Sweden Explains It All: EU Iran Nuclear Sanctions Details (Part 3 of 5)

Part K: Investments in or from Iranian companies

Investments in Iranian companies

Under Article 17 of Council Regulation (EU) No 267/2012, it is prohibited to invest, through loans, acquisitions or joint ventures etc. in Iranian companies that manufacture products that are subject to the arms embargo (see point A), or that are covered by the prohibitions on the export etc. of dual-use products under Annexes I and II of the Regulation (see point B). The same applies to Iranian companies engaged in the exploration or production of crude oil or natural gas, the refining of fuels or the liquefaction of natural gas, or in the petrochemical industry (see points C, F and G). This article also provides certain definitions of relevant terms above and beyond those contained in Article 1 of the Regulation. Certain cooperation associated with the transmission of natural gas is also prohibited.

However, under Article 19 the competent authority can authorise investments in industries that manufacture arms or dual-use products if the investment is for food, agricultural, medical or other humanitarian purposes, in some cases following approval by the UN Sanctions Committee. The Swedish Agency for Non-Proliferation and Export Controls is the competent authority in Sweden.

Under Articles 20 and 21, the prohibition on investments etc. does not apply vis-à-vis companies engaged in the Iranian oil and gas sector and in the petrochemical industry with respect to fulfilling certain contracts that were concluded at an earlier time. However, the competent authority – in Sweden's case the National Board of Trade – must be notified of the contract at least 20 working days before the transaction takes place.

If financing referred to above concerns companies that manufacture dual-use products that, under Annex III of the Regulation, are subject to authorisation requirements for export etc. from the EU, the financing also requires authorisation under Article 18. This may be granted as long as the financing in question would not contribute to the nuclear activities or development of nuclear weapon delivery systems that the Security Council wishes to prohibit. The Swedish Agency for Non-Proliferation and Export Controls is the competent authority for granting authorisation.

Article 39 contains a rule on exemptions that concerns the financing of arrangements in the oil and gas sector that involve Iranian part-ownership but are located outside Iran.

Investments from Iranian companies

Under Article 22 of Council Regulation (EU) No 267/2012, it is prohibited to assist Iranian companies, by providing loans, concluding an agreement, etc., in acquiring or extending ownership etc. of companies within the EU engaged in uranium mining, enrichment or reprocessing, or the manufacture of goods or technology included in the Nuclear Suppliers Group and Missile Technology Control Regime lists.

Part L: Financial Support for Trade

EU Member States may not enter into any short-, medium- or long-term commitments to provide financial support for trade with Iran. This includes a prohibition on granting export credits, guarantees or insurance to nationals or entities involved in such trade. Nor may Member States guarantee or reinsure such commitments. This prohibition does not apply to commitments made before the prohibition was introduced, and does not concern trade for food, agricultural, medical or other humanitarian purposes.

The prohibitions and restrictions are found in Article 8 of Council Decision 2010/413/CFSP. They have been implemented in national law through the ordinance concerning certain sanctions against Iran (2007:704). Questions should be addressed to the Ministry for Foreign Affairs or the Swedish Export Credits Guarantee Board.

Part M: Financial Commitments with Iranian Government

EU Member States may not enter into new commitments for grants, financial assistance or concessional loans to the Government of Iran, except for humanitarian and developmental purposes. This also applies to Member States' participation in international financial institutions. This prohibition is found in Article 9 of Council Decision 2010/413/CFSP.

Part N: Freezing of Assets

Funds and economic resources are being frozen, and it is prohibited to make funds and economic resources available, with respect to persons, entities or bodies that the Security Council or the EU considers to have a particular connection to Iranian activities that the Security Council wishes to prevent, particularly in the area of nuclear and missile technology. This is regulated in Article 23(1) of Council Regulation (EU) No 267/2012 with regard to the Security Council list, and in Article 23(2) of the Regulation with regard to the additional EU list. The prohibition on provision is contained in Article 23(3). Article 23(4) clarifies that specialised financial messaging services (e.g. certain SWIFT services), may not be supplied for the benefit of the Iranian persons, companies and organisations covered by the freezing of assets and the prohibition on the provision of assets.

The persons, companies and organisations covered by these sanctions are listed in Annexes VIII and IX of Council Regulation (EU) No 267/2012. The Annexes include a number of banks and shipping companies, and now also contain individuals and companies with links to the Iranian Revolutionary Guard Corps (IRGC). The list has been expanded and amended through Council Regulations and Implementing Regulations (EU) Nos 350/2012, 709/2012, 945/2012, 1016/2012 and 1264/2012.

Finansinspektionen (the Swedish Financial Supervisory Authority) is tasked with receiving information concerning frozen accounts and other information from banks, and forwarding such information to the European Commission. Certain derogations and exemptions are permissible under Articles 24-29 of the Regulation, including for contracts concluded prior to the listing decision. These include certain special exceptions contained in Article 28 relating to the Central Bank of Iran, which is on the freezing list. Försäkringskassan (the Swedish Social Insurance Agency) is authorised to grant exemptions to unfreeze assets belonging to private individuals in order to pay necessary expenses, for example. In relation to companies, the Swedish Agency for Non-Proliferation and Export Controls can, for example, grant exemptions to honour contracts etc. entered into before the assets were frozen. If the assets were frozen as the result of a UN decision, the Sanctions Committee must be involved.