Proposal for a Council Regulation amending Council Regulation (EC) No 2465/96 concerning the interruption of economic and financial relations between the European Community and Iraq
Date: 2002-06-07
Institutions: European Commission
Subjects: EU relations, Iraq, UN resolution, economic relations, export licence, export restriction

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 07.06.2002
COM(2002) 296 final

Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 2465/96 concerning the interruption of economic
and financial relations between the European Community and Iraq

(presented by the Commission)

(1)

(2)

(3)

(4)

(5)

EXPLANATORY MEMORANDUM

Further to a number of Resolutions of the Security Council of the United Nations,
including in particular Resolutions 661(1990) and 986(1995), the Community has
interrupted most of its economic and financial relations with Iraq. The measures are
laid down in Council Regulation (EC) No 2465/96 and, as regards the financial
embargo, national legislation of the Member States.

On 14 May 2002, the Security Council adopted its Resolution 1409(2002), which
extends, for a period of 180 days beginning on 30 May 2002, the validity of inter alia
the substantive provisions of Resolution 986(1995). That Resolution established the
Oil for Food programme and made provision for an escrow account which is funded
by Iraq's exports of petroleum and petroleum products.

Resolution 1409(2002) contains new rules concerning the authorisation for exports of
civilian commodities and products to Iraq which are to be financed from that escrow
account. To that end, revised procedures were attached to the Resolution. These
revised procedures could be published in the Official Journal pursuant to Article 6 of
Council Regulation (EC) No 2465/96, when the Council has published the necessary
amendment to that Regulation.

The purpose of the revised procedures, which will be applied by the Office of the Iraq
Programme (OIP), is to determine whether an export transaction concerns any of the
commodities or products subject to special export restrictions. The OIP gives written
confirmation to the Member State concerned, if it has determined that the transaction
concerns neither commodities or products subject to the embargo on arms and military
commodities and products, nor commodities or products included in the revised Goods
Review List adopted by the Security Council. Resolution 1409(2002) allows states to
permit exports to Iraq for which such confirmation has been obtained. If such
confirmation is not obtained and the transaction concerns exports of commodities or
products included in the revised Goods Review List, the Committee established by
Resolution 661(1990) may decide to authorise the export transaction.

As Resolution 1409(2002) extends the validity of Resolution 986(1995) and creates an
additional exception to the export restrictions laid down in Resolution 661(1990), it is
without prejudice to the existing specific rules concerning exports of products
intended strictly for medical purposes, of foodstuffs, of materials and supplies for
essential civilian needs, and of parts and equipment essential for the safe operation of
the Kirkuk-Yumurtalik pipeline system in Iraq, as laid down in Resolutions
661(1990), 687(1991) and 986(1995). The new procedures for application of the
additional exception will, however, have to be followed, if payment from the escrow
account referred to above is requested for such exports.

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Proposal for a

COUNCIL REGULATION

amending Council Regulation (EC) No 2465/96 concerning the interruption of economic
and financial relations between the European Community and Iraq

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular
Articles 60 and 301 thereof,

Having regard to Common Position 2002/.../CFSP concerning .... 1,

Having regard to the proposal from the Commission2,

Whereas:

(1)

(2)

(3)

(4)

Council Regulation (EC) No 2465/96 concerning the interruption of economic and
financial relations between the European Community and Iraq 3 prohibits, with certain
exceptions, the export to Iraq of all commodities and products originating in, coming
from, or in transit through the Community. This export regime was imposed further to
Resolutions 661(1990), 687(1991) and 986(1995) of the Security Council of the
United Nations.

Pursuant to Resolution 986(1995) an escrow account has been established for the
financing of certain exports to Iraq. On 14 May 2002, the Security Council of the
United Nations adopted Resolution 1409(2002) laying down new procedures and rules
for approval of exports to Iraq which will be financed from this escrow account. These
procedures and rules shall be applicable as of 30 May 2002.

As a result exports for which an application for financing from the escrow account is
made will be checked against the list of military commodities and products and against
the revised Goods Review List (GRL) which the Security Council also adopted. The
GRL comprises goods, services and technologies which can be used for civil as well
as military purposes (dual-use goods).

If the exports are not included in these lists, the Office of the Iraq Programme (OIP)
will confirm in writing to the State that sent the application, that the application does
not contain any commodity or product included in these lists. If such confirmation is
obtained, the export is permitted and eligible for payment from the escrow account.
However, such payment is subject to meeting the conditions of paragraph 8(a) of
Resolution 986(1995), which provides that the export must be at the request of the

1

2

3

OJ L …, …, p. …
OJ C …, …, p. …
OJ L 337, 27.12.1996, p. 1.

3

(5)

(6)

(7)

(8)

(9)

(10)

Government of Iraq, that Iraq effectively guarantees equitable distribution of the
exported goods and that the Secretary-General receives authenticated confirmation
that the exported goods have arrived in Iraq.

If the exports are included in the list of military commodities and products or in the
revised Goods Review List,
the application will be referred to the Committee
established by Resolution 661(1990). The exports are not permitted, unless the
Committee gives its approval. In this regard, it should be noted that the Committee
may give its approval for exports of commodities and products included in the revised
Goods Review List, but will not approve exports of military commodities and
products.

Applications for financing of exports to Iraq from the escrow account have to be made
to Office of the Iraq Programme through the diplomatic missions of States and
international organisations accredited to the United Nations in the format prescribed
by the Security Council. That format should also be used for notifications to the
Committee established by Resolution 661(1990).

is appropriate that competent authorities

It
in the Community immediately
communicate to the person, entity or body at whose request the application was made,
any confirmation they receive from the Office of the Iraq Programme and any
approval they received from the said Committee. Such confirmation or authorisation
need not be duplicated by an export authorisation or licence as it
is constitutes
in breach of Council Regulation (EC)
sufficient evidence that the export
No 2465/96.

is not

Regulation (EC) No 2465/96 should be amended in order to reflect that exports are
allowed, if in accordance with the new procedures and rules it has been confirmed that
they are eligible for payment from the escrow account.

Experience with the application of Regulation (EC) No 2465/96 has shown that the
meaning of certain provisions of that Regulation should be clarified.

Persons, entities and bodies engaging in trade with Iraq should be protected against
Iraqi attempts to abuse export and import transactions to ends that are not compatible
with the Resolutions of the Security Council of the United Nations and in particular
pressure to deviate or depart from the provisions of contracts or agreements submitted
to the Office of the Iraq Programme. To that end, they should be required to inform the
competent authorities in the Community, if they are subject to such attempts or
pressure.

(11)

In order not to create legal uncertainty for Community exporters, this Regulation must
enter into force immediately,

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HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 2465/96 is amended as follows:

1.

Article 2 is replaced by the following:

"Article 2"

1.

"The prohibitions of points 1, 3 and 5 of Article 1 shall not apply to the introduction
into the territory of the Community of:

(a)

(b)

commodities or products which originate in or come from Iraq and were
exported before 7 August 1990;

petroleum and petroleum products originating in Iraq, on the condition that
there is evidence in writing that the Committee established by Resolution
661(1990) of the Security Council of the United Nations has given its approval
for the purchase of the commodities or products concerned, and provided that
payment of the full price is made to the escrow account established by the
Secretary General of the United Nations pursuant to Resolution 986(1995)."

2.

"The prohibitions of points 2, 3 and 5 of Article 1 shall not apply to the export from
or transit through the Community to Iraq of:

(a)

(b)

products intended strictly for medical purposes, on the condition that a
competent authority listed in Annex I has given an authorisation in writing;

foodstuffs, on the condition that a competent authority listed in Annex I has
confirmed in writing that
the export or transit has been notified to the
Committee established by Resolution 661(1990) of the Security Council of the
United Nations;

(c) materials and supplies for essential civilian needs, on the condition that a
competent authority listed in Annex I has confirmed in writing that the export
or transit has been approved by the said Committee;

(d)

(e)

parts and equipment which are essential for the safe operation of the Kirkuk-
Yumurtalik pipeline system in Iraq, on the condition that a competent authority
listed in Annex I has confirmed in writing that the export or transit has been
approved by the said Committee, and provided that the conditions for payment
determined by that Committee established under Security Council resolution
661(1990) are fulfilled;

any other commodity or product, on the condition that a competent authority
listed in Annex I has confirmed in writing that
the Office of the Iraq
Programme of the Secretariat-General of the United Nations has notified in
written form that the export of that commodity or product is eligible for
payment from the escrow account established by the Secretary General of the
United Nations pursuant to Resolution 986(1995);

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(f)

any other commodity or product for the export of which the said Committee
has given its approval."

3.

"The prohibitions of points 3, 4 and 5 of Article 1 shall not apply to:

1.

2.

3.

the provision of either postal and telecommunications services, medical
services necessary for the operation of existing hospitals, or of non-financial
services resulting from contracts or amendments to contracts concluded before
7 August 1990, where their execution began before that date;

flights approved by the said Committee or destined for activities of the United
Nations in Iraq, on the condition that a competent authority listed in Annex I
has confirmed in writing that the flight either has been approved by the said
Committee or is destined for activities of the United Nations in Iraq;

services, including financial transactions, ancillary or directly related to the
activities referred to in paragraphs 1, 2 and 3."

"Except for notifications and applications made by international organisations which
are accredited to the United Nations, all notifications to the Committee established
by Resolution 661(1990) of the Security Council of the United Nations, applications
for approval by that Committee and applications for payment addressed to the Office
of the Iraq Programme of the Secretariat-General of the United Nations, shall be
made through the competent authority of the Member State in which the person,
entity or body concerned is resident or established, as listed in Annex I. As regards
notifications, applications and requests for payments concerning exports to Iraq, the
request shall be accompanied by the completed form entitled "Notification or
Request to Ship Goods to Iraq" in Annex II."

"A confirmation in writing by a competent authority listed in Annex I, as referred to
in this Article, shall be valid throughout
the Community. Upon receipt of an
authorisation from the Committee established by Resolution 661(1990) or a
notification from the Office of the Iraq Programme that an export to Iraq is eligible
for payment from the escrow account referred to above, the competent authorities
listed in Annex I shall immediately give such written confirmation to the person,
entity or body concerned."

Article 4 is replaced by the following:

"Article 4"

"Any direct or indirect payment from the escrow account established by the
Secretary General of the United Nations pursuant to Resolution 986(1995) shall be
destined only for the purposes indicated in paragraph 8 of that resolution, as
published in the Official Journal of the European Communities, and shall not be
diverted to any other purpose."

"Any natural or legal person, entity or body shall immediately report to a competent
authority listed in Annex I and,
to the
Commission, any attempt, pressure or action by or on behalf of the Government of
Iraq or any person, entity or body in Iraq or acting for or on behalf such person,
entity or body, to depart or deviate in any manner, from the terms of the contract or
agreement which it has submitted to the Committee established by Resolution

through such authority or directly,

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4.

5.

2.

1.

2.

661(1990) of the Security Council of the United Nations or to the Office of the Iraq
Programme of the Secretariat-General of the United Nations."

3.

Annexes I and II are added to Council Regulation (EC) No 2465/96 and shall read as
set out in Annexes I and II to this Regulation, respectively.

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

Article 2

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

Done at Brussels,

For the Council
The President

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ANNEX I

"Annex I"

"List of competent authorities referred to in Articles 2 and 4

(to be completed by the Member States)"

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ANNEX II

"Annex II"

"Form to be filled out for notification of exports to Iraq, application for approval of
such exports or application for payment for such exports from the UN escrow account,
as referred to in Article 2(4).

May 2002 REVISED

SECURITY COUNCIL COMMITTEE ESTABLISHED BY RESOLUTION 661 (1990)
CONCERNING THE SITUATION BETWEEN IRAQ AND KUWAIT
NOTIFICATION OR REQUEST TO SHIP GOODS TO IRAQ

For further guidance regarding completion of application please consult OIP web site (www.un.org/Depts/oip/index)
(TO BE COMPLETED BY THE SECRETARIAT)

COMM. No.

REGISTRATION DATE

DATE RECEIVED BY
UNMOVIC/IAEA (if applicable)

DATE SENT TO THE
COMMITTEE (if applicable)

(TO BE COMPLETED BY PROSPECTIVE EXPORTING COUNTRY or INTERNATIONAL ORGANIZATION)

1. MISSION OR INTERNATIONAL ORGANIZATION

2. CERTIFYING SIGNATURE AND OFFICIAL SEAL

3. DATE OF SUBMISSION

4. MISSION REFERENCE No.

5. GOODS TO BE SHIPPED (General description of the goods)

6. NUMBER OF LINE ITEMS
ON THE EXCEL FORM
ATTACHMENT

7. TOTAL VALUE

8. CURRENCY
ISO CODE

9. EXPORTER

Name:

Address:

Country:

Phone/Fax/E-mail:

10. ORIGIN of GOODS (if different from applicant State)

11. RECEIVING COMPANY/ORG.

12. SHIPPING ARRANGEMENTS:

Name:

Address:

Phone/Fax/E-mail:

Select ONE Point of Entry into Iraq
(cid:1)
(cid:1)

(cid:1)

Trebil

Al Waleed

(cid:1)

Zakho

Umm Qasr

13. END USER entity (if different from receiving company/org.)

14. END USE

Name:

Address:

Phone/Fax/E-mail:

Provide details of intended end-use.

(attach additional sheets if necessary)

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15. METHOD OF PAYMENT

(cid:1)

From the Iraq Account in accordance
with SC resolution 986 (1995)

In this case, please fill out PAGE 2

(Relevant documentation including contract(s) must be attached)

16. ADDITIONAL INFORMATION:

(Attach additional sheet if necessary)

(cid:1)

By other arrangement

(in this case, disregard page 2)

IF THIS NOTIFICATION OR REQUEST TO SHIP GOODS TO IRAQ
IS TO BE PAID FROM THE IRAQ ACCOUNT
IN ACCORDANCE WITH SC RESOLUTION 986 (1995)
PLEASE FILL OUT THESE ADDITIONAL BOXES

(see box 15 on page 1)

MISSION REFERENCE No.:

17. IDENTICAL GOODS PREVIOUSLY SUBMITTED:

Indicate whether or not you have previously submitted an application for IDENTICAL goods.

(cid:1)

(cid:1)

(cid:1)

YES

NO

UNABLE TO DETERMINE

If YES provide Comm. number reference(s) with respective item number(s)

18. DETAILED LIST OF GOODS:

Indicate whether or not the scope of supply includes any spare parts, accessories, sets, kits, tool boxes, tools, equipment,
special tools, lots or consumables.

(cid:1)

(cid:1)

YES

NO

If YES indicate whether or not all components of the spare parts, accessories, sets, kits, tool boxes, tools, equipment,
special tools, lots or consumables have been listed as separate line items with the relevant description, quantity and price on
the attached Excel format application.
(cid:1)

(cid:1)

YES

NO (in this case, the document will not be registered by the Secretariat)

19. TECHNICAL INFORMATION:

Indicate whether or not the scope of the supply includes (separately or as part of larger item) any of the goods and/or
technology specified on the OIP web site (www.un.org/Depts/oip/cpmd/delays)

(cid:1)

(cid:1)

YES

NO

If YES indicate whether or not the relevant technical specification form for each item has been completed and attached to the application.

(cid:1)

(cid:1)

YES

NO

PAGE 1 of 2

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20. GRL RELATED ITEM(S) AND/OR TECHNOLOGY:

Indicate whether or not the scope of supply includes any item included in the Goods Review List (GRL). The GRL may be

accessed via the OIP web site (www.un.org/Depts/oip...).

(cid:1)

(cid:1)

(cid:1)

YES

NO

UNABLE TO DETERMINE

If YES indicate below the line item number and description as from the Excel sheet of these goods considered to be

included in the GRL.

Line item No.

Description

GRL Ref. No.

(attach additional sheets if necessary)

IMPORTANT NOTICE

The following attachments are compulsory

1)
2)
3)

Excel form application listing IN DETAIL all goods (including all spare parts, accessories ...) + diskette
Contract signed by both parties with all attachments, enclosures and annexes
All relevant documentations and/or technical specifications of the goods (e.g. brochures, pictures,
diagrams, chemical composition, material composition, etc.).

For further guidance regarding completion of application please consult OIP web ssiittee
((wwwwww..uunn..oorrgg//DDeeppttss//ooiipp//iinnddeexx))

PAGE 2 of 2

_____________"

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