- What kinds of sanctions are in force?
- How do I get an overview of which sanctions are in place?
- How do I check if a person or entity is listed under a UN, EU or national sanctions regime?
- How can I keep updated on the latest UN, EU and national sanctions?
- How do I ensure effective sanctions implementation?
- What do I do if my organization is in possession of assets belonging to a person or entity who subsequently becomes listed?
- The Principle of Ownership and Control: How does one gauge ownership and control?
- Which equipment falls under an arms embargo?
- Can I import or export particular products from particular countries?
- Do I need to adhere to national sanctions issued by other countries?
- What are my reporting obligations?
- Where can I get more guidance?
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?
A good place to start to get an overview of applicable sanctions is to consult the EU Sanctions Map available on: https://www.sanctionsmap.eu/#/main
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 email@example.com. 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.
In case of doubt one may consult the Sanctions Monitoring Board on firstname.lastname@example.org.
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?
One stands to be guided by paragraphs 55 (a) and (b) of the Guidelines on implementation and Evaluation of Restrictive Measures (Sanctions) in the Framework of the EU Common Foreign and Security Policy. http://data.consilium.europa.eu/doc/document/ST-5664-2018-INIT/en/pdf
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:
a) The product is to be assessed so as to determine whether it falls under the scope of the arms embargo. To this end, the list of goods contained in the Common Military List is to be consulted through the following link https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ%3AJOC_2019_095_R_0001 or any updated version of the Common Military List thereafter.
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 email@example.com