Changes to the regime for freezing funds and economic resources under international economic sanctions (February-April 2022)

Sovereign Order no. 8.664 of 26th May 2021 has thoroughly reshaped the procedures for freezing funds and economic resources in application of international economic sanctions (decreed by the UN, the European Union, France or another State).

As a reminder, Sovereign Order 8.664 replaced Sovereign Orders 15.321 of 8 April 2002 on procedures for freezing funds in order to combat terrorism, as amended, and 1.675 of 10 June 2008 on procedures for freezing funds implementing economic sanctions, as amended.

Asset freezing measures are now taken by ministerial decisions of the Minister of State (and no longer by ministerial orders), and a national list has been created containing all natural and legal persons, entities and organisations subject to such measures, maintained by the Budget and Treasury Department.

Sovereign Order 8.664 was amended twice at the beginning of 2022 in the context of measures to freeze the assets of Russian oligarchs following the invasion of Ukraine (Sovereign Orders 9.098 of 11 February 2022 and 9.171 of 4 April 2022).

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Amendments of February 2022:

Sovereign Order n° 9.098 of 11 February 2022 (JDM n° 8578 of 18 February 2022) clarifies and broadens the regime applicable to the freezing of assets. It also establishes an "Advisory Committee on the freezing of funds and economic resources". Six articles (1, 4, 6, 7, 8, 14) are amended and four new articles (6-1, 7-1, 7-2, 7-3) are created.

• Mention in the heading of economic sanctions taken by another State (in addition to France), pursuant to which the Minister of State may take measures to freeze funds and economic resources under the conditions set out in Article 7 (amendment of Article 1);
• Clarification of the wording of the negative obligations common to credit institutions, any other financial institution, insurance undertaking, and any body, entity or person (amendment of Art. 4);
• Correction of consistency with regard to the implementation of the obligations of the above-mentioned persons and entities pursuant to the UN lists, which are of two kinds, not only positive (freezing of funds and economic resources, provided for in Art. 3) but also negative (provided for in Art. 4) (amendment of Art. 6, para. 3);
• Express mention that the EU and French lists are taken over by ministerial decisions (new Art. 6-1);
• Broadening of the scope of persons and entities that the Minister of State may designate in the fight against terrorism, on his own initiative or at the request of another State (amendment of Article 7);
• Clarification of the procedures for monitoring the application of the provisions of Sovereign Order Nr 8.664 by regulated professionals referred to in Article 2 of Act Nr 1.362 dated August 3rd , 2009 on the fight against money laundering, terrorist financing and corruption (new Art. 7-3);;
• Clarification that the Director of the Budget and Treasury must be informed "promptly" of the implementation of measures to freeze funds and economic resources, and addition of the supervisory authorities of the professionals subject to Art. 2 of Law No. 1.362 of 3 August 2009, namely the Public Prosecutor and the President of the Bar Association, newly mentioned in Art. 7-3 (modification of Art. 8):
• Definition of "funds" clarified with regard to the "economic benefits of any kind" referred to, with the addition of "virtual financial assets" (amendment of Art. 14 letter a.).

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Amendments of April 2022 :

Sovereign Order no 8.664 was further amended by Sovereign Order n° 9.171 of 4 April 2022 (JDM no 8585 of 8 April 2022) which specifies the regime of the authorisation to unfreeze or use frozen funds or economic resources, which may be issued by decision of the Minister of State, in compliance with the conditions set out in the economic sanctions decreed by the United Nations Organisation, the European Union or the French Republic.