Proposal for a Council Regulation (EC) concerning the prohibition of new investments in the Republic of Serbia
Date: 1998-06-24
Institutions: European Commission
Subjects: Kosovo, Serbia, economic sanctions, international sanctions, regulation of investments

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. 

;  O IL  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. 

This Regulation shall apply : 

Article 9 

-  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 

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