1. What kinds of sanctions are in force?
The
types of applicable sanctions and clauses can be found in different regimes. It
is crucial that each regime is examined on its own merits since there may be
significant differences between one regime and another.
Sanctions
normally refer to the following restrictions:
a) Restrictions
In Trade in certain goods or services or both :
The
most common example is an arms embargo which prohibits the import and export of
military items to or from the sanctioned country.
- Restriction in trade of dual use goods – Goods
which are generally used for civilian purposes, but which may have a military
application; or
- Restriction in Goods related to a particular
industry e.g. the oil industry, or that can be used for a nuclear weapons
programme.
b) Restrictions
on services:
This may include
restrictions on the provision of insurance, services in relation to the oil
industry, restrictions on use of means of transport, restrictions on access to
capital markets and the provision of financial services; restrictions on use of
ports and tourism.
c) The
Designation of individuals or entities:
Listed
individuals and entities are usually subject to an asset freeze, the
prohibition to make available resources. Travel bans are also applicable in the
case of listed persons.
2. How
do I get an overview of which sanctions are in place?
The EU sanctions
map is kept updated by the EU Commission and is an easy to use tool which gives
an overview of the restrictions in place. The site also indicates whether a
particular regime is a UN sanctions regime or an EU sanctions regime or both a
UN and EU sanctions regime. It is to be kept in mind that each sanctions regime
differs from the other and that every regime is to be considered on its own
merits since it will be subject to its particular rules.
3. How
do I check if a person or entity is listed under a UN, EU or national sanctions
regime?
Both the UN and the EU have consolidated lists of
persons subject to financial sanctions which are constantly updated. These can
be viewed by accessing the following links below:
UN Consolidated Sanctions
EU Financial Sanctions Database
No person or entity has yet been listed under national
sanctions however should there be such listings, the list of persons can be
consulted on the SMB’s website.
4. How
can I keep updated on the latest UN, EU and national sanctions?
The Sanctions Monitoring Board sends a sanctions
update to all persons that have subscribed to its mailing list. In order to
subscribe to the list, one can send an email to the Board on sanctions.mfea@gov.mt. Information on such updates can also be viewed on
this website.
5. How
do I ensure effective sanctions implementation?
Sanctions implementation involves constant monitoring
of applicable sanctions and it is therefore necessary to have systems in place
as laid down under Article 17(6) of the National Interest (Enabling Powers)
Act. Individuals are to check that the transaction or the financial aspect of
such transactions are in line with applicable sanctions and that no person or
entity involved in such transaction (be it the seller, receiver or end user) is
a listed person or entity.
6. What
do I do if my organization is in possession of assets belonging to a person or
entity who subsequently becomes listed?
Article 17(1) of the National Interest (Enabling
Powers) Act clearly states that a upon publication of a sanctions measure by
the UN, EU or national regulations, which imposes a freezing measure on the
property of a person or entity, such measure is tantamount to a freezing order
having the force of law. In this case, the organization needs to freeze the
property immediately and to inform the Sanctions Monitoring Board of the of the
actions taken in relation to such property.
7. The
Principle of Ownership and Control: How does one gauge ownership and control?
For ownership, the criterion to be taken into account
when assessing whether a legal person or entity is owned by another designated person
or entity is the possession of more than 50% of the proprietary rights of an
entity or having majority interest in it.
For control, this is to be assessed on a case-by-case
basis. Some non-exhaustive indicators as stated in the guidelines are as
follows:
(a) having the
right or exercising the power to appoint or remove a majority of the members of
the administrative, management or supervisory body of such legal person or
entity;
(b) having
appointed solely as a result of the exercise of one's voting rights a majority
of the members of the administrative, management or supervisory bodies of a
legal person or entity who have held office during the present and previous
financial year;
(c) controlling
alone, pursuant to an agreement with other shareholders in or members of a
legal person or entity, a majority of shareholders' or members' voting rights
in that legal person or entity;
(d) having the
right to exercise a dominant influence over a legal person or entity, pursuant
to an agreement entered into with that legal person or entity, or to a
provision in its Memorandum or Articles of Association, where the law governing
that legal person or entity permits its being subject to such agreement or
provision;
(e) having the
power to exercise the right to exercise a dominant influence referred to in
point (d), without being the holder of that right19;
(f) having the
right to use all or part of the assets of a legal person or entity;
(g) managing the
business of a legal person or entity on a unified basis, while publishing
consolidated accounts;
(h) sharing
jointly and severally the financial liabilities of a legal person or entity, or
guaranteeing them.
Article 66 of the EU Best Practices for the effective
implementation of restrictive measures
moreover states that if
the ownership or control is established, the making available of funds or
economic resources to non-listed legal persons or entities which are owned or
controlled by a listed person or entity will in principle be considered as
making them indirectly available to the listed persons or entities, unless it
can be reasonably determined, on a case-by-case basis that the funds or
economic resources concerned will not be used by or be for the benefit of that
listed person or entity. This can be accessed through the following link:
http://data.consilium.europa.eu/doc/document/ST-8519-2018-INIT/en/pdf
8. Which
equipment falls under an arms embargo?
Paragraph 63 of the Guidelines on implementation and Evaluation of Restrictive Measures
(Sanctions) in the Framework of the EU Common Foreign and Security Policy, states
that unless otherwise specified, arms embargoes
should be interpreted as covering at least all goods and technology on the EU
Common List of Military Equipment.
This information can be accessed through the following
link
The Common Military List can be accessed as per link
hereunder:
9. Can I import or export particular products from
particular countries?
At the outset, individuals are
to check if restrictive measures are in place in respect of the particular
country. If applicable sanctions are in place, individuals must check if the
product is listed amongst the prohibited products in the annexes to the
relevant Regulation.
In case of any doubts, the
Sanctions Monitoring Board welcomes any enquiries for further clarification as
to whether the exports/imports of particular goods are authorized, or with an
authorization to export/import these goods, if this is allowed under applicable
legislation.
In order to obtain an
authorization to export/import a product subject to a specific authorization
requirement under restrictive measures, subject persons are to contact the SMB
as the competent authority in Malta.
Subject persons must check the
following criterion in relation to the product concerned:
b) The product is to be further checked against the
products listed on the dual use goods list. For this purpose, individuals are
invited to consult Regulation (EC) No 428/2009 on dual use items setting up a
regime for control of exports of items that have a dual (civilian and military)
use. The latest version of this Regulation is available here: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32009R0428
c) Subject persons must additionally ensure that the
persons, groups or entities they are trading with are not listed, or that the
transaction would not benefit a listed person directly or indirectly.
10. Do
I need to adhere to national sanctions issued by other countries?
Malta is bound by
all UN, EU and national sanctions issued under the National Interest (Enabling
Powers) Act. National sanctions issued by other states are not applicable in
Malta. Nevertheless, the Sanctions Monitoring Board advises caution in this
regard given the possible risk of secondary effects of such sanctions or the
risk of blacklisting by the state that issued the sanctions. It is also necessary to make the necessary
due diligence to find out the reason why a person or entity has become listed
and to take such considerations into account as to whether one should continue
a business relationship.
11. What
are my reporting obligations?
Subject
persons are to immediately inform the Board in the case of a sanctions hit and
the resultant measures taken by reporting entity. Reporting to the Board must
also be done in cases of attempted transactions. Failure to do so constitutes
an offence. Should any situation be encountered which is in violation of
sanctions, whether directly or indirectly, there is an obligation to stop any
transaction from going through, freeze any assets and inform the SMB.
Supporting documentation is to also be provided. Communication with the SMB
should be made effected without delay and via email or in writing on the
contact details provided on the SMB webpage
12. Where can I get more guidance?
The
Sanctions Monitoring Board has the power to take decisions, make
recommendations, grant authorizations, issue rulings and refer to relevant
authorities for any action, assistance or information that subject persons may
require. Alternatively, subject persons may send their queries to the Board on sanctions.smb@gov.mt.