Following the social unrest in the Middle East and parts of Africa, the United Nations Security Council recently adopted a number of Resolutions. These Resolutions introduced restrictive measures against certain countries, persons, entities and bodies involved in, among other things, serious human rights abuses. Most recently, restrictive measures were imposed by the UNSC in view of the situation in Iran, Cote d’Ivoire and Libya.
Further to the UNSC Resolutions, the EU Authorities have implemented various sanctions and restrictive measures against the aforementioned countries by means of Decisions and Regulations. In many cases, the EU sanctions and restrictions are even stricter than the measures imposed by the UN. In addition to the EU measures, national EU Member States’ authorities can implement specific national restrictions.
Current EU sanctions and restrictive measures include, but are not limited to:
- embargo on arms and related material;
- embargo on equipment that may be used for internal repression;
- ban on the provision of certain services;
- prior information requirements on cargo;
- restrictions on admission of listed persons;
- freezing of funds and economic resources of listed persons, entities and bodies; and
- prohibition to grant certain claims to listed persons and entities.
EU sanctions and restrictive measures generally apply not only within the territory of the EU, including its airspace, but also:
- onboard any aircraft or any vessel under the jurisdiction of a Member State;
- to any person inside or outside the territory of the EU who is a national of a Member State;
- to any legal person, entity or body which is incorporated or constituted under the law of a Member State; and
- to any legal person entity or body in respect of any business done in whole or in part within the EU.
As such, the EU measures have a direct consequence for many companies and people doing business in or with for example Iran, Cote d’Ivoire and Libya. Not only for EU companies, but potentially also for U.S. companies with international (EU) operations or an international workforce including nationals of a EU Member State.
Failure to comply with the EU and, if applicable, national sanctions can have serious consequences. The consequences can vary from a “simple” warning to, for example, penalties and/or imprisonment of responsible personnel. In addition, the reputation of a company can be at risk. Ensuring compliance by implementing compliance proceedings, providing compliance training to personnel and, where and to the extent possible, obtaining prior written approval on specific transactions from the competent authorities is therefore strongly recommended.
With a view to the current situation in various countries in the Middle East and Africa, it is a virtual guarantee that the UN and the EU will continue to monitor the developments on an ongoing basis. New developments may lead to additional sanctions and restrictive measures being imposed, thereby increasing the need for a comprehensive compliance program.