Proposal for a COUNCIL REGULATION (EEC) prohibiting the satisfying of claims with regard to contracts and transactions the performance of which as affected by the United Nations Security Council Resolution 757 (1992) and related resolutions
Date: 1993-06-22
Institutions: European Commission
Subjects: UN resolution, Yugoslavia, contract, financial transaction, guarantee, trade restriction

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0MC93) 283 final 

Brussels, 22 June 1993 

Proposal  for a 

IL REGULATION  (EEC) 
prohibiting the satisfying of claims with regard to contracts and 

transactions  the performance of which was affected by the United 

Nations Security Council Resolution  757(1992) and related  resolutions 

(presented  by  the  Commission) 

EXPLANATORY MEMORANDUM 

1.  The Security Council of the United Nations adopted Resolution 

757(1992),  imposing an embargo on the Federal Republic of Yugoslavia 

(Serbia and Montenegro). 

Paragraph 9 of this Resolution states  "that all States, and the 

authorities  in the Federal Republic of Yugoslavia  (Serbia and 

Montenegro), shall take the necessary measures to ensure that no 

claim shall lie at the instance of the authorities  in the Federal 

Republic of Yugoslavia  (Serbia and Montenegro), or of any person or 

body in the Federal Republic of Yugoslavia  (Serbia and Montenegro), 

or of any person claiming through or for the benefit of any such 

person or body, in connection with any contract or other transaction 

where its performance was affected by reason of the measures  imposed 

by this resolution and related resolutions". 

2.  The formulation of paragraph 9 of UNSC Resolution 757(1992) follows, 

mutatis mutandis, the formulation of paragraph 29 of UNSC Resolution 

687(1991), dealing with such claims by Iraq. 

3.  The Community has implemented paragraph 29 of UNSC Resolution 

687(1991), by adopting Council Regulation  (EEC) No 3541/92 of 7 

December 1992. 

4.  The present proposal  for a Council Regulation aims at  implementing 

paragraph 9 of UNSC Resolution 757(1992), and given the 

abovementioned similarity between paragraphs 29 and 9 of the 

respective UNSC Resolutions, the present proposal  follows, mutatis 

mutandis, the formulation of Council Regulation  (EEC) 3541/92. 

J. 

PROPOSAL  for  a 

COUNCIL  REGULATION  (EEC)  N° 

prohibiting  the  satisfying  of  claims  with  regard  to  contracts  and 

transactions  the performance  of  which  was  affected  by  the  United 

Nations  Security  Council  Resolution  757(1992)  and  related  resolutions 

THE  COUNCIL  OF  THE  EUROPEAN  COMMUNITIES, 

Whereas,  under  Regulation  (EEC) N°  1432/92 (D , No  2656/92<2)  and  No. 

990/93 (3), the  Community  has  taken measures  to prevent  trade  between  the 

Community  and  the  Federal  Republic  of  Yugoslavia  (Serbia  and  Montenegro); 

Whereas,  as  a  consequence  of  the  embargo  against  the  Federal  Republic  of 

Yugoslavia  (Serbia  and  Montenegro),  economic  operators  in  the  Community 

and  third  countries  are  exposed  to  the  risk  of  claims  by  the  Federal 

Republic  of  Yugoslavia  (Serbia  and  Montenegro); 

Whereas  the  United  Nations  Security  Council  has  adopted  Resolution 

757(1992)  of  30 May  1992  which,  in  its paragraph  9, deals  with  claims  by 

the  Federal  Republic  of  Yugoslavia  (Serbia  and Montenegro)  in relation  to 

contracts  and  transactions  the performance  of  which  was  affected  by 

* 

measures  imposed  by  the  Security  Council  pursuant  to  Resolution  757(1992) 

and  related  resolutions; 

(1) OJ  No  L  151  of  3.6.1992,  p.  1,  repealed  by  Regulation  (EEC)  No.990/93 

of  28.04.1993 

(2) OJ  L  266  of  12.9.1992, p.  27, repealed  by  Regulation  (EEC) No. r390/S'3 

du  28.04 .1993 

(3) OJ  L  No.  102  of  28.04.93, p.  14 

Whereas it is necessary to protect operators permanently against  such 

claims and to prevent the Federal Republic of Yugoslavia  (Serbia and 

Montenegro) from obtaining compensation for the negative effects of the 

embargo; 

Whereas the Community and its Member States meeting  in Political 

Cooperation have agreed that the Federal Republic of Yugoslavia  (Serbia 

and Montenegro) must comply in full with the provisions of paragraph 9 of 

United Nations Security Council Resolution 757(1992) and consider that, 

in deciding whether to reduce or lift measures taken against the Federal 

Republic of Yugoslavia  (Serbia and Montenegro), pursuant to paragraph 31 

of Security Council Resolution  820(1993), particular account must be 

taken of any failure by the Federal Republic of Yugoslavia  (Serbia and 

Montenegro) to comply with paragraph 9 of the Resolution 757(1992); 

Whereas the Community and its Member States meeting  in Political 

Cooperation have agreed to resort to a Community  instrument  in order to 

ensure uniform  implementation, throughout  the Community, of paragraph 9 

of United Nations Security Council Resolution  757(1992); 

Whereas such uniform  implementation is essential for achieving the aims 

of the Treaty establishing the European Economic Community and in 

particular  for avoiding distortion of competition; 

Whereas the Treaty does not provide, for the adoption of this Regulation, 

powers other than those of Article 235, 

Having regard to the Treaty establishing the European Economic Community, 

and in particular Article 235 thereof, 

Having regard to the proposal  from the Commission, 

Having regard to the opinion of the European Parliament^4^ 

HAS ADOPTED THIS REGULATION 

!4) Opinion delivered on 

- 4 -

Article 1 

For the purposes of this Regulation : 

1.  'contract or transaction1  means any transaction of whatever form and 

whatever the applicable  law, whether comprising one or more contracts 

or similar obligations made between the same or different parties; 

for this purpose  'contract' includes a bond, financial guarantee and 

indemnity or credit whether legally independent or not and any 

related provision arising under or in connection with the 

transaction; 

2.  'claim' means any claim, whether asserted by legal proceedings or 

not, made before or after the date of entry into force of this 

Regulation, under or in connection with a contract or transaction, 

and in particular  includes : 

(a) a claim for performance of any obligation arising under or in 

connection with a contract or transaction; 

(b) a claim for extension or payment of a bond, financial guarantee or 

indemnity of whatever form; 

(c) a claim for compensation in respect of a contract or transaction; 

(d) a counterclaim 

(e) a claim for the recognition or enforcement, including by the 

procedure of exequatur, of a judgement, an arbitration award or an 

equivalent decision, wherever made or given; 

3.  'measures decided on pursuant to United Nations Security Council 

Resolution 757(1992) and related resolutions»  means measures of the 

United Nations Security Council or measures introduced by the 

European Communities or any State, country or  international 

organization  in conformity with, as required by, or in connection 

with the implementation of relevant decisions of the United Nations 

Security Council, or any action including any military action, 

authorized by the United Nations Security Council, in respect of the 

embargo of the Federal Republic of Yugoslavia  (Serbia and 

Montenegro); 

4.  'person or body in the Federal Republic of Yugoslavia  (Serbia and 

Montenegro) means : 

- 5 -

(a) the state of the Federal Republic of Yugoslavia  (Serbia and 

Montenegro) or any public authority thereof ; 

(b) any person in, or resident  in the Federal Republic of Yugoslavia 

(Serbia and Montenegro); 

(c) any body having its registered office or headquarters  in the Federal 

Republic of Yugoslavia  (Serbia and Montenegro) 

(d) any body controlled, directly or indirectly, by one or more of the 

abovementioned persons or bodies. 

Without prejudice to Article 2, performance of a contract or transaction 

shall also be regarded as having been affected by the measures decided on 

pursuant  to United Nations Security Council Resolution 757(1992) and 

related resolutions where the existence or content of the claim results 

directly or indirectly from those measures. 

Article 2 

1.  It shall be prohibited to satisfy or to take any step to satisfy a 

claim made by : 

(a) a person or body in the Federal Republic of Yugoslavia  (Serbia and 

Montenegro) or acting through a person or body in the Federal 

Republic of Yugoslavia  (Serbia and Montenegro); 

(b) any person or body acting, directly or indirectly, on behalf of or 

for the benefit of one or more persons or bodies  in the Federal 

Republic of Yugoslavia  (Serbia and Montenegro); 

(c) any person or body taking advantage of a transfer or rights of, or 

otherwise claiming through or under, one or more persons or bodies in 

the Federal Republic of Yugoslavia  (Serbia and Montenegro); 

(d)  any  other  person  or  body  referred  to  in paragraph  9 of  United  Nations 

Security  Council  Resolution  757/(1992); 

(e) any  person  or  body making  a claim  arising  from  or  in connection  with 

the payment  of  a bond  or  financial  guarantee  or  indemnity  to  one  or 

more  of  the  abovementioned  persons  or bodies, 

under  or  in connection  with  a  contract  or  transaction  the  performance  of 

which  was  affected,  directly  or  indirectly,  wholly  or  in part, by  the 

measures  decided  on pursuant  to United  Nations  Security  Council 

Resolution  757(1992)  and  related  resolutions. 

2.  This  prohibition  shall  apply  within  the  Community  and  to  any  national 

of  a Member  State  and  any body  which  is  incorporated  or  constituted 

under  the  law  of  a Member  State. 

Article  3 

Without  prejudice  to  the measures  decided  on  pursuant  to United  Nations 

Security  Council  Resolution  757(1992)  and  related  resolutions, Article  2 

shall  not  apply  : 

(a) to  claims  relating  to  contracts  or  transactions,  with  the  exception 

of  any bond,  financial  guarantee  or  indemnity,  in  respect  of  which 

the  persons  or bodies  referred  to  in the  said Article  prove  to  a 

court  in a Member  State  that  the  claim  was  accepted  by  the  parties 

prior  to  the  adoption  of  the measures  decided  on pursuant  to  United 

Nations  Security  Council  Resolution  757(1992)  and  related 

resolutions,  and  that  those  measures  have  had  no  effect  on  the 

existence  or  content  of  the  claim; 

(b) to  claims  for payment  under  an  insurance  contract  in  respect  of  an 

event  occurring  prior  to  the  adoption  of  the measures  referred  to  in 

Article  2  or  under  an  insurance  contract  where  such  insurance  is 

compulsory  under  the  law  of  a Member  State; 

7- 7 -

(c) to claims for payment of sums paid into an account payment  from which 

was blocked pursuant to the measures referred to in Article 2 

provided that such payment does not concern sums paid under bonds in 

respect of contracts referred to in the said Article; 

(d) to claims relating to contracts of employment  subject to the law of 

any Member State; 

(e) to claims for payment for goods which the persons or bodies referred 

to in Article 2 prove to a court in a Member State were exported 

prior to the adoption of the measures decided on pursuant to United 

Nations Security Council Resolution 757(1992) and related  resolutions 

and that those measures have had no effect on the existence or 

content of the claim; 

(f) to claims for sums which the persons or bodies referred to in Article 

2 prove to a court  in a Member State are due under any loan made 

prior to the adoption of the measures decided on on pursuant to 

United Nations Security Council Resolution 757(1992) and related 

resolutions and that those measures have had no effect on the 

existence or content of the claim, 

provided that the claim  includes no amount, by way of interest, charge or 

otherwise, to compensate  for the fact that performance was, as a result 

of those measures, not made  in accordance with the terms of the relevant 

contract or transaction. 

Article 4 

In any proceedings  for the enforcement of a claim, the onus of proving 

that satisfying the claim is not prohibited by Article 2 shall be on the 

person seeking the enforcement of that claim. 

Article 5 

Each Member State shall determine the sanctions to be imposed where the 

provisions of this Regulation are infringed. 

- 8 -

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 Brussels 

For the Council 

The President 

-  H-

ISSN 0254-1475 

COM(93) 283 final 

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