EU sanctions: European Commission adopts opinion to clarify the application of financial sanctions
EU sanctions: As part of its role to ensure the effective and uniform implementation of EU restrictive measures (sanctions), the European Commission has issued an Opinion that clarifies how existing financial sanctions should be interpreted in particular as regards the freezing of assets.
A clarified framework
Asset freezing refers to the blocking of bank accounts and other assets of persons listed under EU sanctions. The Opinion should provide clarity to Member States’ competent authorities as regards the implementation of restrictive measures imposed by the EU in this field.
The Opinion concerns the sanctions imposed by means of Council Regulation (EU) No 269/2014in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. It was requested by EU national competent authorities, which are responsible for implementing EU sanctions.
Prohibition to make funds
Similarly to other sanctions regulations, Council Regulation (EU) No 269/2014 imposes the freezing of all assets belonging to, owned, held or controlled by the listed natural and legal persons, and a prohibition to make funds and economic resources available to them.
In this regard, the Commission clarified that the assets of an entity controlled by a listed person must be frozen, even if the entity as such is not listed.
However, the controlled entity may obtain the lifting of the freeze on some or all of its assets if it provides evidence that they are in fact not controlled by the listed person.
The text further clarified that funds and economic resources cannot be made available to entities controlled by listed persons, except in specific cases foreseen as derogations in the sanctions regime.
It also specified that the provision of labour or services to entities controlled by listed persons can amount to making economic resources indirectly available to the listed persons, insofar as it enables the latter to ultimately obtain an economic benefit.