On 21 March a new sanctions regime was imposed as regards certain Egyptian nationals and there were further amendments to the Libyan sanctions.
On 21 March 2011, the European Union adopted Council Regulation (EU) No 270/2011 ("Regulation") which placed restrictive measures on certain persons and entities identified as being responsible for the misappropriation of Egyptian state funds and persons and entities associated with them. The UK to give full effect to the EU Regulation enacted the Egypt (Asset Freezing) Regulations 2011 (2011/887) (the "UK Regulation"). The UK Regulation entered into force on 22 March.
The key provisions set out in the UK Regulation include:
- A person (“P”) must not deal with funds or economic resources belonging to, or owned, held or controlled by, a designated person if P knows, or has reasonable cause to suspect, that P is so dealing;
- A person (“P”) must not make funds or economic resources available, (1) directly or indirectly, to a designated person or (2) to any person for the benefit of a designated person, if P knows, or has reasonable cause to suspect, that P is so making funds or economic resources available. Funds or economic resources are made available for the benefit of the designated person only if that person thereby obtains, or is able to obtain, a significant financial benefit.
- No person may intentionally participate in activities knowing that the object or effect of them is (whether directly or indirectly) to circumvent any of the prohibitions, or to enable or facilitate the contravention of any such prohibition.
The Regulation states that it applies to nineteen designated persons including:
- Members of the Mubarak family including:
- Hosni Mubarak (former President);
- Suzanne Saleh Thabet (spouse of Mr Mubarak); and
- Alaa Mubarak and Gamal Mubarak (sons).
- Certain senior former officials in the former Mubarak-led government including in some case their spouses and children.
Companies, particularly financial institutions, should be aware that the sanctions regime has broad application beyond the designated persons. Article 2(1) of the EU Regulation states that the key provisions apply not only to the designated persons listed in the sanctions regime but also 'legal persons, entities and bodies associated with them'. Article 2(2) goes on to say that funds cannot be made available 'directly or indirectly'. As a result, firms should bear this in mind when looking at transactions which may involve entities which they believe or have reasonable cause to suspect may be associated with designated persons.
A copy of HM Treasury's notice is available here.
On 21 March, the EU amended the list of persons and entities subject to the asset freeze. This EU list was further amended on 23 March following a further UN Resolution on 17 March.
A link to copies of the relevant Regulations can be found here.
For advice on issues arising in relation to the sanctions regime against Egypt or Libya or elsewhere, please do not hesitate to contact a member of our team