EU Regulation forbidding financial transactions with certain persons and entities

On Tuesday 2 October the European Commission put forward a draft Regulation forbidding financial transactions for, or on behalf of, 27 listed organisations and groups. The proposal was sent to the European Parliament on 3 October and was adopted - with amendments - under a special procedure (Procedure without report, Rule 158) by the plenary session of the parliament in Strasbourg on 4 October.

Commission proposed Regulation: Full-text (html) Full-text (pdf)

The vote in the parliament was 417 votes in favour, 44 against and 18 abstentions approving a regulation which will enable EU Member States to block terrorist accounts and restrict financing of terrorism. However, the parliament did introduce a number of important amendments: that the measure should be temporary, as the legislation was drawn up in haste and needs to be improved (the Commission proposal gave no time limit) - MEPs want the regulation to expire at the end of 2003 and to be reviewed within a year.

In other amendments, Parliament stressed that as the regulation is based on article 308 of the Treaty, the Court of Justice shall have jurisdiction. Also, the annex listing 27 organisations whose assets are to be frozen should be amended and include other terrorist organisations. Parliament should be consulted, if necessary on a confidential basis, on future changes to the list of organisations whose accounts are to be blocked.

The General Affairs Council on Monday 8 October discussed but did not adopt the measure, now may be adopted at the ECOFIN Council of Ministers meeting on Tuesday 16 October.

A majority of EU governments are still hoping that the UN Sanctions Committee will agree a measure on the freezing of terrorist assets thus making the European Commission's proposal redundant.

Under the proposal the Council can amend or add to the list of groups without reference to or consultation of the parliament (Article 2.2). The parliament's amendment that groups could perhaps be added and the parliament be consulted on a "Confidential" basis would appear to defeat the general purpose of the Regulation as it depends on the wider public having a knowledge of who is on the list. Under Article 6 a person with a "reasonable expectation" that a group may be connected with terrorism (which is not listed) is expected to get written confirmation from specified national authorities before undertaking any business transaction.

It is reported that some MEPs want to add other groups to the list. The danger is that if the list becomes a "shopping list" - of effectively proscribed groups - for EU governments and other "friendly" governments it could be extend to those considered as "liberation struggles", such as the ANC's struggle for liberation in South Africa, against undemocratic or authoritarian regimes rather than "terrorist" organisations. In the UK the breadth of the list of proscribed organisations has drawn much criticism, see: UK proscribed groups

EU - The list of groups or legal persons covered:

1. Al Qaida/Islamic Army
2. Abu Sayyaf Group
3. Armed Islamic Group (GIA)
4. Harakat ul-Mujahidin (HUM)
5. Al-Jihad (Egyptian Islamic Jihad)
6. Islamic Movement of Uzbekistan (IMU)
7. Asbat al-Ansar
8. Salafist group for Call and Combat (GSPC)
9. Libyan Islamic Fighting Group
10. Al-Itihaad al-Islamiya (AIAI)
11. Islamic Army of Aden
12. Usama Bin laden
13. Muhammad Atif (a.k.a. Subhi Abu Sitta, Abu Hafs Al Masri)
14. Sayf al-Adl
15. Shaykh Sai'id (a.k.a. Mustafa Muhammad Ahmad)
16. Abu Hafs the Mauritanian (aka, Mahfouz Ould al-Walid, Khalid Al-Shanqiti)
17. Ibn Al-Shaykh al-Libi
18. Abu Zubaydah (a.k.a. Zayn al-Abidin Muhammad Hussayn, Tariq)
19. Abd al-Hadi al-Iraqi (a.k.a. Abu Abdallah)
20. Ayman al-Zawahiri
21. Thirwat Sal


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