On 19 June, the European Commission published an opinion (document C(2020) 4117) in response to a joint request by several national authorities of the Member States on the application of the financial measures referred to in Article 2 of Regulation (EU) No. 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, read in conjunction with Best Practices for the effective implementation of EU restrictive measures.
Studio Legale Padovan, from right to left Marco Padovan, Marco Zinzani
Some of the the key points highlighted by the Commission include:
- where a designated person controls an undesignated entity, the control shall be presumed to extend to all assets of the non-designated entity, which must be frozen to avoid the circumvention of sanctions, unless the entity in question demonstrates that its assets are not subject to the control of the designated entity;
- the assessment of the existence of a control situation by a designated entity over an undesignated entity and of which funds and economic resources to freeze is the responsibility of the competent national authorities, which will have to take into account the criteria listed in paragraph 63 of the Best Practices;
- the competent national authorities are called upon to publish their findings on the control relationship between designated persons and controlled entities and the assets to be frozen, and to inform each other and inform the Commission thereof;
- it is prohibited to make payments to the bank account of an undesignated entity held or controlled by a designated person, unless the payment is authorised by the national authority under one of the derogations provided for in the Regulations or unless it can reasonably be determined that the funds will not be made available to the designated person. Furthermore, EU banks may credit frozen accounts, provided that incoming funds are also subsequently frozen. Payments from frozen bank accounts of the entity are prohibited, unless otherwise authorised by the competent authority under one of the applicable derogations provided for in the Regulation. Payments from unfrozen accounts of the non-designated entity are allowed.
GET TO KNOW THE AUTHORS: Marco Padovan, Marco Zinzani
