Council Regulation (EC) No 2580/2001

Summary

This is EU Council Regulation (EC) No 2580/2001, which imposes an asset freeze and financial services ban on named persons, groups and entities linked to terrorism. It is an EU legal instrument (not Guernsey-made law) that GFSC lists as part of the legislative and guidance material relevant to AML/CFT and sanctions compliance. It requires the freezing of funds and economic resources belonging to listed persons/entities and bans making funds or financial services available to them, subject to specific narrow exceptions.

• Asset freeze: All funds, financial assets and economic resources belonging to, owned by, or held by a person, group or entity on the EU list must be frozen, and none may be made available directly or indirectly to them.
• Financial services ban: Providing financial services (banking, insurance, asset management, payment services, etc., as broadly defined in Article 1) to or for the benefit of a listed person or entity is prohibited, subject to Articles 5 and 6 exceptions.
• Anti circumvention: Knowingly and intentionally participating in activities designed to circumvent the freeze or the financial services ban is prohibited, and any information suggesting circumvention must be reported to the relevant EU Member State competent authority and the Commission.
• Reporting and cooperation: Banks, other financial institutions, insurance companies and other bodies and persons must immediately provide information facilitating compliance (e.g. frozen accounts and amounts, transactions under exceptions) to the competent authority of the EU Member State where they are located, and cooperate with verification of that information.
• Limited exceptions: Competent authorities of EU Member States may authorise use of frozen funds for essential human needs, taxes, utility payments, bank charges, or pre-existing contractual obligations, and may authorise unfreezing or provision of funds/services in the Community interest, subject to a consultation and comment process with other Member States, the Council and the Commission.
• Sanctions: Each EU Member State must determine effective, proportionate and dissuasive sanctions for infringement of the Regulation.

The Regulation is directly applicable within EU Member States' territory, to EU nationals, and to legal persons incorporated or doing business within the Community; its Annex lists the competent national authorities in each (then) EU Member State responsible for administering it. As an EU regulation, its direct legal force in Guernsey is not established by this text itself, and readers should confirm how (or whether) it has been given effect locally through Guernsey sanctions legislation.

Key obligations

• Freeze all funds, other financial assets and economic resources belonging to, owned by or held by persons, groups or entities on the Article 2(3) list
• Do not make funds, financial assets or economic resources available, directly or indirectly, to listed persons, groups or entities
• Do not provide financial services to or for the benefit of listed persons, groups or entities, except as permitted under Articles 5 and 6
• Immediately provide the competent authority (and, through it, the Commission) with information facilitating compliance, such as frozen accounts, amounts frozen, and transactions executed under exceptions
• Cooperate with competent authorities in verifying such information
• Notify competent authorities and the Commission of any information indicating that the Regulation is being or has been circumvented
• Do not knowingly and intentionally participate in activities designed to circumvent the asset freeze or financial services ban

Applies to

banks, other financial institutions, insurance companies, other bodies and persons handling funds or financial services, EU Member State competent authorities

Deadlines

• day of publication in the Official Journal (28.12.2001): Regulation enters into force
• within one year from entry into force: European Commission must present a report on the impact of the Regulation and propose amendments if necessary
• within two weeks: Other Member States, the Council and the Commission may submit comments on a proposed specific authorisation before the competent authority grants it