WRITTEN QUESTION E-1686/02

by Gerhard Schmid (PSE) to the Commission

(12 June 2002)

Subject: Freezing of accounts implementation

On 27 December 2001, Council Regulation (EC) No 2580/2001(1) on specific restrictive measures directed against certain persons and entities with a view to combating terrorism came into force.

How is this Regulation being implemented in the Member States?

How are the banks concerned being notified as to which accounts are to be frozen?

By what means are they notified?

(1) OJ L 344, 28.12.2001, p. 70.

Joint answerto Written Questions E-1685/02 and E-1686/02given by Mr Patten on behalf of the Commission

(9 July 2002)

Pursuant to Resolution 1373(2001) of the Security Council of the United Nations, the Council has adopted, on 27 December 2001, Common Position 2001/931/CFSP of 27 December 2001 on the application of specific measures to combat terrorism(1), Council Regulation (EC) No 2580/2001 of 27 December 2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism(3), and Council Decision 2001/927/EC of 27 December 2001 establishing the list provided for in Article 2(3) of Council Regulation (EC) No 2580/2001 on specific restrictive measures directed against certain persons and entities with a view to combating terrorism(4). These instruments foresee in particular the freezing of funds, other financial assets and economic resources of the persons, groups and entities listed by the Council.

On 2 May 2002, the Council has updated the lists of persons, groups and entities subject to these measures by means of Common Position 2002/340/CFSP(2) and Council Decision 2002/334/EC(5). The Council lists include identification data, but not numbers of bank accounts.

As a result, eight natural persons and twelve groups and entities are now subject to the freezing measures. Since up to now only two Member States have reported which amount (EUR 4500) has been frozen, the Commission does not have precise information about the impact of the measures laid down in Regulation (EC) No 2580/2002. It notes, however, that nearly all groups and entities were added on 2 May 2002 and that the eight persons have been indicted in the United States for terrorist acts in the Middle East and South East Asia.

The freezing order consists of two elements: freezing the accounts and economic resources of the listed persons, groups and entities, and a prohibition against making funds and economic resources available to them. As all economic operators in the Community and Union citizens who have relations with those on the list are required to withhold funds and economic resources, it is difficult to quantify the impact of that prohibition. Nevertheless, the impact of this prohibition on in particular listed groups and entities is most likely to be more important than the impact of the freezing of accounts they may have in the Community.

Council Regulation (EC) No 2580/2001 is directly applicable in all Member States. Accordingly, all economic operators in the Community and Union citizens have a statutory obligation to implement the freezing measure. They are required both to identify and freeze accounts belonging to listed persons, groups and entities, and to withhold whatever funds, other financial assets or economic resources they would owe to such persons, groups and entities. In accordance with Article 4 of Regulation (EC) No 2580/2001, they also have to provide the competent authorities with any information which would facilitate compliance with that Regulation.

It is up to the competent authorities to verify whether the Regulations are applied and to issue guidelines or instructions as to the modalities of applying these measures.

The Commission, for its part, is engaging in discussion with the European Banking Federation and other relevant associations, with a view to facilitating the execution of the freezing measures and finding solutions to application problems that arise.

The Regulation provides that the Member States have to determine the (administrative or criminal) penalties to be imposed where the provisions of the Regulation are infringed. It is also up to the Member States to take the necessary action to prosecute economic operators and citizens if infringements take place.

(1) OJ L 344, 28.12.2001.

(2) OJ L 116, 3.5.2002.

(3) OJ L 344, 28.12.2001.

(4) OJ L 344, 28.12.2001.

(5) OJ L 116, 3.5.2002.