
1. Without prejudice to the applicable rules concerning reporting, confidentiality and professional secrecy and to the provisions of Article 284 of the Treaty, natural and legal persons, entities and bodies shall:
(a) provide immediately any information which would facilitate compliance with this Regulation, such as accounts and amounts frozen in accordance with Article 4, to the competent authorities of the Member States listed in Annex V where they are resident or located, and, directly or through these competent authorities, to the Commission;
(b) cooperate with the competent authorities listed in Annex V in any verification of this information.
2. Any information provided or received in accordance with this Article shall be used only for the purposes for which it was provided or received.
3. Any additional information directly received by the Commission shall be made available to the competent authorities of the Member States concerned.
Article 9
The freezing of funds and economic resources, carried out in good faith 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 implementing it, or its directors or employees, unless it is proved that the funds and economic resources were frozen as result of negligence.
Article 10
1. The following shall be immune from legal proceedings and shall not be subjected to any form of attachment, garnishment or execution:
(a) petroleum, petroleum products and natural gas originating in Iraq, until title to such goods has been passed to a purchaser;
(b) proceeds and obligations arising from the sale of petroleum, petroleum products and natural gas originating in Iraq, including payments for such goods deposited into the Development Fund for Iraq held by the Central Bank of Iraq;
(c) funds and economic resources frozen pursuant to Article 4;
(d) the Development Fund for Iraq held by the Central Bank of Iraq.
2. By way of derogation from paragraph 1, the proceeds and obligations arising from the sale of petroleum, petroleum products and natural gas originating in Iraq, and the Development Fund for Iraq shall not be immune from claims made on the basis of Iraq's liability for damages in connection with any ecological accident occurring after 22 May 2003.
Article 11
The Commission shall be empowered to:
(a) amend Annex II as necessary;
(b) amend or supplement Annexes III and IV on the basis of determinations made by either the United Nations Security Council or the Sanctions Committee; and
(c) amend Annex V on the basis of information supplied by Member States.
Article 12
Without prejudice to the rights and obligations of the Member States under the Charter of the United Nations, the Commission shall maintain all necessary contacts with the Sanctions Committee for the purpose of the effective implementation of this Regulation.
Article 13
The Commission and the Member States shall immediately inform each other of any measures taken pursuant to this Regulation. They shall supply each other with relevant information at their disposal in connection with this Regulation, in particular information received in accordance with Article 8 and information relating to breaches of the provisions of this Regulation, enforcement problems and judgements handed down by national courts.
Article 14
This Regulation shall apply notwithstanding any rights conferred or obligations imposed by any international agreement signed or any contract entered into or any licence or permit granted before the entry into force of this Regulation.
Article 15
1. The Member States shall lay down the rules on sanctions applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The sanctions provided for must be effective, proportionate and dissuasive.
2. Pending the adoption, where necessary, of any legislation to that end, the sanctions to be imposed where the provisions of this Regulation are infringed shall, where relevant, be those determined by the Member States in order to give effect to Article 7(3) of Regulation (EC) No 2465/96.
3. Each Member State shall be responsible for bringing proceedings against any natural or legal person, group or entity under its jurisdiction, in cases of breach of any of the restrictive measures laid down in this Regulation by any such person, group or entity.
Article 16
This Regulation shall apply:
(a) within the territory of the Community, including its airspace;
(b) on board any aircraft or any vessel under the jurisdiction of a Member State;
(c) to any person elsewhere who is a national of a Member State;
(d) to any legal person, group or entity which is incorporated or constituted under the law of a Member State;
(e) to any legal person, group or entity doing business within the Community.
Article 17
Regulation (EC) No 2465/96 is hereby repealed.
Article 18
1. This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.
2. Save for Articles 4 and 6, it shall apply from 23 May 2003.
3. Article 10 shall apply until 31 December 2007.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 7 July 2003.