Financial Sanctions and Freezing of Funds
International financial sanctions
International sanctions are restrictive measures limiting or suspending economic or commercial cooperation and, for example, transport and communications links or diplomatic relations with a particular state or groups. The objective of sanctions is, as part of other foreign policy measures, to influence the policies or actions of a state or a group of people considered to pose a threat to international peace and security.
In addition to financial sanctions, the range of sanctions includes restrictions on export and import and restrictions on admission, for example. Nowadays, the aim is to target sanctions as precisely as possible, and the EU or the UN no longer impose comprehensive embargoes.
The sanctions binding on Finland are based on decisions of the UN Security Council, in addition to which the EU can also impose so-called autonomous restrictive measures on its own initiative. Autonomous sanctions of both the UN and the EU are governed by EU law through Council decisions and regulations. EU regulations are directly applicable in the territory of the EU Member States, and they are binding also on citizens of other EU Member States and legal persons established in accordance with the legislation of the Member States.
In addition to country-specific sanctions regimes, there are also thematic sanctions that can be imposed with the aim of preventing terrorism, use of chemical weapons and cyberattacks.
Sanctions regulations often impose an obligation to freeze the funds and other economic resources of the persons and entities listed in their annexes. In addition, it is prohibited to make funds or economic resources available, directly or indirectly, to the designated persons. The competent authority may allow activity prohibited by financial sanctions through granting a licence.
Government enforces sanctions
Although sanctions are based on EU legislation, the Member States are responsible for enforcing them. It is the duty of the members of the United Nations and the European Union to enforce the sanctions imposed by these bodies (Sanctions Act). In Finland, the Ministry for Foreign Affairs coordinates the national enforcement of sanctions and acts as the national licencing authority.
A decision to freeze funds of a natural or legal person is in Finland enforced by the debt enforcement authorities. The National Enforcement Authority is responsible for the freezing of funds. Parties subject to the reporting obligation have a special obligation to provide the enforcement authority with information on the funds and other assets of the listed individuals or entities without delay. Violations or attempted violations of EU sanctions regulations are punishable as regulation offences under the Criminal Code.
Finland has also introduced a national mechanism for the freezing of funds to combat terrorism. The Act on the Freezing of Funds with a View to Combating Terrorism enables, for example, the freezing of funds of a natural or legal person suspected of, charged with or convicted of a terrorist offence under the Criminal Code. The decision to freeze funds is made by the National Bureau of Investigation.
A list of decisions to freeze funds to with a view to combating terrorism
The National Bureau of Investigation keeps a public list of decisions to freeze funds with a view to combating terrorism. The list can be ordered in Word or Excel format from the Registry of the National Bureau of Investigation by e-mail at [email protected] or by telephone on 0295 486 510. Provisions in the matter are laid down by the Act on the Freezing of Funds with a View to Combating Terrorism.
The Financial Intelligence Unit has noted the need to make the public list of decisions to freeze funds available on the website in digital format. The related data security and privacy issues are currently being addressed.
Useful links
Legislation
