COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 24.06.1998 
COM(1998) 393 final 
Proposal for a 
COUNCIL REGULATION (EC) 
concerning the prohibition of new investments in the Republic of Serbia 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
The present proposal of the Commission for a prohibition of new investment 
in the Republic of Serbia follows from the adoption by the Council of Common 
Position 98/374/CFSPdealing with the Kosovo situation, and the actions to be taken in 
this respect in order to obtain the fulfilment by the Governments of the Federal 
Republic of Yugoslavia and of Serbia of solving the Kosovo problem. 
Article 1 of the proposal provides a clear delimitation of the prohibition of 
new investment. 
Article 2 prohibits the circumvention of the prohibition-
Articles 3 and 4 deal with a procedure for exceptions which can not yet be 
foreseen and for consultation on the application of the Regulation. 
Articles 5-8 contain usual provisions regarding mutual information, sanctions 
to be imposed, and other measures ensuring full compliance with the Regulation. 
Article 9 specifies the persons addressed by and the territorial scope of the 
Regulation. 
Council Regulation (EC) No ... ./98 
of.... 1998 
concerning the prohibition of new investments in the Republic of Serbia 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular 
Articles 73g and 228a, 
Having regard to Common Position 98/ 374/CFSP defined by the Council on the basis 
of Article J.2 of the Treaty on European Union on restrictive measures against the 
Federal Republic of Yugoslavia and the Republic of Serbia1, 
Having regard to the proposal from the Commission, 
Whereas the said Common Position provides for a prohibition of new investments in 
the Republic of Serbia; 
Whereas this measure falls under the scope of the Treaty establishing the European 
Community; 
Whereas, therefore, and notably with a view to avoiding distortion of competition, 
Community legislation is necessary for the implementation of these measures, as far 
as the territory of the Community is concerned; whereas such territory is deemed to 
encompass, for the purposes of this Regulation, the territories of the Member States to 
which the Treaty establishing the European Community is applicable, under the 
conditions laid down in that Treaty; 
Whereas procedures should be provided to authorise certain activities, otherwise 
prohibited ; 
Whereas competent authorities of the Member States should, where necessary, be 
empowered to ensure compliance with this Regulation; 
Whereas there is a need for Commission and Member States to inform each other of 
the measures taken under this Regulation and of other relevant information at their 
disposal in connection with this Regulation; 
OJL 165/98, 10.6.1998, p. 1 
'Jb 
HAS ADOPTED THIS REGULATION : 
Article 1 
Without prejudice to the execution of contracts concluded before the entry into force 
of this Regulation, it shall be prohibited to obtain ownership or control, directly or 
indirectly, of any kind of asset in the Republic of Serbia, including: 
(i) an enterprise (being a legal person or any other entity constituted or organised 
under the applicable law of the Republic of Serbia, whether or not for profit, and 
whether private or government owned or controlled, including a corporation, trust, 
partnership, branch, joint venture, association or organisation); 
(ii) shares, stocks or forms of equity participation in an enterprise, and rights derived 
therefrom; 
(iii) bonds, debentures, loans and other forms of debt, and rights derived therefrom; 
(iv) rights under contracts, including turnkey, construction, management, production 
or revenue-sharing contracts; 
(v) claims to money and claims to performance; 
( vi) intellectual property rights; 
(vii) rights conferred pursuant to law or contract such as concessions, licenses, 
authorisations, and permits; 
( viii) any other tangible and intangible, movable and immovable property, and any 
related property rights, such as leases, mortgages, liens and pledges. 
Article 2 
The participation, knowingly and intentionally in related activities, the object or effect 
of which is, directly or indirectly, to circumvent the provisions of Article 1 shall be 
prohibited. 
Article 3 
In accordance with the provisions of Article 4 the Commission shall be empowered 
to. grant, on a case-by-case basis, authorisations for new investments in the Republic 
of Serbia, in particular for humanitarian reasons or for the protection of the interests 
of the Community. 
-> 
Article 4 
For the purposes of the implementation of Article 3, the Commission shall be assisted 
by the committee composed of the representatives of the Member States and chaired 
by the representative of the Commission, established under Council Regulation (EC) 
No. 2271/962, in accordance with the following provisions. 
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 one month from the date of referral to the Council, the 
Council has not acted, the proposed measures shall be adopted by the Commission. 
Article 5 
Each Member State shall determine the sanctions to be imposed where the provisions 
of this Regulation are infringed. Such sanctions must be effective, proportionate and 
dissuasive. 
Article 6 
Without prejudice to the EC rules of confidentiality, the competent authorities of the 
Member States shall have the power to require banks , other financial institutions and 
other bodies and persons to provide all relevant information necessary for ensuring 
compliance with this Regulation. 
; OIL 309, 29.11.1996. p. I 
H 
Article 7 
The Commission and the Member States shall inform each other of the measures 
taken under this Regulation and supply each other with other relevant information at 
their disposal in connection with this Regulation, such as breaches and enforcement 
problems, judgments handed down by national courts or decisions of relevant 
international fora. 
Article X 
The committee referred to in Article 4 of this Regulation may examine any question 
concerning the application of this Regulation, which may be raised either by the 
chairman or by a representative of a Member State. 
Article 9 
This Regulation shall apply : 
- within the territory of the Community including its airspace, 
- on board any aircraft or any vessel under the jurisdiction of a Member State, 
- to any person elsewhere who is a national of a Member State, 
- to any body which is incorporated or constituted under the law of a Member Slate. 
Article 10 
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. 
Iù>r the ( 'ouncil 
The President 
Done at.... 
h 
ISSN 0254-1475 
COM(98) 393 final 
DOCUMENTS 
EN 11 02 06 10 
Catalogue number : CB-CO-98-408-EN-C 
ISBN 92-78-37415-6 
Office for Official Publications of the Huropean Communities 
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