EU REVISES CT, DPRK, GUINEA SANCTIONS

C O N F I D E N T I A L SECTION 01 OF 04 BRUSSELS 000035 SIPDIS STATE FOR IO, EEB, S/CT, EUR/ERA, AF, EAP, L TREASURY FOR TFI E.O. 12958: DECL: 01/12/2020 TAGS: ETTC KTFN BEXP KJUS EWWT EAIR PTER UNSC EFIN EUN, GV, KN, NL SUBJECT: EU REVISES CT, DPRK, GUINEA SANCTIONS REF: A. 09BRUSSELS1524 ¶B. 09THEHAGUE636 ¶C. 09BRUSSELS1532 Classified By: USEU EconMinCouns Peter Chase for reasons 1.4 (b) and (d ). -------------- SUMMARY -------------- ¶1. (C) On December 22 the EU Council formally revised EU counterterrorism (both UN/Al-Qaeda & Taliban and autonomous regimes),North Korea, and Guinea sanctions programs. The December revisions reflect an EU willingness to move beyond UN common denominators in the sanctions domain. Procedural changes have broader implications for EU implementation of UN Charter obligations as well as other EU sanctions programs; in general we expect that the new procedures will strengthen both the legality and effectiveness of EU targeted sanctions and are a net positive for U.S. interests. EU Courts forced the changes made to both EU terrorism sanctions laws. The EU removed Netherlands-based Philippine national Jose Maria Sison from the autonomous terrorism list but renewed all other designations. In a power-grab, the European Parliament is expected to assert a decision-making role for itself by challenging the legal basis by which the EU implements UN sanctions. On North Korea, the EU not only implemented UN designations, but also autonomously targeted 13 individuals and 4 entities, established enhanced vigilance measures for the financial and transportation sectors, and banned from export expanded lists of goods with potential proliferation-related uses. On Guinea, the EU added an asset freeze and prohibition of economic transactions against designated junta members, banned export of equipment that might be used for internal repression, and designated 29 additional individuals. Data protection is a growing area of attention in EU sanctions regimes. END SUMMARY. -------------- -------------- UN COUNTERTERRORISM (UNSCR 1267) SANCTIONS: NEW EU LAW -------------- -------------- ¶2. (SBU) Via Regulation (EU) No 1286/2009, the EU Council on December 22 revised the process by which EU institutions and Member States implement UN/Al-Qaeda and Taliban (UNSCR 1267) sanctions. This formally codified a range of procedural modifications made in response to European court rulings. It also created a committee to assist the European Commission with daily implementation issues. The new Regulation specifically references "personal data" and other protection principles recognized in the EU's Charter of Fundamental Rights. EU Member States have thus established a legally-binding commitment to respect minimum procedural safeguards. Due to the standard-setting role of UNSCR 1267 sanctions, the EU will, by extension, most likely incorporate similar safeguards into all of its other targeted EU sanctions programs over time. The new DPRK Regulation (detailed below),for example, cites two pieces of EU legislation related to the processing of personal data of natural perons. ¶3. (C) REVIEW: The Regulation responds largely to a landmark September judgment of the European Court of Justice. In the joined cases of "Kadi" and "Al-Barakaat," that judgment struck down the EU's approach to UN terrorism sanctions, deeming that it violated fundamental rights of the defense, in particular the right to be heard. As a result, the EU has allowed individuals or entities subject to EU implementation of UNSCR 1267 sanctions to submit "observations" to the Commission. Where observations are submitted, the Commission is obligated to forward these to the UN Security Council's 1267 Sanctions Committee, to "review" the decision to designate the individual or entity within the EU, and to communicate the results of its review to both the affected party and the 1267 Committee. De-listing authority nonetheless remains with EU Member BRUSSELS 00000035 002 OF 004 States. Our contacts insist that the EU Council would never reject a UN Security Council designation (See REF A, Para 8). ¶4. (SBU) POWER DYNAMICS: In addition to its implications for international law (i.e., EU Member States' implementation of their obligations under the UN Charter) and for associated cases pending before European Courts, the Regulation is noteworthy for its stated basis in EU law. EU Legal Services posit that sanctions involving third countries and UN obligations fall under Article 215 of the Treaty on the Functioning of the European Union. On this basis, the European Parliament should maintain only a non-binding/advisory role in sanctions design and implementation. Parliament disagrees, arguing that administrative measures against individuals in the counterterrorism domain should fall under Treaty Article 75. The latter interpretation would grant the EP "co-decision" authority and enhance Parliament's role in the committee that will now assist the Commission in 1267 sanctions implementation. ¶5. (C) EU contacts fully expect Parliament to sue the Council and Commission over the matter in the near future. On December 16, the EP had adopted a non-binding resolution claiming full co-decision rights over EU laws implementing UNSCR 1267 sanctions and demanding a fuller consultative role in draft Zimbabwe and Somalia sanctions measures. In their resolution, MEPs demanded adequate protections for any personal data transferred to non-EU countries, including notification of individuals and entities affected by such transfers. They also called for a general legal framework on data protection to be adopted as soon apnd entities are therefore now subject to a travel ban and targeted economic sanctions within the EU. Other significant revisions to the program, by category, include: ¶8. (C) "AUTONOMOUS" DESIGNATIONS: EU Member States had previously agreed to impose a travel ban, asset freeze, and prohibition of economic transactions beyond UN-mandated designations. The Regulation, which autonomously designates 13 individuals and 4 entities for links to DPRK nuclear-related, WMD-related, or ballistic missile-related programs, imposes such targeted measures for the first time. Some of the affected parties (e.g., CHANG Song-taek, Sobaeku United Corp.) do not appear to be specifically designated by the USG. ¶9. (SBU) FINANCIAL MEASURES: Credit and financial BRUSSELS 00000035 003 OF 004 institutions ("FIs") under EU and Member State jurisdiction must now incorporate a robust set of anti-money laundering and counter-terrorism finance ("AML/CFT") protections in their transactions with (a) North Korean FIs, (b) branches and subsidiaries of FIs subject to EU and Member State jurisdiction that are domiciled in North Korea, (c) other FIs domiciled in North Korea, and (d) FIs controlled by persons or entities domiciled in North Korea. These AML/CFT controls include continuous vigilance/enhanced customer due diligence, requirements for complete payment instructions in all wire transfers, maintenance of transaction records for five years, and suspicious transaction reporting to Member State financial intelligence units. The controls reflect guidance issued by the Financial Action Task Force to assist States in countering proliferation finance and mirror the clauses by which the EU implements UNSCR 1803 with respect to Iranian proliferation finance. (NOTE: However, the EU has not yet specifically identified DPRK-related financial institutions for enhanced vigilance measures; this particular Annex remains blank in the Regulation. ECONOFF has shared with EU contacts the amended (December 18, 2009) version of Treasury/FinCEN's advisory concerning "North Korea Government Agencies' and Front Companies' Involvement in Illicit Financial Activities," which identifies North Korean banks from public and commercially available information. END NOTE.) ¶10. (U) TRANSPORTATION: North Korean vessels, along with other cargo aircraft and merchant vessels transiting to/from North Korea, are now required to submit pre-departure/pre-arrival information to Member State customs authorities for all goods brought out of/into the EU. Those aircraft and vessels must also now declare whether they are shipping goods covered by EU/DPRK sanctions and, if so, specify all particulars of the relevant export license. The new Regulation also prohibits bunkering, supply, or other services to vessels that are reasonably suspected of carrying sanctioned goods. ¶11. (U) DUAL-USE ITEMS: An updated standardized list of dual-use items, as published in the EU's Regulation (EC) No 428/2009, will now cover EU exports to the DPRK. ¶12. (U) "OTHER" PROLIFERATION-RELATED ITEMS: The Regulation's Annex (1a) lists other items, materials, equipment, goods, and technology that could contribute to DPRK nuclear, WMD, or ballistic missile programs. Reference numbers from the standard list (i.e., from Regulation 428/2009) are given for items whose characteristics "lie outside the parameters set out in the description" of dual-use items but whose potential proliferation-related uses are similar. ¶13. (C) NO CHANGES TO LUXURY GOODS: Despite several Member States' attempts to expand the EU's list of luxury goods banned from export to North Korea, negotiations were greatly contentious and eventually abandoned. The luxury goods list detailed in Annex III of Council Regulation (EC) No 329/2007 thus continues to apply to the EU/DPRK program unchanged. -------------- GUINEA SANCTIONS -------------- ¶14. (U) Finally, the EU strengthened its sanctions against the ruling junta in Guinea. New elements of that program, found in Council Decision 2009/1003/CFSP, include an asset freeze for designated members of the National Council for Democracy and Development (or their backers),a prohibition of economic transactions with those individuals, and an export ban on equipment that might be used for internal repression. The EU added 29 individuals to its designation list, bringing to 71 the total number of Guineans subject to a travel ban and targeted economic sanctions. (NOTE: New designations appear as #s 43-71 in Annex II to the Decision. END NOTE.) Imposition of the enhanced measures coincided with the release of a UN investigative panel report stating BRUSSELS 00000035 004 OF 004 that junta-sponsored violence should be considered crimes against humanity and calling for a referral to the International Criminal Court. KENNARD .