Introduction to Financial Sanctions
What are Financial Sanctions?
Financial sanctions are restrictive measures imposed on persons, entities and bodies in an effort to curtail their activities and to exert pressure and influence on them. Restrictive measures include, but are not limited to, financial sanctions, trade sanctions, restrictions on travel or civil aviation restrictions.
Financial sanctions emanate from the EU and the UN and are contained in sanctions lists. All natural and legal persons are obliged to comply with financial sanctions and can do so by monitoring the EU and UN lists and taking appropriate action as required (see below). The consolidated lists are available here:
Central Bank of Ireland also provides frequent financial sanctions updates.
EU Financial Sanctions
The EU implements restrictive measures autonomously at an EU level or as a result of resolutions of the Security Council of the United Nations through the publication of EU Council Regulations. EU Council Regulations are binding on all Member States once published in the EU Official Journal.
Targeted Financial Sanctions related to Terrorist Financing and Proliferation of Weapons of Mass Destruction
Targeted Financial Sanctions are a specific type of financial sanction with a stated objective, one of which is the prevention of terrorist financing.
Targeted Financial Sanctions can originate at the supranational level (EU) or international level (UN). While there is a clear obligation to comply with EU Council Regulations, it is also necessary to monitor the designation of persons and entities by the United Nations Security Council Sanctions Committees (“UN Sanctions Committees") in the terrorist financing context. The EU gives legal effect to Targeted Financial Sanction designations by the UN Sanctions Committees through EU Council Regulations.
Once a person, entity or body is designated ('sanctioned') by the UN Sanctions Committees, funds or other assets should be frozen without delay and not made available, directly or indirectly, to that person, entity or body. Targeted Financial Sanctions relating to terrorism are dealt with in United Nations Security resolutions 1267 (1999) and 1373 (2001) and their successor resolutions.
Further information on Targeted Financial Sanctions and Terrorist Financing can be found on the Terrorist Financing page.
Financial Sanctions Requirements
There is a legal obligation to comply with EU Regulations relating to financial sanctions as soon as they are adopted. Once a person, entity or body has been sanctioned under EU Financial Sanctions, there is a legal obligation not to transfer funds or make funds or economic resources available, directly or indirectly, to that person or entity.
In certain circumstances, a person may make a transfer to a sanctioned person, entity or body if a prior authorisation is received or notification is given to a competent authority. Further information on this procedure can be found on the Derogations page and the Iran Regulations page .
All persons must supply any information related to suspected financial sanctions breaches to the Central Bank pursuant to the relevant EU Regulations.
The penalties in Irish law for a breach of EU Financial Sanctions are contained in Irish Statutory Instruments. A list of Irish statutory instruments in force relating to penalties for the breach of financial sanctions can be found by referring to the Irish Statute Book website.
Guidance for Credit and Financial Institutions ("Firms")
There is an obligation on Firms to ensure that they are compliant with financial sanctions, which includes the ongoing monitoring of transactions. To ensure compliance with financial sanctions, it is necessary to monitor both the EU Financial Sanctions list and the UN Sanctions Committees list relating to terrorism and the proliferation of weapons of mass destruction.
What to do if a match or 'hit' occurs
In the event that a match or a “hit” occurs against a sanctioned person, entity or body, Firms must immediately freeze the account(s) and/or stop the transaction(s) and report the “hit” to the Central Bank by email to [email protected], using the Sanctions Return Form. For further information on sanctions reporting, please visit the Central Bank’s dedicated Sanctions Reporting webpage.
EU sanctions whistleblower tool
If you are aware of possible violations of any EU sanctions, you can bring this to the attention of the European Commission by voluntarily providing information. This information can relate, for example, to facts concerning sanctions violations, their circumstances and the individuals, companies and third countries involved. These can be facts that are not publicly known but are known to you and can cover past, ongoing or planned sanctions violations, as well as attempts to circumvent EU sanctions. View further details on the EU sanctions whistleblower tool.
Competent Authorities for Financial Sanctions
The Central Bank is responsible for financial regulation in Ireland. It is also one of three competent authorities for EU sanctions and is responsible for the administration of financial sanctions in Ireland as it relates to financial institutions.
The other Irish competent authorities for EU Restrictive Measures are:
Further Information
Further information on EU restrictive measures (sanctions) is available on the website of the European Commission.
Further information on UN sanctions is available on the website of the United Nations Security Council.
Contact
The Central Bank’s financial sanctions unit can be contacted by email: [email protected].