Council Regulation (EU) 2018/647Show full title

Article 1

Regulation (EU) No 401/2013 is amended as follows:

(1)

Article 1 is replaced by the following:

‘Article 1

For the purposes of this Regulation, the following definitions apply:

(a)

“claim” means any claim, whether asserted by legal proceedings or not, made before or after the date of entry into force of this Regulation, under or in connection with a contract or transaction, and includes in particular:

(i)

a claim for performance of any obligation arising under or in connection with a contract or transaction;

(ii)

a claim for extension or payment of a bond, financial guarantee or indemnity of whatever form;

(iii)

a claim for compensation in respect of a contract or transaction;

(iv)

a counterclaim;

(v)

a claim for the recognition or enforcement, including by the procedure of exequatur, of a judgment, an arbitration award or an equivalent decision, wherever made or given;

(b)

“contract or transaction” means any transaction of whatever form and whatever the applicable law, whether comprising one or more contracts or similar obligations made between the same or different parties; for this purpose “contract” includes a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, and credit, whether legally independent or not, as well as any related provision arising under, or in connection with, the transaction;

(c)

“competent authorities” refers to the competent authorities of the Member States as identified on the websites listed in Annex II;

(d)

“economic resources” means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds, but may be used to obtain funds, goods or services;

(e)

“freezing of economic resources” means preventing the use of economic resources to obtain funds, goods or services in any way, including, but not limited to, by selling, hiring or mortgaging them;

(f)

“freezing of funds” means preventing any move, transfer, alteration, use of, access to, or dealing with funds in any way that would result in any change in their volume, amount, location, ownership, possession, character, destination or other change that would enable the funds to be used, including portfolio management;

(g)

“funds” means financial assets and benefits of every kind, including, but not limited to:

(i)

cash, cheques, claims on money, drafts, money orders and other payment instruments;

(ii)

deposits with financial institutions or other entities, balances on accounts, debts and debt obligations;

(iii)

publicly and privately traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivatives contracts;

(iv)

interest, dividends or other income on or value accruing from or generated by assets;

(v)

credit, right of set-off, guarantees, performance bonds or other financial commitments;

(vi)

letters of credit, bills of lading, bills of sale; and

(vii)

documents showing evidence of an interest in funds or financial resources;

(h)

“technical assistance” means any technical support related to repairs, development, manufacture, assembly, testing, maintenance, or any other technical service, and may take forms such as instruction, advice, training, transmission of working knowledge or skills or consulting services, including verbal forms of assistance;

(i)

“brokering services” means:

(i)

the negotiation or arrangement of transactions for the purchase, sale or supply of goods and technology from a third country to any other third country, or

(ii)

the selling or buying of goods and technology that are located in third countries for their transfer to another third country;

(j)

“import” means any entry of goods into the customs territory of the Union or other territories to which the Treaty applies, under the conditions laid down in Articles 349 and 355 thereof. It includes, within the meaning of Regulation (EU) No 952/2013 of the European Parliament and of the Council(1) laying down the Union Customs Code, placing in a free zone, placing under special procedure and release for free circulation, but it excludes transit or temporary storage;

(k)

“export” means any departure of goods from the customs territory of the Union or other territories to which the Treaty applies, under the conditions laid down in Articles 349 and 355 thereof. It includes, within the meaning of Regulation (EU) No 952/2013, the departure of goods that requires a customs declaration and the departure of goods after their storage in a free zone or after their placement under a special procedure, but it excludes transit or temporary storage;

(l)

“exporter” means any natural or legal person on whose behalf an export declaration is made, being the person who, at the time when the declaration is accepted, holds the contract with the consignee in the third country and has the power for determining the sending of the item out of the customs territory of the Union or other territories to which the Treaty applies;

(m)

“territory of the Union” means the territories of the Member States to which the Treaty is applicable, under the conditions laid down in the Treaty, including their airspace.’;

(2)

in Article 3, paragraphs 3 and 4 are deleted;

(3)

the following Articles are inserted:

‘Article 3a

1. It shall be prohibited to sell, supply, transfer or export, directly or indirectly, dual-use goods and technology as included in Annex I to Council Regulation (EC) No 428/2009(2), whether or not originating in the Union, to any natural or legal person, entity or body in Myanmar/Burma or for use in Myanmar/Burma, if those items are or may be intended, in their entirety or in part, for military use, military end-user or the Border Guard Police.

Where the end-user is the Myanmar's/Burma's military, any dual-use goods and technology procured by it shall be deemed to be for military use.

2. When deciding on requests for authorisations in accordance with Regulation (EC) No 428/2009, the competent authorities shall not grant an authorisation for exports to any natural or legal person, entity or body in Myanmar/Burma or for use in Myanmar/Burma, if they have reasonable grounds to believe that the end-user might be a military end-user, the Border Guard Police or that the goods might have a military end-use.

3. Exporters shall supply the competent authorities with all relevant information required for their application for an export authorisation.

4. It shall be prohibited:

(a) to provide technical assistance, brokering services or other services related to goods and technology referred to in paragraph 1 and to the provision, manufacture, maintenance and use of these goods and technology, directly or indirectly to any military end-user, the Border Guard Police or for military use in Myanmar/Burma;

(b) to provide financing or financial assistance related to goods and technology referred to in paragraph 1, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of these goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly to any military end-user, the Border Guard Police or for military use in Myanmar/Burma.

5. The prohibitions in paragraphs 1 and 4 shall be without prejudice to the execution of contracts concluded before 27 April 2018 or ancillary contracts necessary for the execution of such contracts.

6. Paragraph 1 shall not apply to protective clothing, including flak jackets and military helmets, temporarily exported to Myanmar/Burma by UN personnel, personnel of the EU or its Member States, representatives of the media and humanitarian and development workers and associated personnel for their personal use only.

Article 3b

1. It shall be prohibited to sell, supply, transfer or export, directly or indirectly, equipment, technology or software identified in Annex III, whether or not originating in the Union, to any person, entity or body in Myanmar/Burma or for use in Myanmar/Burma, unless the competent authority of the relevant Member State, as identified on the websites listed in Annex II, has given prior authorisation.

2. The competent authorities of the Member States, as identified on the websites listed in Annex II, shall not grant any authorisation under paragraph 1 if they have reasonable grounds to determine that the equipment, technology or software in question would be used for internal repression by the Government of Myanmar/Burma, public bodies, corporations or agencies, or any person or entity acting on their behalf or at their direction.

3. Annex III shall include equipment, technology or software intended primarily for use in the monitoring or interception of internet or telephone communications.

4. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under this Article, within four weeks of the authorisation.

Article 3c

1. Unless the competent authority of the relevant Member State, as identified on the websites listed in Annex II, has given prior authorisation in accordance with Article 3b, it shall be prohibited:

(a) to provide, directly or indirectly, technical assistance or brokering services related to the equipment, technology and software identified in Annex III, or related to the installation, provision, manufacture, maintenance and use of the equipment and technology identified in Annex III or to the provision, installation, operation or updating of any software identified in Annex III, to any person, entity or body in Myanmar/Burma or for use in Myanmar/Burma;

(b) to provide, directly or indirectly, financing or financial assistance related to the equipment, technology and software identified in Annex III to any person, entity or body in Myanmar/Burma or for use in Myanmar/Burma;

(c) to provide any telecommunication or internet monitoring or interception services of any kind to, or for the direct or indirect benefit of, Government of Myanmar/Burma, public bodies, corporations and agencies or any person or entity acting on their behalf or at their direction.

2. For the purposes of point (c) of paragraph 1, “telecommunication or internet monitoring or interception services” means those services that provide, in particular using equipment, technology or software as identified in Annex III, access to and delivery of a subject's incoming and outgoing telecommunications and call- associated data for the purpose of its extraction, decoding, recording, processing, analysis or storing, or any other related activity.’;

(4)

in Article 4, paragraph 1 is replaced by the following:

‘1. By way of derogation from Articles 2(1), 3(2), 3a(1) and 3a(4), and subject to Article 5, the competent authorities in the Member States, as indicated in the websites listed in Annex II, may authorise, under such conditions as they deem appropriate:

(a) the sale, supply, transfer or export of equipment which might be used for internal repression as listed in Annex I or dual-use goods and technology listed in Annex I to Regulation (EC) No 428/2009, intended solely for humanitarian or protective use, or for institution-building programmes of the United Nations and the European Union, or for European Union and United Nations crisis-management operations;

(b) the sale, supply, transfer or export of de-mining equipment and material for use in de-mining operations; and

(c) the provision of financing and financial assistance and technical assistance related to equipment, material, programmes and operations referred to in points (a) and (b).’;

(5)

the following Articles are inserted:

‘Article 4a

1. All funds and economic resources belonging to or owned, held or controlled by any natural or legal person, entity or body listed in Annex IV shall be frozen.

2. No funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies listed in Annex IV.

3. Annex IV shall include:

(a) natural persons from the Myanmar Armed Forces (Tatmadaw) and the Border Guard Police responsible for serious human rights violations in Myanmar/Burma;

(b) natural persons from the Myanmar Armed Forces (Tatmadaw) and the Border Guard Police responsible for obstructing the provision of humanitarian assistance to civilians in need;

(c) natural persons from the Myanmar Armed Forces (Tatmadaw) and the Border Guard Police responsible for obstructing the conduct of independent investigations into alleged serious human rights violations or abuses;

(d) natural or legal persons, entities or bodies associated with the natural persons referred to in points (a), (b) and (c).

4. Annex IV shall include the grounds for the listing of the persons, entities and bodies concerned.

5. Annex IV shall also include, where available, information necessary to identify the natural or legal persons, entities and bodies concerned. With regard to natural persons, such information may include names including aliases, date and place of birth, nationality, passport and ID card numbers, gender, address, if known, and function or profession. With regard to legal persons, entities and bodies, such information may include names, place and date of registration, registration number and place of business.

Article 4b

1. By way of derogation from Article 4a, the competent authorities of the Member States as identified on the websites listed in Annex II, may authorise the release of certain frozen funds or economic resources, or the making available of certain funds or economic resources, under such conditions as they deem appropriate, after having determined that the funds or economic resources are:

(a) necessary to satisfy the basic needs of natural and legal persons listed in Annex IV, and dependent family members of such natural persons, including payments for foodstuffs, rent or mortgage, medicines and medical treatment, taxes, insurance premiums and public utility charges;

(b) intended exclusively for payment of reasonable professional fees or reimbursement of incurred expenses associated with the provision of legal services;

(c) intended exclusively for payment of fees or service charges for routine holding or maintenance of frozen funds or economic resources;

(d) necessary for extraordinary expenses, provided that the relevant competent authority has notified the grounds on which it considers that a specific authorisation should be granted to the competent authorities of the other Member States and to the Commission at least two weeks prior to authorisation; or

(e) to be paid into or from an account of a diplomatic or consular mission or an international organisation enjoying immunities in accordance with international law, insofar as such payments are intended to be used for official purposes of the diplomatic or consular mission or international organisation.

2. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 1 within four weeks following the authorisation.

Article 4c

1. By way of derogation from Article 4a, the competent authorities in the Member States as identified on the websites listed in Annex II, may authorise the release of certain frozen funds or economic resources if the following conditions are met:

(a) the funds or economic resources are subject to an arbitral decision rendered prior to the date on which the natural or legal person, entity or body referred to in Article 4a was included in Annex IV, or of a judicial or administrative decision rendered in the Union, or a judicial decision enforceable in the Member State concerned, prior to, on or after that date;

(b) the funds or economic resources will be used exclusively to satisfy claims secured by such a decision or recognised as valid in such a decision, within the limits set by applicable laws and regulations governing the rights of persons having such claims;

(c) the decision is not for the benefit of a natural or legal person, entity or body listed in Annex IV; and

(d) recognising the decision is not contrary to public policy in the Member State concerned.

2. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 1 within four weeks of the authorisation.

Article 4d

1. By way of derogation from Article 4a and provided that a payment by a natural or legal person, entity or body listed in Annex IV is due under a contract or agreement that was concluded by, or an obligation that arose for, the natural or legal person, entity or body concerned before the date on which that natural or legal person, entity or body was included in Annex IV, the competent authorities of the Member States may authorise, under such conditions as they deem appropriate, the release of certain frozen funds or economic resources, provided that the competent authority concerned has determined that:

(a) the funds or economic resources are to be used for a payment by a natural or legal person, entity or body listed in Annex IV;

(b) the payment is not in breach of Article 4a(2)

2. The Member State concerned shall inform the other Member States and the Commission of any authorisation granted under paragraph 1 within four weeks of the authorisation.

3. Article 4a(2) shall not prevent the crediting of the frozen accounts by financial or credit institutions that receive funds transferred by third parties to the account of a listed natural or legal person, entity or body, provided that any additions to such accounts will also be frozen. The financial or credit institution shall inform the relevant competent authority about any such transaction without delay.

4. Provided that any such interest, other earnings and payments are frozen in accordance with Article 4a, Article 4a(2) shall not apply to the addition to frozen accounts of:

(a) interest or other earnings on those accounts;

(b) payments due under contracts, agreements or obligations that were concluded or arose before the date on which the natural or legal person, entity or body referred to in Article 4a was included in Annex IV; or

(c) payments due under judicial, administrative or arbitral decisions rendered in a Member State or enforceable in the Member State concerned.

Article 4e

1. Without prejudice to the applicable rules concerning reporting, confidentiality and professional secrecy, natural and legal persons, entities and bodies shall:

(a) supply immediately any information which would facilitate compliance with this Regulation, such as information on accounts and amounts frozen in accordance with Article 4a, to the competent authority of the Member State where they are resident or located, and shall transmit such information, directly or through the Member State, to the Commission; and

(b) cooperate with the competent authority in any verification of the information referred to in point (a).

2. Any additional information received directly by the Commission shall be made available to the Member States.

3. Any information provided or received in accordance with this Article shall be used only for the purposes for which it was provided or received.

Article 4f

1. The freezing of funds and economic resources or the refusal to make funds or economic resources available, carried out in good faith on the basis that such action is in accordance with this Regulation, shall not give rise to liability of any kind on the part of the natural or legal person or entity or body implementing it, or its directors or employees, unless it is proved that the funds and economic resources were frozen or withheld as a result of negligence.

2. Actions by natural or legal persons, entities or bodies shall not give rise to any liability of any kind on their part if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in this Regulation.

Article 4g

It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the measures laid down in this Regulation.

Article 4h

1. No claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under this Regulation, including claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, in particular a claim for extension or payment of a bond, guarantee or indemnity, in particular a financial guarantee or financial indemnity, of whatever form, shall be satisfied, if they are made by:

(a) designated natural or legal persons, entities or bodies listed in Annex IV;

(b) any natural or legal person, entity or body acting through or on behalf of one of the persons, entities or bodies referred to in point (a).

2. In any proceedings for the enforcement of a claim, the onus of proving that satisfying the claim is not prohibited by paragraph 1 shall be on the natural or legal person, entity or body seeking the enforcement of that claim.

3. This Article is without prejudice to the right of the natural or legal persons, entities and bodies referred to in paragraph 1 to judicial review of the legality of the non-performance of contractual obligations in accordance with this Regulation.

Article 4i

1. Where the Council decides to subject a natural or legal person, entity or body to the measures referred to in Article 4a, it shall amend Annex IV accordingly.

2. The Council shall communicate its decision, including the grounds for listing, to the natural or legal person, entity or body referred to in paragraph 1, either directly, if the address is known, or through the publication of a notice, providing such natural or legal person, entity or body with an opportunity to present observations.

3. Where observations are submitted, or where substantial new evidence is presented, the Council shall review its decision and inform the natural or legal person, entity or body accordingly.

4. The list in Annex IV shall be reviewed at regular intervals and at least every 12 months.’

(6)

Article 6 is replaced by the following:

‘Article 6

1. The Commission and Member States shall inform each other of the measures taken under this Regulation and share any other relevant information at their disposal in connection with this Regulation, in particular information concerning:

(a) funds frozen under Article 4a and authorisations granted under Articles 3a, 3b, 3c, 4b, 4c and 4d;

(b) violation and enforcement problems and judgments handed down by national courts.

2. The Member States shall immediately inform each other and the Commission of any other relevant information at their disposal which might affect the effective implementation of this Regulation.’;

(7)

the text set out in Annex I to this Regulation is added as Annex III;

(8)

the text set out in Annex II to this Regulation is added as Annex IV.

Article 2

This Regulation shall enter into force on the day of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 26 April 2018.

For the Council

The President

E. Zaharieva