The European Union applies sanctions or restrictive measures in pursuit of the specific objectives of the Common Foreign and Security Policy (CFSP) as set out in Article 11 of the Treaty on European Union, namely:
• To safeguard the common values, fundamental interests, independence and integrity of the Union in conformity with the principles of the United Nations Charter;
• To strengthen the security of the Union in all ways;
• To preserve peace and strengthen international security, in accordance with the principles of the United Nations Charter and the Helsinki Final Act, and the objectives of the Paris Charter , including those on external borders;
• To promote international cooperation;
• To develop and consolidate democracy and the rule of law and respect for human rights and fundamental freedoms.
Article 301 of the Treaty establishing the European Community provides the following:
“Where it is provided, in a common position or in a joint action adopted according to the provisions of the Treaty on European Union relating to the common foreign and security policy, for an action by the Community to interrupt or to reduce, in part or completely, economic relations with one or more third countries, the Council shall take the necessary urgent measures. The Council shall act by a qualified majority on a proposal from the Commission.”
The EC’s “acquis communautaire” applies to the whole of Cyprus under its de facto control. In addition, Cyprus is required to comply with the Union’s CFSP. Application of the “acquis” and CFSP means that Cyprus fully implements all sanctions, asset freezing policies and related laws adopted by the European Union.
The Council of the European Union (‘EU’), following its’ condemnation on 20 February 2014 of all use of violence in Ukraine, calling for an immediate end to the violence in Ukraine, and full respect for human rights and fundamental freedoms, adopted Decision 2014/145/CFSP on 17 March 2014. Decision 2014/145/CFSP provides for the freezing of funds and economic resources of certain persons identified as responsible for the misappropriation of Ukrainian State funds and persons responsible for human rights violations in Ukraine, and natural or legal persons, entities or bodies associated with them, with a view to consolidating and supporting the rule of law and respect for human rights in Ukraine. Those persons, entities and bodies are listed in the Annex to that Decision.
The Council further adopted, also on 17 March 2014, Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures directed against certain persons, entities and bodies in view of the situation in Ukraine, with a view to ensuring their uniform application by economic operators in all Member States, regulatory action at the level of the Union is necessary in order to implement them.
Pursuant to Article 2 (1) of Regulation 269/2014, all funds and economic resources belonging to, owned, held or controlled by any natural persons or natural or legal persons, entities or bodies associated with them as listed in the said regulation shall be frozen.
Pursuant to article 2 (2) of Regulation 269/2014, no funds or economic resources shall be made available, directly or indirectly, to or for the benefit of natural persons or natural or legal persons, entities or bodies associated with them listed in the Regulation. Also article 9 of the Regulation provides that it shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the measures referred to in article 2.
The financial sanctions imposed under the Regulation include an asset freezing regime in relation to two elements:
• A prohibition on dealing with the funds or economic resources belonging to or owned, held or controlled by a designated person, and
• A prohibition on making funds or economic resources available, directly or indirectly, to, or for the benefit of, a designated person.
Funds refers to financial assets and benefits of every kind, including for example, cash, cheques, money orders and other payment instruments as well as deposits, securities and other financial assets.
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.
Article 15 of the Regulation provides that the EU member states should lay down rules on penalties applicable to infringements of the provisions of the Regulation and to take all necessary measures for the implementation of the rules.
According to Articles 136 and 137 of the Criminal Code of Cyprus Cap 154, the violation of EC / UN sanctions and EU restrictions is a criminal offense. In detail such articles provide the following:
a) Article 136: every person who wilfully disobeys any law by doing any act which it forbids, or my omitting to do any act which it requires to be done, and which concerns the public or any part of the public, is guilty of a misdemeanor and is liable, unless it is appears from the Law that it was the intention of the legislature to provide for some other penalty for such disobedience, to imprisonment for a term not exceeding 2 years or to a fine not exceeding thousand five hundred pounds or both.
b) Article 137: Everyone who disobeys any order, warrant or command duly made, issued or given by any Court, officer or person acting in any public capacity and duly authorised in that behalf is guilty of a misdemeanor and is liable, unless any other penalty or mode of proceeding is expressly prescribed in respect of such disobedience, to imprisonment for 2 years.
It is important to note that a person does not commit an offence if he did not know and had no reasonable cause to suspect that the funds, economic resources or financial services were being made available, directly or indirectly, to or for the benefit of a designated person.