Proposal for a Council Regulation imposing certain specific restrictive measures directed against persons acting in violation of the arms embargo with regard to the Democratic Republic of the Congo
Date: 2005-05-27
Institutions: European Commission
Subjects: Democratic Republic of the Congo, arms trade, common foreign and security policy, international sanctions, military equipment

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.05.2005 
COM(2005) 227 final 

2005/0101 (CNS) 

Proposal for a 

COUNCIL REGULATION 

imposing certain specific restrictive measures directed against persons acting in 
violation of the arms embargo with regard to the Democratic Republic of the Congo 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

(1) 

(2) 

(3) 

(4) 

In  view  of  the  continuing  illicit  flow  of  weapons  within  and  into  the  Democratic 
Republic  of  the  Congo,  the  UN  Security  Council,  acting  under  Chapter  VII  of  the 
Charter  of  the  United  Nations,  adopted  Resolution  1596  (2005)  of  18  April  2005, 
amending the arms embargo imposed by UN Security Council Resolution 1493 (2003) 
and taking additional restrictive measures in respect of the Democratic Republic of the 
Congo.  The  additional  restrictive  measures  concern  restrictions  on  admission  and 
financial  restrictive  measures  against  persons  designated  by  the  competent  United 
Nations  Sanctions  Committee  as  acting  in  violation  of  the  arms  embargo  imposed 
against the Democratic Republic of the Congo. 

In  order  to  implement  the  restrictive  measures  set  out  in  UN  Security  Council 
Resolution 1596 (2005), the Council has adopted Common Position 2005/XXX/CFSP. 

The  freezing  of  funds  and  economic  resources  foreseen  by  Common  Position 
2005/XXX/CFSP  falls  within  the  scope  of  the  Treaty.  The  Commission  proposes  to 
implement these measures in the Community by means of a Council Regulation. 

The proposed measures are similar to those imposed by means of Regulation (EC) No 
881/2002  imposing  certain  specific  restrictive  measures  directed  against  certain 
persons and entities associated with Usama bin Laden, the Al-Qaida network and the 
Taliban, and by means of Regulation (EC) No 1763/2004 imposing certain restrictive 
measures  in  support  of  effective  implementation  of  the  mandate  of  the  International 
Criminal  Tribunal  for  the  former  Yugoslavia  (ICTY),  to  give  but  two  examples. 

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2005/0101 (CNS) 

Proposal for a 

COUNCIL REGULATION 

imposing certain specific restrictive measures directed against persons acting in 
violation of the arms embargo with regard to the Democratic Republic of the Congo 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Articles 
60, 301 and 308 thereof, 

Having  regard  to  Common  Position  2005/xxx/CFSP  of  xx.xx  2005  concerning  restrictive 
measures against the Democratic Republic of the Congo,1 

Having regard to the proposal from the Commission2, 

Having regard to the opinion of the European Parliament3, 

Whereas: 

(1) 

(2) 

(3) 

In  view  of  the  continuing  illicit  flow  of  weapons  within  and  into  the  Democratic 
Republic  of  the  Congo,  the  UN  Security  Council,  acting  under  Chapter  VII  of  the 
Charter  of  the  United  Nations,  adopted  Resolution  1596  (2005)  of  18  April  2005, 
hereinafter  referred  to  as  UNSCR  1596  (2005),  providing,  inter  alia,  for  financial 
restrictive  measures  against  persons  designated  by  the  competent  United  Nations 
Sanctions Committee as acting in violation of the arms embargo imposed against the 
Democratic  Republic  of  the  Congo  by  United  Nations  Security  Council  Resolutions 
1493 (2003) and 1596 (2005). 

Common  Position  2005/XXX/CFSP  provides,  inter  alia,  for  implementation  of  the 
financial  restrictive  measures  against  persons  designated  by  the  competent  United 
Nations Sanctions Committee.  

Those measures fall within the scope of the Treaty. In order to avoid any distortion of 
competition Community measures are therefore necessary to implement them as far as 
the Community is concerned. For the purposes of this Regulation, the territory of the 
Community  should  be  deemed  to  encompass  the  territories  of  the  Member  States  to 
which the Treaty is applicable, under the conditions laid down in the Treaty. 

(4) 

For  reasons  of  expediency,  the  Commission  should  be  empowered  to  amend  the 
Annexes to this Regulation.  

1 
2 
3 

OJ L […] […], p. […] 
OJ C […] […], p.[…] 
OJ C […] […], p. […] 

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(5) 

(6) 

In order to ensure that the measures provided for in this Regulation are effective, this 
Regulation should enter into force on the day of its publication. 

The  Treaty,  in  Articles  60  and  301,  empowers  the  Council  to  take,  under  certain 
conditions, measures aimed at the interruption or reduction of payments or movement 
of capital and of economic relations with regard to third countries. The measures laid 
down in this Regulation, targeted also at individual persons not directly linked to the 
government of a third country, are necessary to attain this objective of the Community 
and Article 308 of the Treaty empowers the Council to take such measures if no other 
specific powers are provided for in the Treaty, 

HAS ADOPTED THIS REGULATION: 

Article 1 

For the purposes of this Regulation, the following definitions shall apply: 

1. 

2. 

‘Sanctions Committee’ means the Committee of the Security Council of the United 
Nations which was established pursuant to paragraph 8 of UNSCR 1533 (2004); 

‘funds’ means financial assets and benefits of every kind, including but not limited 
to: 

(a) 

cash,  cheques,  claims  on  money,  drafts,  money  orders  and  other  payment 
instruments; 

(b)  deposits with financial institutions or other entities, balances on accounts, debts 

and debt obligations; 

(c) 

(d) 

(e) 

publicly and privately traded securities and debt instruments, including stocks 
and  shares,  certificates  representing  securities,  bonds,  notes,  warrants, 
debentures and derivatives contracts; 

interest, dividends or other income on or value accruing from or generated by 
assets; 

credit,  right  of  set-off,  guarantees,  performance  bonds  or  other  financial 
commitments; 

(f) 

letters of credit, bills of lading, bills of sale; 

(g)  documents evidencing an interest in funds or financial resources; 

(h) 

any other instrument of export-financing; 

3. 

‘freezing of funds’ means preventing any move, transfer, alteration, use of, access to, 
or  dealing  with  funds  in  any  way  that  would  result  in  any  change  in  their  volume, 
amount, location, ownership, possession, character, destination or other change that 
would enable the funds to be used, including portfolio management; 

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4. 

5. 

1. 

2. 

3. 

1. 

2. 

‘economic  resources’  means  assets  of  every  kind,  whether  tangible  or  intangible, 
movable or immovable, which are not funds but can be used to obtain funds, goods 
or services; 

‘freezing of economic resources’ means preventing their use to obtain funds, goods 
or services in any way, including, but not limited to, the selling, hiring or mortgaging 
of them. 

Article 2 

All funds and economic resources belonging to, or owned or held by, the natural or 
legal persons, entities or bodies listed in Annex I shall be frozen. 

No funds or economic resources shall be made available, directly or indirectly, to or 
for the benefit of the natural or legal persons, entities or bodies listed in Annex I. 

The  participation,  knowingly  and  intentionally,  in  activities  the  object  or  effect  of 
which is, directly or indirectly, to circumvent the measures referred to in paragraphs 
1 and 2 shall be prohibited. 

Article 3 

By way of derogation from Article 2 and provided that the Member State concerned 
has  notified  its  intention  to  the  Sanctions  Committee  and  the  Sanctions  Committee 
has  not  objected  within  two  working  days  of  such  notification,  the  competent 
authorities of the Member States, as listed in Annex II, may authorise the release of 
certain frozen funds or economic resources or the making available of certain frozen 
funds or economic resources, under such conditions as they deem appropriate, after 
having determined that the funds or economic resources concerned are:  

(a) 

(b) 

necessary  for  basic  expenses,  including  payments  for  foodstuffs,  rent  or 
mortgage,  medicines  and  medical  treatment,  taxes,  insurance  premiums,  and 
public utility charges; 

intended  exclusively  for  payment  of  reasonable  professional  fees  and 
reimbursement  of  incurred  expenses  associated  with  the  provision  of  legal 
services; 

(c) 

intended exclusively for payment of fees or service charges for routine holding 
or maintenance of frozen funds or economic resources. 

By way of derogation from Article 2 the competent authorities of the Member States, 
as listed in Annex II, may authorise the release of certain frozen funds or economic 
resources  or  the  making  available  of  certain  frozen  funds  or  economic  resources, 
after  having  determined  that  the  funds  or  economic  resources  are  necessary  for 
extraordinary  expenses,  provided  that  determination  has  been  notified  by  the 
Member  State  to  the  Sanctions  Committee  and  that  the  determination  has  been 
approved by that Committee. 

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By way of derogation from Article 2, the competent authorities of the Member States as listed 
in  Annex  II  may  authorise  the  release  of  certain  frozen  funds  or  economic  resources,  if  the 
following conditions are met: 

Article 4 

(a) 

(b) 

(c) 

(d) 

(e) 

1. 

2. 

1. 

the  funds  or  economic  resources  are  subject  of  a  judicial,  administrative  or  arbitral 
lien  established  prior  to  18  April  2005  or  of  a  judicial,  administrative  or  arbitral 
judgment rendered prior to that date; 

the funds or economic resources will be used exclusively to satisfy claims secured by 
such  a  lien  or  recognised  as  valid  in  such  a  judgment,  within  the  limits  set  by 
applicable laws and regulations governing the rights of persons having such claims; 

the lien or judgment is not for the benefit of a person, entity or body listed in Annex 
I; 

recognising the lien or judgment is not contrary to public policy in the Member State 
concerned; 

the  lien  or  judgement  has  been  notified  by  the  Member  State  to  the  Sanctions 
Committee. 

Article 5 

Article  2(2)  shall  not  apply  to  the  addition  to  frozen  accounts  of  interest  or  other 
earnings  on  those  accounts,  or  payments  due  under  contracts,  agreements  or 
obligations  that  were  concluded  or  arose  prior  to  the  date  on  which  those  accounts 
became subject to this Regulation, provided that any such interest, other earnings and 
payments are frozen in accordance with Article 2(1).  

Any  person  making  a  payment  due  under  contracts,  agreements  or  obligations  that 
were concluded or arose prior to the date on which those accounts became subject to 
this Regulation shall inform the competent authorities. 

Article  2(2)  shall  not  prevent  the  crediting  of  the  frozen  accounts  by  financial  or 
credit institutions that receive funds transferred by third parties to the account of the 
listed person, entity or body, provided that any such additions to such accounts will 
also  be  frozen.  The  financial  or  credit  institutions  shall  inform  the  competent 
authorities about such transactions without delay. 

Article 6 

Without  prejudice  to  the  applicable  rules  concerning  reporting,  confidentiality  and 
professional secrecy and to the provisions of Article  284  of the Treaty, natural and 
legal persons, entities and bodies shall: 

(a) 

supply  immediately  any  information  which  would  facilitate  compliance  with 
this  Regulation,  such  as  accounts  and  amounts  frozen  in  accordance  with 
Article 2, to the competent authorities of the Member States listed in Annex II 

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where they are resident or located, and shall transmit such information, directly 
or through these competent authorities, to the Commission; 

(b) 

cooperate with the competent authorities listed in Annex II in any verification 
of this information. 

Any  additional  information  directly  received  by  the  Commission  shall  be  made 
available to the competent authorities of the Member State concerned. 

Any information provided or received in accordance with paragraphs 1 and 2 shall be 
used only for the purposes for which it was provided or received. 

2. 

3. 

Article 7 

The  freezing  of  funds  and  economic  resources  or  the  refusal  to  make  funds  or  economic 
resources  available,  carried  out  in  good  faith  on  the  basis  that  such  action  is  in  accordance 
with this Regulation, shall not give rise to liability of any kind on the part of the natural or 
legal person or entity implementing it, or its directors or employees, unless it is proved that 
the funds and economic resources were frozen as result of negligence. 

Article 8 

The  Commission  and  Member  States  shall  immediately  inform  each  other  of  the  measures 
taken under this Regulation and shall supply each other with any other relevant information at 
their  disposal  in  connection  with  this  Regulation,  in  particular  information  in  respect  of 
violation and enforcement problems and judgments handed down by national courts. 

1. 

The Commission shall be empowered to: 

Article 9 

(a) 

amend  Annex  I  on  the  basis  of  determinations  made  by  the  Sanctions 
Committee; 

(b) 

amend Annex II on the basis of information supplied by Member States. 

2. 

Without  prejudice  to  the  rights  and  obligations  of  the  Member  States  under  the 
Charter of the United Nations, the Commission shall maintain all necessary contacts 
with the Sanctions Committee for the purpose of the effective implementation of this 
Regulation. 

Article 10 

Member  States  shall  lay  down  the  rules  on  penalties  applicable  to  infringements  of  the 
provisions  of  this  Regulation  and  shall  take  all  measures  necessary  to  ensure  that  they  are 
implemented. The penalties provided for must be effective, proportionate and dissuasive.  

Member States shall notify those rules to the Commission without delay after the entry into 
force of this Regulation and shall notify it of any subsequent amendment. 

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This Regulation shall apply  

Article 11 

(a) 

(b) 

(c) 

within  the  territory  of  the  Community,  including  its  airspace  and  on  board  any 
aircraft or any vessel under the jurisdiction of a Member State; 

to any person inside or outside the territory of the Community who is a national of a 
Member State; 

to  any  legal  person,  group  or  entity  which  is  incorporated  or  constituted  under  the 
law of a Member State; 

(d) 

to any legal person, group or entity doing business within the Community. 

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

Article 12 

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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List of natural and legal persons, entities or bodies referred to in Article 2 

ANNEX I 

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ANNEX II 

List of competent authorities referred to in Articles 3, 4, 5 and 6 

(to be completed by the Member States)  

BELGIUM 

CZECH REPUBLIC 

DENMARK 

GERMANY 

ESTONIA 

GREECE 

SPAIN 

FRANCE 

IRELAND 

ITALY 

CYPRUS 

LATVIA 

LITHUANIA 

LUXEMBOURG 

HUNGARY 

MALTA 

NETHERLANDS 

AUSTRIA 

POLAND 

PORTUGAL 

SLOVENIA 

SLOVAKIA 

FINLAND 

SWEDEN 

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UNITED KINGDOM 

EUROPEAN COMMUNITY 

Commission of the European Communities 

Directorate-General for External Relations 

Directorate Common Foreign and Security Policy (CFSP) and European Security and Defence 
Policy (ESDP): Commission Coordination and contribution 

Unit A.2: Legal and institutional matters, CFSP Joint Actions, Sanctions, Kimberley Process 

CHAR 12/163 

B - 1049 Bruxelles/Brussel 

Tel. (32-2) 296 25 56 

Fax (32-2) 296 75 63 

e-mail: Relex-Sanctions@cec.eu.int 

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