Key takeaway #1
The EU measures affect companies that provide any support to the manufacturing of UAVs, both technical, including intellectual property rights and trade secrets, and financial.
Key takeaway #2
These sanctions are another EU’s step to enlarge the scope of its restrictive measures in relation to Russia’s invasion of Ukraine.
Key takeaway #3
The EU sends a clear signal that external military support to Russia may be punished.
On July 25, 2023, the EU published in its Official Journal two instruments aimed to strengthen the restrictive measures in the context of Russian-Ukrainian war:
Council Decision (CFSP) 2023/1532 of 20 July 2023 concerning restrictive measures in view of Iran’s military support to Russia’s war of aggression against Ukraine; came into force on July 26, 2023
Council Regulation (EU) 2023/1529 of 20 July 2023 concerning restrictive measures in view of Iran’s military support of Russia’s war of aggression against Ukraine; came into force on July 26, 2023
Such measures aim to tackle the manufacturing and delivery of Iranian Unmanned Aerial Vehicles (UAVs) used in combat by Russian forces, and thus weaken Iran’s support to Russia.
The Council Decision 2023/1532 prohibits the sale, supply, transfer or export, directly or indirectly, of goods and technology which might contribute to Iran’s capability to manufacture UAVs, whether or not originating in the Union, to any natural or legal person, entity, or body in Iran or for use in Iran. The prohibited activities include technical assistance, brokering services or other relevant services, financing or financial assistance, as well as sale, licensing, or transfer in any other way intellectual property rights or trade secrets as well as granting rights to access or re-use any material or information relating to the production of UAVs.
The Decision bans entry into, or transit through, territories of EU of natural persons who are responsible for, supporting, or involved in Iran’s UAV programme, and natural persons associated with them. Certain exemptions are envisaged, such as where it is justified on grounds of urgent humanitarian needs, or on grounds of attendance at certain intergovernmental meetings.
The Decision also provides for the freezing of funds and economic resources and a prohibition on making funds and economic resources available to natural and legal persons, entities, or bodies responsible for, supporting or involved in Iran’s UAV programme and the persons, entities, and bodies subject to those restrictive measures.
All funds and economic resources belonging to or controlled by the listed persons and entities should be frozen. However, some funds may be released, for instance money to satisfy basic needs, pay reasonable professional fees or legal services expenses, cover justified extraordinary expenses, etc. The release of funds is subject to the authorization granted by the Member States.
Interestingly, Article 9 obliges the EU to encourage third States to adopt restrictive measures similar to those provided for in this Decision.
The Decision shall apply until July 27, 2024 and shall be kept under constant review, and amended as appropriate. Prohibitions shall not apply until October 27, 2023 to obligations arising from a contract concluded before July 26, 2023, or ancillary contracts necessary for the execution of such a contract.
The Council Regulation (EU) 2023/1529 builds upon the above-referenced Council Decision. It specifies relevant definitions such as brokering services, technical assistance, financing or financial assistance, funds, and others. The Council Regulation is of the similar scope as the Decision.
The Regulation additionally sets forth the derogation for medical or pharmaceutical purposes, humanitarian purposes, health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or on the environment, or as a response to natural disasters. As is the case with the Decision, derogation authorizations are granted by EU Member States.
In both the Decision and the Regulation, prohibitions do not apply to funds or economic resources made available by organisations and agencies which are pillar-assessed by the Union and with which the Union has signed a financial framework partnership agreement on the basis of which the organisations and agencies act as humanitarian partners of the Union, if such funds or economic resources are necessary for exclusively humanitarian purposes in Iran. Otherwise, the competent authorities may grant specific or general authorisations to release certain frozen funds or economic resources or to make available certain funds or economic resources exclusively for humanitarian purposes.
Similarly, the prohibitions under the Regulation shall not apply until October 27, 2023 to obligations arising from a contract concluded before July 26, 2023, or ancillary contracts necessary for the execution of such a contract.
Member States will develop rules on the penalties for infringements of the Regulation and will take all measures necessary to ensure that the provisions are effectively implemented. The penalties must be effective, proportionate, and dissuasive.
In order to cover circumvention, the Regulation forbids participation, knowingly or intentionally, in activities which aim at circumventing the prohibitions under the Regulation.
In addition, there are obligations imposed on the listed persons or entities:
report within six weeks from the date of listing funds or economic resources within the jurisdiction of a Member State belonging to, owned, held, or controlled by them, to the competent authorities of the Member State in which those funds or economic resources are located; and
cooperate with the competent authorities concerned in the verification of such information.
Territorial scope of application:
Territory of the Union, including its airspace.
On board any aircraft or vessel under the jurisdiction of a Member State.
Any natural person inside or outside the territory of the Union who is a national of a Member State.
Any legal person, entity, or body, inside or outside the territory of the Union, which is incorporated or constituted under the law of a Member State.
Any legal person, entity, or body in respect of any business done in whole or in part within the Union.
Source » lexology