Last updated 12 March 2012

Note: The sanctions implemented by the EU in January 2011 have been gradually reduced in scope but restrictions still remain in place for 15 individuals.

On 27 June 2011, The Council of the European Union decided with EU Council Implementing Decision 2011/376/CFSP to lift the restrictions on the last three entities subject to the EU assets freeze, in order to support the country's economic recovery.

On 22 September 2011, Council Implementing Regulation 949/2011 removed a further 13 individuals.

On 10 February 2012 Council Implementing Regulation 113/2012 removed a further 30 individuals, leaving sanctions in place against 78 individuals.

On 8 March 2012, Council Implementing Regulation 193/2012 removed another 63 individuals, leaving 15 individuals subject to sanctions.

The commentary and Regulations referred to below must therefore be read in the light of the above.

On 30 April 2011, EU Council Implementing Regulation dated 29 April came into force, removing a further six entities (identified in the Annex to the Regulation) from the list of parties subject to sanctions. The list of 121 individuals and 3 entities subject to EU Sanctions can be found on the list maintained by the UK Treasury last updated on 3 May 2011.

On 12 April 2011, EU Council Implementing Regulation 348/2011 dated 8 April 2011, came into force, removing the following from the list of entities subject to sanctions:

1. SIR (Ivorian Refining Company)
2. Autonomous Port of Abidjan
3. Autonomous Port of San Pedro
4. CGFCC (Coffee and Cocoa Trade Management Committee)

EU Council Regulation 330/2011 dated 6 April 2011 added a further 27 individuals to the list of persons designated under Council Regulation 560/2005 and made a number of other adjustments.

Introduction

The Council of the European Union issued Regulation 25/2011 (the “Regulation”) against certain persons and entities, in view of the situation in the Ivory Coast, which was published and entered into force on 14 January 2011. The Regulation put restrictions on transactions with Ivory Coast which were highly relevant for owners with vessels calling at ports in Ivory Coast, including Abidjan and San Pedro. However, many of the restrictions were removed in April after the Outtara regime took over control. The previous restrictions were found in Council Regulation 560/2005 as well as UN Security Council Resolution 1572 (2004).

Norway did not adopted the Regulation.

Scope of Application

As set out in Article 13, the Regulation applies:

(a) within the territory of the Union, including its airspace;
(b) on board any aircraft or any vessel under the jurisdiction of a Member State;
(c) to any person inside or outside the territory of the Union who is a national of a Member State;
(d) to any legal person, entity or body which is incorporated or constituted under the law of a Member State;
(e) to any legal person, entity or body in respect of any business done in whole or in part within the Union.

Restrictions on payments etc.

Article 2.2 of the Regulation states as follows:

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

Annex IA to the Regulation includes the National Petroleum Operations Company of Côte D’Ivoire (PETROCI), the Ivorian Refining Company (SIR) as well as the Port of Abidjan and Port of San Pedro. Hence, payments of port dues and other amounts to these ports will according to the Regulation not be permitted. Economic resources is defined broadly as “assets of every kind, whether tangible or intangible, moveable or immovable” and the Regulation encompasses payments made through local agents.

Exclusions

Article 3.3 of the Regulation contains an exclusion that individual members states in the EU may permit payments, if “the funds or economic resources are necessary for extraordinary expenses”.

We understand that several EU jurisdictions adopted a practical approach for intermediary measures.

Provision of Security such as LOUs, and Payments

As stated above, the Regulation is drafted in broad terms, and SKULD may therefore not be in a position to provide security for, or make payments on, claims made by any of the persons or entities listed in Annex I or Annex IA of the Regulation.

Liability, penalties etc.

The rules on enforcement and liability found in Council Regulation 560/2005 have not been amended with the latest restrictions. Hence, Article 9 of the 2005 regulation states that a party who, due to the Regulation, and acting in good faith, refuses to make a payment or other transaction, shall not be under any kind of liability. According to Article 12 of the 2005 regulation, it is left for each member state to lay down rules on penalties for violation of the Regulation.

For further information, please see the UK Treasury Guidance as set out in the Financial Sanctions Notices dated 17 January 2011, 12 April 2011 and 26 September 2011.

See also EU Council Implementation Regulation 85/2011 of 31 Jan 2011