Council Regulation (EC) No 1295/98 of 22 June 1998 concerning the freezing of funds held abroad by the Governments of the Federal Republic of Yugoslavia and the Republic of Serbia
Date: 1998-06-22
Institutions: Council of the European Union
Subjects: Yugoslavia, bank deposit, economic sanctions, international sanctions, repatriation of capital

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Official Journal of the European Communities

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COUNCIL REGULATION (EC) No 1295/98

of 22 June 1998

concerning the freezing of funds held abroad by the Governments of the Federal
Republic of Yugoslavia and the Republic of Serbia

THE COUNCIL OF THE EUROPEAN UNION,

HAS ADOPTED THIS REGULATION:

Having regard to the Treaty establishing the European
Community, and in particular Articles 73g and 228a,

Article 1

Having regard to Common Position 98/326/CFSP of 7
May 1998 defined by the Council on the basis of Article
J.2 of the Treaty on European Union concerning the
freezing of funds held abroad by the Federal Republic of
Yugoslavia (FRY) and Serbian Governments (1),

Having regard to the proposal from the Commission,

the said common position provides

Whereas
for a
freezing of funds held abroad by the Governments of the
Federal Republic of Yugoslavia and the Republic of
Serbia;

Whereas this measure falls within 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 this measure, 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 circumvention of this Regulation, notably by
entities owned by the said governments should be coun-
tered with an adequate system of information and, where
appropriate, consideration of appropriate remedial meas-
ures, including additional Community legislation;

Whereas competent authorities of
the Member States
should, where necessary, be empowered to ensure compli-
ance 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,

(1) OJ L 143, 14. 5. 1998, p. 1.

For the purpose of this Regulation:

1.

2.

3.

4.

‘Government of the Federal Republic of Yugoslavia'
means: the Government of the Federal Republic of
Yugoslavia, including the public administrations and
agencies at the federal level.

‘Government of the Republic of Serbia' means: the
Government of the Republic of Serbia, including the
public administrations and agencies at
the central
government level in the Republic of Serbia.

‘Funds' means: funds of any kind, including interest,
dividends or other value accruing to or from any such
funds.

‘Freezing of funds' means: preventing any change in
volume, amount, location, ownership, possession, char-
acter, destination or other change that would enable
the use of the funds concerned.

Article 2

Except as permitted by Article 3:

1. all

funds held outside the territory of

the Federal
Republic of Yugoslavia and belonging to the Govern-
ment of the Federal Republic of Yugoslavia and/or to
the Government of the Republic of Serbia shall be
frozen.

2. No funds shall be made available, directly or indirectly,
to or for the benefit of, either or both, those Govern-
ments.

Article 3

Article 2 shall not apply to funds exclusively used for the
following purposes:

(a) payment for current expenses, including salaries of
local staff, embassies, consular posts or diplomatic
missions of the Government of the Federal Republic
of Yugoslavia and/or the Government of the Republic
of Serbia within the Community;

(b) transfer from the Community to natural persons res-
ident in the Federal Republic of Yugoslavia of social
security or pension payments as well as the transfer of
other payments to protect entitlements in the area of
social insurance;

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(c) payments for democratisation projects or human-
itarian activities
the European
carried out by
Community and or the Member States, including the
implementation of
the Education Agreement of
September 1996, signed by President Milosevic and
the leader of
the ethnic Albanian community Dr
Ibrahim Rugova;

(d) payments of debts incurred with the Federal Republic
of Yugoslavia and Serbian Governments before the
entry into force of this Regulation, on the condition
that these payments are made into accounts held by
those Governments with banks or financial institu-
tions within the Community;

(e) payments for essential transit services provided by the
Federal Republic of Yugoslavia and Serbian Govern-
ments, on the condition that
the supply of such
services takens place at the usual rates.

Article 4

1.
The participation, knowingly and intentionally in
related activities, the object or effect of which is, directly
or indirectly, to circumvent the provisions of Articles 2
and 4 shall be prohibited.

prejudice

the Community

2. Without
rules
to
concerning 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.

3. Any information that the provisions of Article 2 are
being, or have been circumvented shall be notified to the
competent authorities of the Member States and/or the
Commission as listed in Annex.

information supplied by the Member States, to amend the
Annex.

Article 6

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 7

The Commission and the Member States shall inform
each other of the measures taken under this Regulation
and supply each other with the relevant information at
their disposal
in connection with this Regulation,
including information received in accordance with Article
4(3), such as breaches and enforcement problems, judg-
ments handed down by national courts or decisions of
relevant international forums.

Article 8

This Regulation shall apply:

(cid:190) within the territory of the Community including its

airspace,

(cid:190) on board any aircraft or any vessel under the jurisdic-

tion of a Member State,

(cid:190) to any person elsewhere who is a natioanl of a

Member State,

(cid:190) to any body which is incorporated or constituted

under the law of a Member State.

Article 5

For the purposes of implementing this Regulation, the
Commission shall be empowered, on the basis of the

This Regulation shall enter into force on the day of its
publication in the Official Journal of the European
Communities.

Article 9

This Regulation shall be binding in its entirety and directly applicable in all Member
States.

Done at Luxembourg, 22 June 1998.

For the Council

The President

J. BATTLE

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ANNEX

List of names and addresses of the competent authorities/services or coordinating service/authority of
the Commission and Member States as referred to in Article 4.