1996R2271 — EN — 29.11.1996 — 000.001 — 1
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►B COUNCILREGULATION(EC)No2271/96
of22November1996
protecting against the effects of the extra-territorial application of legislation adopted by a third
country,andactionsbasedthereonorresultingtherefrom
(OJ L 309, 29.11.1996, p. 1)
Corrected by:
►C1Corrigendum, OJ L 179, 8.7.1997, p. 10 (2271/96)
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COUNCILREGULATION(EC)No2271/96
of22November1996
protecting against the effects of the extra-territorial application of
legislation adopted by a third country, and actions based thereon
orresultingtherefrom
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, andin 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 aboli-
tion 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 ondirect investment — including investment in real estate — establish-ment, the provision of financial services or the admission of securitiesto capital markets;
Whereas a third country has enacted certain laws, regulations, and
other legislative instruments which purport to regulate activities ofnatural 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 theattainment of the aforementioned objectives;
Whereas such laws, including regulations and other legislative instru-
ments, and actions based thereon or 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 legalpersons exercising rights under the Treaty establishing the EuropeanCommunity;
Whereas, under these exceptional circumstances, it is necessary to take
action at Community level to protect the established legal order, theinterests of the Community and the interests of the said natural andlegal 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 basedthereon, 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 theMember 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 235,1996R2271 — EN — 29.11.1996 — 000.001 — 2
(1) Opinion delivered on 25 October 1996 (OJ No C 347, 18. 11. 1996).
(2) See page 7 of this Official Journal.
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HAS ADOPTED THIS REGULATION:
Article 1
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 appli-cation affects the interests of persons, referred to in Article 11,engaging in international trade and/or the movement of capital andrelated commercial activities between the Community and third coun-
tries.
Acting in accordance with the relevant provisions of the Treaty and
notwithstanding the provisions of Article 7 (c), the Council may addor delete laws to or from the Annex to this Regulation.
Article 2
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 fromthe date on which it obtained such information; insofar as the interestsof a legal person are affected, this obligation applies to the directors,managers and other persons with management responsibilities(
1).
At the request of the Commission, such person shall provide all infor-
mation relevant for the purposes of this Regulation in accordance withthe request from the Commission within 30 days from the date of therequest.
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 MemberStates in which the person who gave the information is resident orincorporated.
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 professionalsecrecy. It shall not be disclosed by the Commission without theexpress permission of the person providing it.
Communication of such information shall be permitted where the
Commission is obliged or authorized to do so, in particular in connec-
tion with legal proceedings. Such communication must take into
account the legitimate interests of the person concerned that his or herbusiness 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 infor-
mation shall be entitled to obtain that it be deleted, disregarded orrectified, as the case may be.
Article 4
No judgment of a court or tribunal and no decision of an administrative
authority located outside the Community giving effect, directly or1996R2271 — EN — 29.11.1996 — 000.001 — 3
(1) Information should be supplied to the following address: European Commis-
sion, Directorate General I, Rue de la Loi/Wetstraat 200, B — 1049
Brussels (fax (32-2) 295 65 05).
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indirectly, to the laws specified in the Annex or to actions based
thereon or resulting there from, shall be recognized or be enforceablein any manner.
Article 5
No person referred to in Article 11 shall comply, whether directly or
through a subsidiary or other intermediary person, actively or by delib-
erate omission, with any requirement or prohibition, including requestsof foreign courts, based on or resulting, directly or indirectly, from thelaws specified in the Annex or from actions based thereon or resultingtherefrom.
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 theCommunity. 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 causeserious damage to a natural or legal person, the Commission shallexpeditiously submit to the committee referred to in Article 8 a draftof the appropriate measures to be taken under the terms of the Regula-
tion.
Article 6
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 thelaws specified in the Annex or by actions based thereon or resultingtherefrom.
Such recovery may be obtained from the natural or legal person or any
other entity causing the damages or from any person acting on itsbehalf or intermediary.
The Brussels Convention of 27 September 1968 on jurisdiction and the
enforcement of judgments in civil and commercial matters shall applyto proceedings brought and judgments given under this Article.Recovery may be obtained on the basis of the provisions of Sections2 to 6 of Title II of that Convention, as well as, in accordance with
Article 57 (3) of that Convention, through judicial proceedings insti-
tuted 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 saleof assets held by those persons, entities, persons acting on their behalfor intermediaries within the Community, including shares held in alegal person incorporated within the Community.
Article 7
For the implementation of this Regulation the Commission shall:
(a) inform the European Parliament and the Council immediately and
fully of the effects of the laws, regulations and other legislativeinstruments and ensuing actions mentioned in Article 1, on thebasis of the information obtained under this Regulation, and makeregularly 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 limitswhich have to be complied with by the persons which are to besubject of an authorization;
(c) add or delete, where appropriate, references to regulations or other
legislative instruments deriving from the laws specified in theAnnex, and falling under the scope of this Regulation;1996R2271 — EN — 29.11.1996 — 000.001 — 4
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(d) publish a notice in the Official Journal of the European Commu-
nitieson 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.
Article 8
For the purposes of the implementation of Article 7 (b) and (c), the
Commission shall be assisted by a Committee composed of the repre-sentatives of the Member States and chaired by the representative ofthe Commission.
The representative of the Commission shall submit to the committee a
draft of the measures to be taken. The committee shall deliver itsopinion on the draft within a time limit which the chairman may laydown 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 aproposal from the Commission. The votes of the representatives of theMember States within the committee shall be weighted in the mannerset 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, withoutdelay, submit to the Council a proposal relating to the measures to betaken. 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 beadopted by the Commission.
Article 9
Each Member State shall determine the sanctions to be imposed in the
event of breach of any relevant provisions of this Regulation. Suchsanctions must be effective, proportional and dissuasive.
Article 10
The Commission and the Member States shall inform each other of the
measures taken under this Regulation and of all other relevant informa-
tion pertaining to this Regulation.
Article 11
This Regulation shall apply to:
1. any natural person being a resident in the Community(
1) and a
national of a Member State,
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(
2),
4. any other natural person being a resident in the Community, unless
that person is in the country of which he is a national,1996R2271 — EN — 29.11.1996 — 000.001 — 5
(1) 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.
(2) 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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5. any other natural person within the Community, including its terri-
torial waters and air space and in any aircraft or on any vessel underthe jurisdiction or control of a Member State, acting in a profes-
sional capacity.
Article 12
This Regulation shall enter into force on the day of its publication in
theOfficial Journal of the European Communities .
This Regulation shall be binding in its entirety and directly applicable
in all Member States.1996R2271 — EN — 29.11.1996 — 000.001 — 6
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ANNEX
LAWS, REGULATIONS AND OTHER LEGISLATIVE INSTRU-
MENTS(1)
referred to in Article 1
COUNTRY: UNITED STATES OF AMERICA
ACTS
1.‘National Defense Authorization Act for Fiscal Year 1993’, Title XVII
‘CubanDemocracyAct1992’,sections1704and1706
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.‘CubanLibertyandDemocratic SolidarityActof1996’
Title IRequired 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, manage-
ment 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/deci-
sions 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.
3.‘IranandLibyaSanctionsActof1996’
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 developtheir p etroleum
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.)1996R2271 — EN — 29.11.1996 — 000.001 — 7
(1) 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 Loi/
Wetstraat 200, B-1049 Brussels (fax: (32-2) 295 65 05).
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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(1).
Possible damages to EU interests:
Measures taken by the US President to limit imports into USA or procure-
ment 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
►C11.31 CFR ◄(Code of Federal Regulations) Ch. V (7-1-95 edition)
Part515—CubanAssetsControlRegulations,subpartB(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 Demo-
cratic 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.1996R2271 — EN — 29.11.1996 — 000.001 — 8
(1) See Community implementation of those Resolutions through Council Regulation (EC)
No 3274/93 (OJ No L 295, 30. 11. 1993, p. 1).