EU sanctions: Commission adopts opinion clarifying the enforcement of financial sanctions

Oct 6, 2020 Benn-Ibler Rechtsanwälte

In its statement of 19 June 2020, the European Commission specified how existing financial sanctions are to be interpreted and how to proceed, in particular in the case of the freezing of assets. This statement is intended to provide the competent authorities with clarity in dealing with EU restrictive measures in this area.

The statement addresses sanctions imposed by Council Regulation (EU) No 269/2014 in the face of actions that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine. National authorities in the EU had requested a statement from the Commission.

The above-mentioned Regulation provides for a freezing of all funds and economic resources belonging to the natural or legal persons listed therein and that no funds or economic resources may be made available to them. The freezing of assets will result in the freezing of bank accounts and other financial assets of any person listed by name in an EU Sanctions Regulation.

The Commission specifies in this respect that the assets of entities controlled by listed persons must also be frozen, even if the entities are not listed as such. However, this may be lifted for some or all of the assets of the controlled entity if it can prove that they are not controlled by the listed person.

Furthermore, it is clarified that funds or economic resources may only be made available to entities controlled by listed persons in certain exceptional circumstances specified in the sanctions regulation. Both the provision of work and services to entities controlled by listed persons may constitute an indirect provision of economic resources to the listed persons, provided that the listed persons are enabled to derive an economic benefit thereof.

EU Commission – Press Release (19.06.2020)