Economic and financial sanctions

Asset freezes

In what circumstances may a person become subject to asset freeze provisions in your jurisdiction? What dealings do asset freeze provisions generally restrict in your jurisdiction?

An asset freeze is a targeted sanction imposed by way of an EU Regulation (often as a result of a resolution of the United Nations Security Council) against individuals and entities that are part of or affiliated with the governments of non-EU countries who are deemed to be responsible for serious violations of human rights or whose activities seriously undermine democracy or the rule of law in the respective country. Asset freezes are designed to prevent these individuals and entities from financing their pernicious activities.

Belgium can also impose asset freezes as a specific restrictive measure against persons and entities within the framework of the fight against terrorism and terrorism financing under the Royal Decree of 28 December 2006 as regards specific restrictive measures against some persons and entities within the framework of the fight against terrorism financing).

Asset freezes are the most common form of financial sanctions and usually consist of two components: (1) the obligation to freeze the assets and funds of the listed individuals or entities in question and (2) the prohibition to make assets and economic resources available to the listed individuals or entities. The freezing of assets prevents any transfer, alteration or use of the funds and assets.

In principle, the participation knowingly and intentionally in any activities that aim to circumvent asset freeze regulations is also prohibited.

General carve-outs and exemptions

Are there any general carve-outs or exemptions to the asset freeze provisions in your jurisdiction?

The competent authorities in the member states (Federal Public Service Finance – Treasury for Belgium) may authorise the release of certain frozen funds or economic resources, or the making available of certain funds or economic resources as they deem appropriate if the situation concerned complies with one or more of the derogations set out in the applicable EU regulation.

The derogations to the asset freeze usually include the satisfaction of basic needs (eg, foodstuffs, rent, medicines or medical treatment) for listed individuals and their family members, the payment of expenses associated with the provision of legal services or when the assets are necessary for extraordinary expenses or for humanitarian purposes.

The Belgian Federal Public Service Finance – Treasury, can derogate from the national asset freezes on the same grounds.

List of targeted individuals and entities

Do the competent sanctions authorities in your jurisdiction maintain a list of individuals and entities blocked under asset freeze restrictions?

The EU publishes and regularly updates a consolidated list of persons, groups and entities who are subject to EU financial sanctions as a result of the various sanctions regulations adopted under the CFSP. In addition, the EU Sanctions Map offers the possibility to check personal and territorial restrictions – other than financial sanctions (including asset freezes) – applicable to persons and entities listed in the annexes to the sanctions regulations.

Belgium has also published a list of persons and entities who are subject to national financial sanctions within the framework of the fight against terrorism and terrorism financing (known as the 'national terrorist list’).

Other restrictions

What other restrictions apply under the economic and financial sanctions regime in your jurisdiction?

Apart from asset freezes, the EU has also imposed bans on investments, loans or insurance services in and for certain sectors (eg, granting of loans for the installation of new power plants for electricity production in Syria) and a prohibition to finance the import or export of specific goods.

The bans on investments, loans or insurance services all relate to North Korea, Syria, Russia, Ukraine (Crimea and Sevastopol) and recently Belarus, and can be verified on the EU Sanctions Map. The prohibition to finance the import or export of certain goods is, in principle, an ancillary measure to the existing trade restrictions for the countries concerned.

Exemption licensing – scope

Are the competent sanctions authorities in your jurisdiction empowered to issue a licence to permit activities which would otherwise violate economic and financial sanctions? If so, what is the extent of their licensing powers and in what circumstances will they issue a licence?

Under EU regulations the national authorities of the member states are competent to issue authorisations that allow activities that are, in principle, prohibited under the applicable sanctions regime, insofar as the concerned sanctions regulation provides for the possibility to derogate from the applicable restrictions.

In Belgium, only the Federal Public Service Finance – Treasury can, on request, grant derogations (ie, authorisations) from financial sanctions.

For derogations from export, import and transit restrictions included in sanctions regulations, the three different regions of Belgium are competent to issue authorisations. The competent region is, in principle, determined on the basis of the administrative seat of the company involved in the transaction. The relevant points of contact for each region are:

 

The EU sanctions regulations do not provide for general authorisations. As the sanctions regimes are set out in EU regulations, national legislation cannot provide for national general authorisations.

Note that for certain other EU trade restrictions, a general licence can be granted (eg, the EU Dual-Use Regulation No. 428/2009 of 5 May 2009 provides that a general licence can be granted under specific circumstances).

Exemption licensing – application process

What is the application process for an exemption licence? What is the typical timeline for a licence to be granted?

The economic operator should first determine whether the federal level or the regions are competent to grant the required authorisation.

The authorisation application process is different for the three regions and the federal level as they all have their own administrative procedures, guidance documents and (application) forms. They often also have their own specific areas of expertise linked to the types of exports originating in their respective jurisdictions.

The Federal level (General Administration of Treasury), competent for derogations from financial sanctions, requires derogation requests to be sent by email to [email protected]. Its website sets out the information to be included in the derogations request.

For the Flemish Region, authorisation requests should be filed digitally through the Digitaal Loket of the Strategic Goods Control Unit. In a service level agreement, the Flemish Region has pledged to handle authorisation requests within 84 days if the ultimate decision lies with the Minister, and within 42 days if the ultimate decision lies with the Strategic Goods Control Unit.

For the Walloon Region, authorisation requests should be sent directly via email to the competent inspector of the Directory for the Handling of Arms Licences.

For the Brussel-Capital region, authorisation requests should be sent by mail or email to the Licensing Office. They do, however, provide an interactive module that enables applicants to easily check which authorisations they need and which documents must be submitted.

Approaching the authorities

To what extent is it possible to engage with the competent sanctions authorities to discuss licence applications or queries on economic and financial sanctions compliance?

The applicable legislation does not provide for any formal interaction or discussion process with the competent authorities. However, it is advisable and common practice to contact the competent authorities at an early stage even before submitting the authorisation request to provide all relevant information on the envisioned transaction.

Reporting requirements

What reporting requirements apply to businesses who hold assets frozen under sanctions?

All financial and non-financial institutions are required to verify whether they hold funds and/or assets on behalf of persons and entities listed under a sanctions regime as set out in the concerned regulation.

The guidelines issued by the NBB provide the following for financial institutions:

  • they may not enter into a relationship with a person or entity subject to a financial embargo or assets freezing measure;
  • they should freeze all assets of the listed customer;
  • they should immediately report to the Federal Public Service Finance – Treasury Department ([email protected]); and
  • they should review the risk profile of the listed customer and of the persons related to it and if necessary, report to the CTIF-CIF (Belgian Financial Intelligence Unit).

Law stated date

Correct on

Give the date on which the above content is accurate.

2 July 2021.