International financial sanctions

Introduction

© Freepic / SIP

 

Financial sanctions are restrictive measures in financial matters taken against countries, natural and legal persons, entities or groups in order to bring about a change in the policy (domestic and foreign) or conduct of those targeted.

The Ministry of Finance is the competent authority for all matters relating to the implementation of financial restrictive measures from those targeted by these measures as well as from those called upon to apply them.

International financial sanctions in the context of the fight against terrorist financing

National framework

At national level, the Law of 19 December 2020 concerning the implementation of restrictive measures in financial matters (“Law of 19 December 2020”) defines the legal framework regarding the implementation of financial sanctions.

The designation of countries, natural and legal persons, entities or groups targeted by an annex to legal act of the European Union (“EU”) or of the United Nations (“UN”) and the determination of applicable restrictive measures in financial matters are made automatically by reference to this list (article 4(2) of the Law of 19 December 2020). The UN designations applicable in Luxembourg by virtue of the Law of 19 December 2020 can be consulted here.

NB: The UN designations prior the entry into force of the Law of 19 December 2020 can be consulted here.

The resolutions, legal acts and regulations referred to by the Law of 19 December 2020 may include the following measures against the targeted persons, entities or groups:

(a)   The prohibition or restriction of financial activities of any kind;

(b)  The prohibition or restriction on the provision of financial services, technical assistance, training or advice in relation to a State, natural or legal person, entity or group referred to in this law; or

(c)   The freezing of funds, assets or other economic resources owned or controlled, directly, indirectly or jointly, with or by a person, entity or group referred to in this law or by a person acting on their behalf or at their direction.

The funds, assets and other economic resources owned or controlled, directly or indirectly or jointly, with or by the above-mentioned persons, entities or groups are thus frozen.

The adherence to the restrictive measures is a legal obligation that does not only apply to the professionals of the financial sector but to all Luxembourgish natural and legal persons, residing or operating in or through the Grand Duché of Luxembourg territory or abroad; to legal persons having their head office, or a permanent establishment or their center of main interests in the Grand Duché of Luxembourg territory and that operate in or through the Grand Duché of Luxembourg or abroad; to branches of Luxembourg legal persons as well as to branches of foreign legal persons established in Luxembourg; and to all other natural or legal persons operating in the Grand Duché of Luxembourg territory (Art.3 of the Law of 19 December 2020).

The Minister of Finance is competent to deal with questions regarding the implementation of financial restrictive measures from those targeted by these measures as well as those called upon to apply them. Any questions regarding homonyms and unintended consequences of the financial restrictive measures on assets should be send to:

  • By post mail to: Ministère des Finances, 3 Rue de la Congrégation, L-1352 Luxembourg; or
  • By email to sanctions@fi.etat.lu

The Minister of Finance is also competent to exceptionally grant authorizations exempting from the imposed prohibitions and restrictive measures. Such authorization can be granted if the UN resolutions, EU regulations and Grand Ducal regulation provide for it and in accordance with the conditions laid down therein.

In accordance with the article 6(1) of the Law, credit institutions, professionals of the financial sector (“PSF”), financial institutions, insurance companies, and any other natural or legal person obliged to comply with the financial restrictive measures, shall inform the Ministry of Finance in writing at one of the above mentioned addresses of the execution of each prohibition or restrictive measure against a designated country, person, entity or group.

International Framework (EU / UN)

A - Persons, entities and groups targeted by EU regulations, directly applicable to Luxembourg

 

UNSC resolutions

Content

Transposition

UNSC Resolution 1988 (2011), as amended

Reiterates the ‘Afghanistan’ section of UNSC Resolution 1267 (1999)

 

Member States are to freeze without delay the funds and other financial assets or economic resources of the listed individuals and/or entities.

Regulation (EU) 753/2011 of 1st August 2011

Automatic transposition allowed by the Law of 19 December 2020                                                                                                

 

 

 

UNSC Resolution 1989 (2011), as amended

Reiterates the ‘ISIL (Da’esh), Al-Qaida’ section of UNSC Resolution 1267 (1999)

 

Member States are to freeze without delay the funds and other financial assets or economic resources of the listed individuals and/or entities.

Regulation (EU) 881/2002 of 27 May 2002

Automatic transposition allowed by the Law of 19 December 2020

 

 

 

UNSC Resolution 1373 (2001)

Member states are required, among other things, to implement a framework enabling the freezing of assets at national level.

2001/931/CFSP of 27 December 2001

Regulation (EU) 2580/2001 of 27 December 2001

Law of 19 December 2020

 

 

 

EU Regulations imposing additional restrictive measures

 

 

Council Regulation (EU) 2016/1686 of 20 September 2016 imposing additional restrictive measures directed against ISIL (Da'esh) and Al-Qaeda and natural and legal persons, entities or bodies associated with them

Travel ban on individuals and asset freeze on individuals and entities that are identified as being associated with ISIL (Da'esh)/ Al-Qaida.

Law of 19 December 2020

 

B - Requests for de-listing

 

Existing legal texts

Delisting procedure

Who to contact

Regulation (EU) and Council Decision

x

EU Council

General Secretariat

175, rue de la Loi

B-1048 Brussels – Belgium

sanctions@consilium.europa.eu

 

Specific case (Regulation (EU) N°881/2002 of 27 May 2002, Article 7 and 7a) :

European Commission

‘Restrictive measures’

200, rue de la Loi

B-1049 Brussels – Belgium

UNSC Resolutions 1267 (1999), 1989 (2011), 2253 (2015).

x

Office of the Ombudsperson to the ISIL (Da'esh) and Al-Qaida Sanctions Committee

Room DC2-2206

United Nations

New York, NY 10017

United States of America

Tel: +1 212 963 2671

Fax: 1 212 963 1300/3778

E-Mail: ombudsperson@un.org

https://www.un.org/securitycouncil/ombudsperson

 

*If a person is delisted from the UN sanctions list, relevant amendments are made to the corresponding legal acts of the EU.

 

On 20 July 2017, the Security Council adopted resolution 2368 (2017), by which it reaffirms that the Focal Point mechanism established in resolution 1730 (2006) may receive exemption requests submitted by, or on behalf of, an individual, group, undertaking or entity on the ISIL (Da’esh) & Al-Qaida Sanctions List, or by the legal representative or estate of such individual, group, undertaking or entity and also may receive, and transmit to the Committee for its consideration, communications from:

(a) individuals who have been removed from the ISIL (Da’esh) & Al-Qaida Sanctions List;

(b) individuals claiming to have been subjected to the measures outlined in paragraph 1 above as a result of false or mistaken identification or confusion with individuals included on the ISIL (Da’esh) & Al-Qaida Sanctions List.

https://www.un.org/securitycouncil/sanctions/delisting

UNSC Resolution 1988 (2011) and other UNSC Resolutions

x

Focal Point for De-listing

Security Council Subsidiary Organs Branch

Room DC2 2034

United Nations

New York, N.Y. 10017

United States of America

Tel. +1 917 367 9448

Fax. +1 917 367 0460

Email: delisting@un.org

https://www.un.org/securitycouncil/sanctions/delisting

*Petitioners may submit de-listing requests either through the focal point process outlined in resolution 1730 (2006), or through the State of their residence or citizenship.

*If a person is removed from the UN sanctions list, relevant amendments are made to the corresponding legal acts of the EU.

Luxembourg grand-ducal Regulation

x

Ministry of Finance

Directorate of multilateral Affairs, Development and Compliance

3, Rue de la Congrégation

L-2931 Luxembourg

Email : sanctions@fi.etat.lu


Important observations about to the fight against terrorism and terrorism financing:

The Financial Intelligence Unit (“FIU”) is the national authority responsible for receiving and analysing suspicious transaction reports and other information regarding suspicious facts that might amount to money laundering, associated predicate offences or terrorism financing. It has the necessary authority and capacity to freely carry out its functions, including the autonomous decision to analyse, request and disseminate specific information to the services and authorities which are competent for fighting money laundering and terrorist financing.

The obligation to report, without delay, all suspicious transactions to the FIU is based, in particular, on article 5, paragraph (1) a) of the Law of 12 November 2004, as amended, on the fight against money laundering and terrorism financing.

According to these provisions, “ The professionals, their directors (dirigeants, members of the authorised management) and employees are obliged to cooperate fully with the Luxembourg authorities responsible for the fight against money laundering and terrorist financing “and self-regulatory bodies, […] are required to: inform promptly, on their own initiative, the Financial Intelligence Unit (…) when they know, suspect or “have reasonable grounds to suspect that money laundering, an associated predicate offence or terrorist financing” is being committed or has been committed or attempted, in particular in consideration of the person concerned, its development, the origin of the funds, the purpose, nature and procedure of the operation. This report must be accompanied by all supporting information and documents having prompted the report. “All suspicious transactions, including attempted suspicious transactions, shall be reported, regardless of the amount of the transaction.” The obligation to report suspicious transactions shall apply regardless of whether those filing the report can determine the predicate offence.”

With regard to combating terrorist financing, the obligation to report suspicious transactions set forth in paragraph 1, point (a) shall also applies to funds where there are reasonable grounds to suspect or they are suspected to be linked or related to, or to be used for terrorism, terrorist acts, by “a terrorist or terrorist” groups or by those who finance terrorism.”

Additional information on suspicious transaction reports are available on the FIU website.

Other restrictive measures in financial matters

Other restrictive measures in financial matters are in force in Luxembourg by virtue of EU regulations, which are directly applicable in Luxembourg.

The lists below are meant purely as a documentation tool and have no legal effect. The Ministry of Finance does not assume any responsibility for  the contents of the list The lists shall not replace the obligation to consult legal provisions in force. Only these ones are legally binding.

These are, in particular, the following European Union regulations:

Restrictive measures against the proliferation and use of chemical weapons:

Restrictive measures against cyber-attacks threatening the Union or its Member States:

Restrictive measures against serious human rights violations and abuses:

 

The Minister of Finance is also competent to deal with questions and authorizations requests exempting from the above mentioned restrictive measures. These requests should be send to:

  • By post mail to: Ministère des Finances, 3 Rue de la Congrégation, L-1352 Luxembourg; or
  • By email to sanctions@fi.etat.lu

Although, it is not a competent authority for cases relating to financial sanctions, the Office du contrôle des exportations, importations et du transit (OCEIT) in the Ministry of the Economy is the competent authority controlling the export, transfer, transit and import of goods of a strictly civil nature, defence-related products and dual use goods; brokering and technical assistance; intangible transfers of technology of these items and the implementation of restrictive measures on commercial matters relating to these goods, laid down by the European Union against certain states, natural or legal persons, entities or groups.

Ministry of Economy – Office du contrôle des exportations, importations et du transit (OCEIT) (previously Office des Licences)
19-21 Boulevard Royal L-2449 Luxembourg
Tél.: (+352) 22 61 62
Fax: (+352) 46 61 38
Courrier électronique: oceit@eco.etat.lu

General information regarding all requests for authorization

Response time:

The authorities endeavor to respond as soon as possible. However, the delay depends on the complexity of the request and the status of the file. Incomplete or inaccurate information will delay and finally lead to the suspension of the handling of the request until the missing information is completed and underlying documents are made available.

Which documents to provide?

Each request shall contain at least the following information:

  • The debtor’s identity;
  • The creditor’s / recipient’s identity;
  • The amount (incl. currency) for which the authorization is requested;
  • The legal basis of the request;
  • Information on the banks participating in the transaction;
  • The date of the contract, the agreement or the obligation by virtue of which the payment is due;
  • Any documents substantiating the claim allowing thus the administration to verify the request (e.g. copy of the invoice);
  • In case of transfer of goods: Description of the nature of the goods (e.g. datasheet of the product);
  • If applicable: The export license (in the case of fund transfers linked to exports of goods); and
  • Contact details of the person(s) that the administration can contact in case of questions or requests for supplementary information.

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