COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 22.04.1998 
COM(1998) 250 final 
Proposal for a 
COUNCIL REGULATION (EC) 
concerning the reduction of certain economic relations with the 
Federal Republic of Yugoslavia 
(presented by the Commission) 

•XPEANATORY MEMORANDUM 
In view of the serious developments in the Federal Republic of Yugoslavia (FRY) regarding 
Kosovo, the Council of the European Union adopted on 19 March 1998 Common Position 
98/240/CFSI\ which, inter alia, provides for action by the Community with a view to 
reducing certain economic relations with the FRY or the Republic of Serbia. This Community 
action requires Community legislation on the basis of a proposal of the Commission. The 
present Commission proposal will enable the Council to adopt the appropriate Regulation. 
The Commission has taken fully into account the serious threat to the regional peace posed 
by the behaviour of the governments of the FRY and Serbia, and, therefore, proposes a 
Community legislation which gives, within the boundaries of international law, an extensive 
interpretation to the restrictions contained in the Common Position. 
This broad approach is reflected in the provisions regarding the persons and bodies adressed 
by the Regulation (Article 5) and the types of prohibited government support in relation to 
export credit for trade with or investment in the Republic of Serbia. Hie same approach is 
taken in respect of the sale or supply to the FRY of equipment for internal repression and 
terrorism. For reasons of time constraints this proposal contains only a limited list of such 
equipment. However the use of the already existing mechanism contained in Article 2 for 
revising and/or supplementing the list will enable the Community to reach quick decisions in 
that respect. A more lengthy decision making procedure would leave the FRY too much time 
to acquire the equipment which should be added to the list. By providing in Article 1 a) and 1 
d) that not only direct but also indirect supply or sale of the said equipment to the FRY as well 
as supporting activities shall be prohibited, the competent national authorities of the Member 
States will be in a better legal position to deal with possible efforts to circumvent the 
sanctions. 
The provisions on supply or sale to the FRY do not apply to existing contracts or transactions 
of which the execution has already started (Article 1 b). Similarly, the prohibition to provide 
or use government financing for privatisations in the Republic of Serbia does not apply to 
such financing for which legally binding commitment have already been undertaken (Article 1 
c). 
Provisions regarding the need for mutual information by Commission and Member States or 
imposing sanctions on violations of the Regulation (Articles 3 and 4) will make a necessary 
contribution to the effectiveness of the Regulation. 
Council Regulation (EC) No ..../98 
of.... 1998 
concerning the reduction of certain economic relations with the 
Federal Republic of Yugoslavia 
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 98/240/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 ', 
Having regard to the proposal from the Commission, 
Whereas the said Common Position provides for restrictive measures against the Federal 
Republic of Yugoslavia, including an action by the Community for the reduction of certain 
economic relations; 
Whereas certain of these measures fall under the competence of 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 ; 
Whereas lor reasons of expediency the Commission should be empowered to supplement 
and/or amend, if necessary, the list of equipment for internal repression or terrorism in 
accordance with the provisions of Regulation (EEC) No 2603/69, in particular its Articles 3, 4 
and 9; 
OJL95, 27.3.98, p. 1 
2 
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 ; 
HAS ADOPTED THIS REGUEATION 
Article 1 
The following shall be prohibited : 
a) the supply or sale, directly or indirectly, to the Federal Republic of Yugoslavia (Serbia and 
Montenegro) of the equipment contained in the Annex to this Regulation ; 
b) the provision and/or use of government and/or other official financial support, insurance 
and/or guarantees in respect of new export credit for trade or investment in the Republic of 
Serbia or in relation with renewal or extension of existing export credit, if the execution of 
the contract or transaction for which the export credit has been provided has not yet been 
started; 
c) the provision or use of government and/or other official financing for privatisations in the 
Republic of Serbia in respect of which no legally binding commitments have been 
undertaken so far; 
d) any activity the object or effect of which is, directly or indirectly, to promote the 
transactions or activities referred to in this Article. 
Article 2 
The Commission is hereby empowered to supplement and/or amend the Annex in accordance 
with the provisions of Regulation (EEC) No 2603/69, notably its Articles 3, 4 and 9. 
Such supplements and/or amendments shall be published in the Official Journal of the 
European Communities. 
<f 
Article 3 
Each Member State shall determine the sanctions to be imposed where the provisions of this 
Regulation are infringed. 
Article 4 
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 5 
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 State. 
Article 6 
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.... 
For the Council 
The President 
ANNEX 
Equipment for internal repression or terrorism, envisaged by Article 1 a) 
Crime control and detection equipment (e.g.) 
handcuffs 
leg irons 
shackles 
stun guns 
lasers 
shock batons 
immobilization guns 
police helmets and shields 
fingerprint equipment 
Power controlled searchlights 
Military construction equipment 
Components and parts for ammunition 
Bayonets 
Muzzle loading block firearms (made after 1890) 
Military helmets 
Bullet proof vests 
Equipment to make shotguns 
Ammunition hand loading equipment 
Communications intercept devices 
Solid State optical detractors 
Image intensifier tube 
Focal plane arrays 
Direct view imaging equipment (visible or infrared) 
Image intensifier cameras 
Focal plane array cameras 
Sensor related software 
Sensor related technology 
Launch, support equipment 
Demilitarized Military aircraft 
Shotguns 
Shotgun shells 
é 
ISSN 0254-1475 
COM(98) 250 final 
DOCUMENTS 
EN 10 11 09 02 
Catalogue number : CB-CO-98-270-EN-C 
ISBN 92-78-35330-2 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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