CELEX: 51994PC0091
Language: en
Date: 1994-03-25
Title: Proposal for a COUNCIL REGULATION (EC) preventing the supply of certain goods and services to Libya and restricting the use of funds or other financial resources owned or controlied by Libya

COMMISSION OF THE EUROPEAN COMVIUNITIES
                                                    C0M(94) 91 final
                                                     Brussels, 25.03.1994
                                      Proposal for a
                                 COUNCIL REGULATION (EC
              preventing the supply of certain goods and services to Libya and
                               restricting the use of funds or
                             other financial resources owned or
   INïSÏ?                            controlled by Libya
m^sm
                             (presented by the Commission)
 ---pagebreak---         PXPt AMATORY MEMORANDUM
The Council of the European Union adopted on 22 November 1993 a common
position regarding the implementation of Resolution 883 (1993) of the
Security Council of the United Nations, by deciding that the economic
relations with Libya should be reduced in accordance with the relevant
provisions of that resolution.
Consequently, and in accordance with Article 228A of the EC Treaty, the
Commission made the pertinent proposals for the measures to be taken by
the European Community.
The Commission proposals at that time did not deal with paragraph 3 of
the said Resolution which deals primarily with the freezing of assets
of certain Libyan persons and bodies. The reason for this was that the
new Article 73G of the EC Treaty, which, in combination with Article
228a, enables the Community to take urgent measures with regards to the
movement of capital and payments to third countries entered into force
only on 1 January 1994.
The Commission undertook however, to propose to the Council after 1
January a consolidated Regulation, covering all provisions of
Resolution 883 (1993) to which Article 73G and 228A apply, thereby
enabling the Council to adopt already before 1 December 1993 at least
that part of the Community legislation which could be based on Article
228a only.
In the meantime legislation covering the freezing of Libyan assets was
introduced by the Member States individually.
The present proposal covers now all the provisions of Resolution
 883(1993) falling under Articles 73G and 228A of the EC Treaty.
 In order to maintain the transparency of the Community legislation with
 regard to the Libyan embargo, the proposal incorporates the existing
provisions of Council Regulation (CE) N° 3274/93 of 29 November 1993,
 ---pagebreak--- which will be repealed when the Council adopts the present proposal.
Account has been taken of the comments received from Member States with
regard to the Annex to the last mentioned Regulation.  The Annex has
been revised accordingly, in particular the provision under paragraph
VI.
The freezing of Libyan assets and related provisions of paragraph 3 of
resolution 883 (1993) is dealt with in Articles 4,5 and 6 of the
proposed Regulation.
A comparison of these Articles with the relevant provisions of the
legislation of the Member States shows that the Commission has followed
closely the approach taken by the Member States in the implementation
of paragraph 3 of Resolution 883(1993).  Comments received from the
banking sector have further enabled the Commission to take into account
some practical implications of the provision of the said paragraph.
However, some differences exist between the national legislation of the
Member States and the present proposal, especially with regard to the
provision of funds or financial resources other than the ones that are
frozen, as well as the character and conditions for exceptions to be
granted.  The present proposal spells out these exceptions quite
specifically.
The present proposal is also based on the assumption that the Security
Council, when adopting Resolution 883 (1993), did not want to impose a
comprehensive trade embargo, and that therefore the provisions with
regard to the financial embargo should be interpreted in such a way
that they would not result in a trade embargo that would go beyond the
explicit trade restrictions contained in the relevant Security Council
resolutions.  Such would for instance be the case if banks would not be
allowed to provide guarantees in relation to permitted exports to
Libya, or if payment of port fees in Libyan harbours would be
prohibited.
However, with the present proposal the Commission stayed within the
limits of the exceptions that were agreed upon in the Sanctions
Committee of the Security Council with regard to the embargos of Iraq
 ---pagebreak--- and the Federal Republic of Yugoslavia (Serbia and Montenegro), and/or
applied by Member States of the United Nations.
In order to enable the economic operators concerned to obtain more
easily the necessary information the proposed Regulation contains in
its Annex 2 the list of the competent authorities of the Member States,
dealing with the different aspects of the Libyan embargo.
The overall approach chosen by the Commission is based on the wish to
provide the maximum transparency for the economic operators concerned
in respect of the Libyan embargo.  Such a transparency will in
particular reduce the possibilities of a distortion of competition by a
significantly different application of the exceptions by the Member
States.
 ---pagebreak---                   COUNCIL REGULATION (EC) No          /94
                            Of ....        1994
     preventing the supply of certain goods and services to Libya and
                      restricting the use of funds or
                    other financial resources owned or
                            controlled by Libya
The Council of the European union
Having regard to the Treaty establishing the European     Community, and
 in particular Articles 73G and 228A thereof,
Having regard to Decision 93/614/CFSP adopted by the Council of the
European Union on 22 November 1993,(1)
Having regard to the proposal of the Commission,
Having regard to the opinion of the Monetary Committee,
Whereas the United Nations Security Council, in view of the persistent
non-compliance by Libya with its Resolutions 731 (1992) and 748 (1992)
and acting under Chapter VII of the Charter of the United Nations, has
decided in its Resolution 883 (1993) of 11 November 1993 to extend the
measures decided upon in its Resolution 748 (1992);
Whereas the Council adopted accordingly Regulation (EC) N" 3274/93(2).
     (1) OJ N* L295, 30.11.93, p.7
     (2) OJ N* L295, 30.11.93, p.1
                              ^ <~f_ 5 -
 ---pagebreak--- Whereas, according to Article 73G EC Treaty, this Regulation should be
extended, as from 1 January 1994, with provisions regarding the
movement of capital and payments as regards Libya, as contained in
paragraph 3 of United Nations Security Council resolution 883 (1993);
Whereas the Regulation should Include provisions to prevent Libya from
passing on effects of the embargo to the Community and should enable
humanitarian or emergency demands to be met, as inter alia foreseen fh
Resolutions 748 (1992) and 883 (1993) of the United Nations Security
Counc iI ;
Whereas the Regulation should not lead to unnecessary restrictions on
the trade with Libya, nor to unjustified advantages to economic
operators within the Community;
Whereas the Community, for reasons of transparency, has decided to
incorporate the additional measures within the framework of an all-
embracing Community instrument;
Whereas under these conditions Council Regulation (EC) No 3274/93 can
be repealed;
HAS ADOPTED THIS REGULATION:
Article 1
1)  Permission shall be denied to any aircraft to take off from, land
     in or overfly the territory of the Community if it is destined to
     land in or has taken off from the territory of Libya.
2)  Permission shall be granted when the particular flight has been
    approved on grounds of significant humanitarian need by the
    Committee set up pursuant to paragraph 9 of Resolution 748 (1992)
    of the United Nations Security Council.
 ---pagebreak--- Article 2
1)  The activities and operation of all Libyan Arab Airlines offices
    shall be prohibited, and their offices be closed completely.
2)  Any commercial transaction with Libyan Arab Airlines shall be
    prohibited, including the honouring or endorsement of any tickets
    or other documents issued by that airline.
Article 3
1.  The supply or provision to Libya, directly or indirectly, of the
    goods and/or services listed in the Annex to this Regulation shall
    be prohibited.
2.  The supply or provision to Libya of these goods and/or services may
    however be allowed by the competent authorities of the Member
    States provided that the end use of these goods and/or services
    differs from the end uses described in the Annex to this
    Regulation.
Article 4
For the purposes of Articles 5 and 6:
1.  'Libya' means the Government of Libya and/or any public authority
    of Libya and/or any Libyan undertaking.
 ---pagebreak--- 2.    'Libyan undertaking' means any commercial, industrial or public
      utility undertaking which is owned or controlled directly or
       indirectly by
(i) The Government of Libya or public authorities of Libya, or
(ii) any entity, wherever located or organized, owned or controlled by
the persons or bodies mentioned under (i) above, or
( M i ) any person identified by the competent authorities of the Member
States as acting, for the purposes of this Regulation, on behalf of the
persons or bodies mentioned under (i) and/or (ii) above.
3.    'bank account' means an account held within the Community with a
      credit institution or other person or body, so authorized by the
      competent authorities of the Member States.
4.    'funds or financial resources' means funds or financial resources
      of whatever kind or origin including, but not limited to, cash,
      liquid assets, payment claims, guarantees and documentary credits,
      funds derived or generated from property, investments, shares,
      bonds and other securities, as well as gold and other precious
      metals.
Article 5
1.    The disposal by Libya of any funds or financial resources shall be
      prohibited.
2.    No funds or financial resources shall be made available, directly
      or indirectly, to or for the benefit of Libya.
3.    Any activity shall be prohibited whose object or effect it is to
      further the activities that are prohibited under paragraphs 1. and
      2. of this Article, except activities of a purely administrative
      character.
                                     8
 ---pagebreak--- Article 6
 1.  The prohibitions of Article 5 do not apply to funds or other
     financial resources which derive from the sale or supply of any
     petroleum or petroleum products, including natural gas and natural
     gas products, or agricultural products or commodities, originating
     in Libya and exported therefrom after 1 December 1993, provided
     that any such funds are paid into bank accounts used exclusively
     for these funds.
2.   The prohibition of Article 5(1) and 5(3) do not apply in cases of:
 (i) payment for the execution of contracts, in so far and to the extent
that the execution took place before 1 December 1993;
(ii) payment of salaries or similar payments including pensions, taxes
or similar duties or charges for the administration of bank accounts or
other financial resources;
(iii) payment of premiums for health insurance and for those insurances
which are obligatory within the Member State concerned;
(iv) payment for flights permitted under paragraph 2 of Article 1 of
this Regulation, and for the supply or provision of emergency equipment
and equipment and services directly related to civilian air traffic
control ;
(v) payment for transactions of an exceptional nature and which
otherwise do not contravene this Regulation;
 ---pagebreak--- to the extent that the amount of payment exceeds the amount of funds
and/or financial resources available from the supply or sale of goods
and products mentioned in paragraph (1) of this Article, and provided
the payments are made within the Community and an authorization has
been obtained from the competent authorities of the Member States.
3.   Without prejudice to Article 5(1) and 6(1), the prohibition
     provided for in Article 5(2) and 5(3) do not apply in cases of: -
(a) payments of due interest or of similar remuneration on funds or
financial resources and,
(b) payments or other financial activities related to the execution of
contracts or transactions with Libya which are not prohibited by this
Régulât ion,
provided that they take place within the Community and to the persons
or bodies directly entitled thereto, and an authorisation has been
obtained from the competent authorities of the Member States.
4.   The prohibition of Article 5(2) and 5(3) do not apply to payments
     to Libya within the Libyan territory for services rendered or goods
     supplied by Libya within this territory and within the framework of
     the execution of contracts and/or transactions which are not
     prohibited by this Regulation, and to the extent that these
     payments do not exceed the normal value of these goods and/or
     services.
Art icle 7.
1.   Member States shall take the necessary measures to ensure the
     implementation of this Regulation, including the determination of
     sanctions, to be imposed where the provisions of this Regulation
     are infringed.
                                    10
 ---pagebreak---  2.  Member States shall inform each other and the Commission of the
     measures taken under paragraph 1 of this Article and of all other
     relevant information in connection herewith.
 3.  Where exports are allowed under Article 3(2) and authorizations are
     given under Article 6(2) or 6(3), the information thereon,
     including the main facts and considerations, is provided within 30
     days.
4.   The names and addresses of the competent authorities of the Member
     States , referred to in Articles 3,4 and 6 are contained in Annex 2
     to this Regulation;
The Commission is hereby empowered to amend Annex 2 to this Regulation
on the basis of notifications of the Member States.
Such amendments shall be published in the Official Journal of the
European Communities.
Article 8
This Regulation shall apply notwithstanding any rights or obligations
conferred or imposed by any international agreement or any contract
entered into or any licence or permit granted before 1 December 1993.
Art icle 9
This Regulation shall apply within the territory of the Community,
including its air space and in any aircraft or on any vessel under the
Jurisdiction of a Member State, and to any person elsewhere who is a
national of a Member State and any body elsewhere which is incorporated
or constituted under the law of a Member State.
                                    11
 ---pagebreak--- Article 10
Regulation (EC) No 3274/93 Is hereby repealed
Art icle 11
This Regulation shall enter into force on the day of its publication in
the Official Journal of the European Communities.
It shall apply as of 1 January 1994.
This Regulation shall be binding in its entirety and directly
applicable in all Member States.
Done at Brussels        1993
                                       For the Counc
                                       The President
                                   12
 ---pagebreak---                                  ANNEX I
Products and services whose supply to Libya is prohibited under Article
3 of this Régulât ion :
A)
    any aircraft or aircraft components
    the provision of engineering and maintenance servicing of Libyan
    aircraft or aircraft components ;
    the entering into or renewal of arrangements for the provision of
    engineering and maintenance servicing of any aircraft or aircraft
    components within Libya or for the making available, for operation
    within Libya, of any aircraft or aircraft components;
    advice, assistance or training to Libyan pilots, flight engineers
    or aircraft and ground maintenance personnel associated with the
    operation of aircraft and airfields within Libya ;
    any certification of airworthiness for Libyan aircraft ;
    payment of new claims against existing direct insurance contracts
    for Libyan aircraft ;
    any new or renewal of direct insurance for Libyan aircraft ;
    with the exception of emergency equipment and equipment and
    services directly related to civilian air traffic control :
        any materials or components destined for the construction,
         improvement or maintenance of Libyan civilian or military
        airfields and associated facilities and equipment, or
        any engineering or other services destined for the maintenance
        of those airfields and associated facilities and equipment ;
                                    13
 ---pagebreak--- B)
(I) Pumps of medium or large size whose capacity is equal to or larger
     than 350 cubic metres per hour and drivers (gas turbines and
     electric motors) designed for use In the transportation of crude
     oiI and natural gas.
(11)Equipment designed for use in crude oil export terminals :
         Loading buoys or single point moorings (SPM)
         Flexible hoses for connection between underwater manifolds
         (PLEM) and single point mooring and floating loading hoses of
          large sizes (from 12' to 16')
         Anchor chains.
(I I I)Equipment not specially designed for use in crude oil export
     terminals but which because of their large capacity can be used for
     this purpose:
         Loading pumps of large capacity (4000 m3/H and above) and small
         head (10 bars or less)
         Boosting pumps within the same range of flow rates
          in-line pipe line inspection tools and cleaning devices (ie
         pigging tools) (16' and above)
     -   Metering equipment of large capacity (1000 m3/H and above).
(IV) Refinery equipment
         Boilers meeting American Society of Mechanical Engineers 1
         standards
         Furnaces meeting American Society of Mechanical Engineers 8
         standards
         Fractionation columns meeting American Society of Mechanical 8
         standards
                                     14
 ---pagebreak---         Pumps meeting American Petroleum Institute 610 standards
        Catalytic reactors meeting American Society of Mechanical
        Engineers 8 standards
        Prepared catalysts, including the following :
        Catalysts containing platinum
        Catalysts containing Molybdenum
V.  Spare parts destined for the items in (I) to (IV) above.
VI. Any types of equipment, supplies and grants of licencing
    arrangements for the manufacture or maintenance of the items in (1)
    to (V) above.
                                   15
 ---pagebreak---                                ANNEX il
List of competent authorities mentioned in Articles 3(2), 4(2)(iii),
4(3), 6(2)(3)(4):
(NAMES AND ADRESSES TO BE PROVIDED IN DUE TIME BY THE MEMBER STATES) /
                                  16
 ---pagebreak---                                                                      ISSNL
                                                               COM (94) 91 final
                                                      DOCUMENTS
EN                                                                     10 n 02
                                Catalogue number : CB-CO-94-098-EN-C
                                                             ISBN 92-77-66664-1
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