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Journal of Arts and Humanities (JAH)
53
Evolution of Asset-Freezing through the UN Security Council
Dr. Gasem M.S Al-Own
1
, Dr Maysa Bydoon
2
ABSTRACT
The UN Security Council (UNSC) carries out its task in maintaing and restoring international peace
and security. However, it is argued that the Security Council evolved new ways to maintain
international peace and security that differ from what was originally intended when the UN Charter
adopted in 1945. The Development of Asset-freezing could be considered as an example of this
evolution. This Article analyses the historic evolution of asset-freezing in the UN legal order by the
UNSC to identify the changes in the nature of asset-freezing. This article argues that asset-freezing
has been designed as a means to put pressure on states to abide by the orders of the UNSC for the
purpose of maintaining international collective security.
Keywords: Asset-freezing, Chapter VII of the United Nations Charter, Security Council, Terrorism.
This is an open access article under Creative Commons Attribution 4.0 License.
1. Introduction
The United Nation has sought to tackle the issue of terriosm in a comprehensive progress at an
international and regional level in order to establish rules of international law with regard to terrorism.
In its attempt to prevent terrorist attacks, the UNSC first imposed asset-freezing on states, then on de
facto states and on non-state actors, but it has now imposed it on individuals and private entities in
domestic law. This article discusses the historical development of the United Nations Security Council's
approach with regard to asset-freezing.
2. Methodology
The descriptive and analytical method is approached in order to shed lights on the development of the
United Nations Security Council's approach with regard to asset-freezing. Both primary and secondary
sources are used in addresing the main objectives of this article.
1
Assistant Professor of Criminal law, Faculty of law, AL-al Bayt University, Jordan.
2
Associate Professor of Public International law, Faculty of law, AL-al Bayt University, Jordan.
Journal of Arts & Humanities
Volume 06, Issue 04, 2017, 53-59
Article Received: 26-03-2017
Accepted: 04-04-2017
Available Online: 05-04-2017
ISSN: 2167-9045 (Print), 2167-9053 (Online)
Al-Own and Bydoon, JAH (2017), Vol. 06, No. 04: 53-59
Journal of Arts and Humanities (JAH)
54
3. Historical development of asset-freezing
The Security Council started dealing with international terrorism in the early 1990s. It is, therefore,
necessary to discuss the issue of the asset-freezing by the Security Council, in the light of the economic
sanctions that it imposes under Chapter VII of the United Nations Charter (hereinafter ‘UN Charter’).
3
This is because economic sanctions against states is the orgin of asset-freezing as a tool to suppress
international terrorism.
4
Asset-freezing was initially used in the form of economic sanctions under Art.
41 of the UN Charter, imposing such sanctions on the state as a whole, that is, the sum of the people in
addition to the government.
It is understood that Chapter VII addresses the function of the UNSC and defines it as maintaining and
restoring international peace and security. The UNSC can exercise this function by determining that
there is one of three possible cases: (i) a ‘threat to the peace’, (ii) ‘breach of the peace’ or (iii) ‘an act of
aggression’. After that, the UNSC can make recommendations or use its powers under Arts. 41 and 42
of the UN Charter
5
. Arts. 42–51 address the use of military power to restore international peace and
security, if Art. 41 measures have failed to do so.
6
Art. 41 grants the UNSC the power to ‘decide what
measures not involving the use of armed force are to be employed to give effect to its decisions …
These may include complete or partial interruption of economic relations and …’.
7
The asset-freezing imposed under economic sanctions before 1990 was imposed under Chapter VII only
twice: (i) as a result of the Cold War and (ii) of the resulting balance of power. The world then adjusted
to the policy of unilateralism by the end of the Cold War. Economic sanctions were imposed many times
after 1990, for many reasons. In general, sanctions were imposed to stop occupation and the violation
of human rights, to compel the surrender of suspected terrorists or to prevent genocide.
8
The first time the UNSC used Chapter VII to impose economic sanctions relating to terrorism was
against Libya
9
in the wake of the bombing of the Pan Am flight over Lockerbie in Scotland.
10
Subsequently, UNSCR No. 883 was adopted under Chapter VII,
11
where it was decided, in paragraph [3],
to freeze all Libyan assets and funds belonging to the Libyan government and any public authority of
Libya, whether these funds were owned or controlled, directly or indirectly. The most important point
was stated in paragraph [16], where the UNSC decided that as soon as Libya had committed itself to the
extradition of its citizens suspected of the crime, on receipt of the Secretary-General’s report, which
emphasised Libyan compliance with the obligations, all sanctions would be cancelled. This meant that
these sanctions were temporary sanctions, and the cancellation of the sanctions lay in the hands of the
punished side. Ultimately, once Libya had delivered its suspected citizens, the Secretary-General
reported to the UNSC, and the sanctions were lifted immediately.
12
Imposing sanctions under Art.41 usually preceded by UNSCR commits the member state to do, or
refrain from doing, a particular action. In the event of a lack of commitment to what has been imposed
3
UN Charter
4
Michael Bothe, ‘Security Council's Targeted Sanctions Against Presumed Terrorists: the Need to Comply with Human Rights
Standards ’ 6(3) Journal of International Criminal Justice 541, p544.
5
Art. 39
6
Art. 42.
7
Art. 41.
8
Jorge Godinho, ‘When Worlds Collide: Enforcing United Nations Security Council Asset Freezes in the EU Legal Order’ 16
European Law Journal 67, p68; Also see Matthew Craven, ‘Humanitarianism and the quest for smarter sanctions’ 13 European
Journal of International Law 43, p43.
9
Jae-myong Koh, Suppressing terrorist financing and money laundering (Springer, New York 2006), p35.
10
Pan American Flight 103 was bombed on 21 December 1988. The aircraft exploded over Lockerbie, killing all 243 passengers,
the crew of 16 and 11 people from Lockerbie. For more details see Michael Plachta, ‘The Lockerbie Case: The Role of the
Security Council in Enforcing the Principle Aut Dedere Aut Judicare’ 12 European Journal of International Law , pp125-126.
11
UNSCR No.833.
12
By 5 April 1999 the suspects had arrived in the Netherlands, for trial before a Scottish court, after more than a decade since
the crime occurred; for more details see Plachta, p135 et seq; also see Anthony Aust, ‘Lockerbie: The Other Case’ 49
International and Comparative Law Quarterly 278, p295 et seq.
Evolution of asset-freezing through the UN security council
Journal of Arts and Humanities (JAH)
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on the member state, the UNSC issues a resolution to impose these sanctions under Art.41 of the UN
Charter, and these sanctions include asset-freezing.
13
Arts.41–42 of Chapter VII give the UNSC extensive
powers. Because the articles mention various possible sanctions (such as ‘the interruption of economic
relations’) as examples, rather than as an exhaustive list, the UNSC can decide on new sanctions every
time. It is noteworthy that the international sanction is imposed when any state breaches a UNSC order
that protects international peace and security, and this does not always mean a breach of international
law.
14
The UNSC has imposed economic sanctions under Chapter VII several times, but has faced severe
criticism. The most important of which concerned effectiveness and lack of humanity.
15
Sanctions affect
the people, not the decision-makers and, therefore, will have a limited in effect in forcing the State to
be bound by the will of the UNSC, at the same time causing great suffering to the people, especially the
poor.
16
In Iraq, the sanctions were not able to force the Iraqi government to comply with UNSCRs.
Compliance only occurred following military intervention, despite its destructive effects on the Iraqi
people.
17
Similarly, in Afghanistan sanctions did not succeed in forcing the Taliban to hand over Osama
bin Laden or to close terrorist-training camps.
18
This raised doubts about the effectiveness of these
sanctions in achieving the desired goals.
19
It was in response to such criticisms that targeted sanctions
were developed.
20
4. Transformation in the targets of asset-freezing
Two main transformations have occurred to asset-freezing in recent years. The first regards the target
and the second is the nature of the asset-freezing.
Regarding the first transformation, because it has been argued that asset-freezing against states in
general is inhumane,
21
where it destroys the infrastructure in a state and weakens the people’s quality
of life. This contradicts the development objectives of the UN and led to criticism;
22
the UNSC has even
been accused of genocide because of the use of collective sanctions.
23
In practice the freezing of assets
belonging to the state has impacted the people only, which makes these sanctions less effective on the
political will of the targeted states; in many cases it does not affect the leaders of these states or
political decision-making.
24
Therefore, this has all led to a re-thinking of sanctions that can avoid this
criticism.
In the mid-1990s, the targeting of certain states, such as Iraq and Libya, began to be more specific. The
first step was through the targeting of non-state actors,
25
where smart or targeted sanctions were used
for the first time against leading members of National Union for the Total Independence of Angola to
exert pressure on political decision-makers without damage to the population. This was to comply with
UNSCR.
26
After that, in the case of the Taliban movement, where the sanctions were imposed under
UNSCR No. 1267 (1999) (when it controlled 95% of the total area of Afghanistan), it was almost against
13
Godinho, p69.
14
Godinho, p69.
15
Ibid, pp67-78.
16
Bothe, p545.
17
For more details see Craven, p43 et seq.; Mary Ellen O'Connell, ‘Debating the Law of Sanctions’ 13 European Journal of
International Law 63, pp63-79.
18
Godinho, p72.
19
O'Connell, pp66-69.
20
Bothe, p545.
21
Godinho, pp67-78.
22
Craven, p46.
23
O'Connell, p63
24
Craven, p46.
25
Which can be defined as a movement with political construction which controls most of the territory of a state, such as
UNITA or the Taliban.
26
Andrea Bianchi, ‘Security Council's Anti-Terror Resolutions and their Implementation by Member States: an Overview ’ 4
Journal of International Criminal Justice 1044, p1046.
Al-Own and Bydoon, JAH (2017), Vol. 06, No. 04: 53-59
Journal of Arts and Humanities (JAH)
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the state of Afghanistan as a whole.
27
However, the researcher believes that in general this was an
acceptable development, because these non-state actors are de facto states.
However, what cannot be accepted, and can be considered an unnatural evolution – ‘a mutation’
28
– is
the shift in the target of asset-freezing from states and non-state actors to targeting individuals and
entities. This mutation began with UNSCR No. 1267 which targeted Taliban. This happened as the
Taliban failed to hand over Osama bin Laden to US authorities on the basis of the indictment against
him. Until this point, the situation was a natural development. However, following that, in UNSCR No.
1333 (adopted on 19 Dec 2000) paragraph [8(c)] the decision was taken ‘to freeze without delay funds
and other financial assets of Osama bin Laden and individuals and entities associated with him as
designated by the Committee, including those in the Al-Qaida organization’. At this point, the mutation
started as the UNSC targeted individuals and entities associated with bin Laden. The targeting of
individuals and entities subsequently expanded; the expansion was completed by the adoption of
UNSR No. 1373 and its descendants, which required states to freeze the terrorist assets of both
individuals and entities generally.
Accordingly, the issue of whether or not it complies with justice and human rights is questionable
because the UNSC is not prepared to deal with individuals and entities. It is not its nature to deal with
non-states; it is set up to deal with states and similar organizations only.
29
As such, the targeted persons
do not have any kind of representation in the UNSC or UN. In addition, the basis upon which the UNSC
builds its resolutions is a political basis, not a legal one. However, the people targeted by these new
asset-freezing powers have no ability to exert political pressure, so have no means of participating in
the process. There is also no way to challenge the resolutions of the UNSC with regard to asset-
freezing.
30
5. Transformation in the nature of asset-freezing
Concerning the change in the nature of asset-freezing, it has recently changed to an integrated work
system. This change is evident in four main ways: (i) a shift in purpose to become a continuous
preventive action; (ii) a shift in the basis upon which asset-freezing is imposed (‘separation from facts’);
(iii) a shift in spatial jurisdiction; and (iv) a shift to operating outside the original context.
The first aspect and the most important change in the nature of asset-freezing is the change from
international sanctions to a means of crime prevention. Therefore, it can be said that this is a shift in the
purpose of asset-freezing, which illustrates a move from a means of putting pressure on states to a
means of preventing persons from committing possible crimes.
31
In other words, they are now
executively controlled measures intended for pre-emptive use.
32
The asset-freezing system was
changed from reaction to action; it has become a proactive working system, no longer following the
terrorist action – as a response to a particular terrorist act
33
– but a system that attempts to prevent
acts of terrorism from occurring. Transformation to a preventative action to prevent the suspected
terrorists from committing terrorist crimes means that it works continuously.
34
Moreover, as mentioned, before this mutation asset-freezing targeted states, which were required to
commit to a specific obligation. When the states committed to this obligation, usually the asset-
27
Godinho, p72.
28
Mutation used in this article originally borrowed its meaning from biology, where it can be defined as sudden and
spontaneous changes in the cell, this will probably be harmful. See A Dictionary of Science (6 edn, Oxford University Press
2010). However, in the context of this article, mutation is used to mean a significant change in the nature of the concept, not in
the context of normal development, that usually leads to unexpected results.
29
Bothe, p541.
30
Ibid p541.
31
Godinho, p77. UNSCR No.1904.
32
Cian C Murphy, EU Counter-Terrorism Law: Pre-Emption and the Rule of Law (Hart Publishing 2012), p47.
33
Bianchi, p1047; Godinho, p82.
34
Koh, p81; Godinho, pp72-73.
Evolution of asset-freezing through the UN security council
Journal of Arts and Humanities (JAH)
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freezing was repealed immediately.
35
However, now, in the case of individuals, what is the obligation
that must be adhered to?
36
This is important because asset-freezing can be based on the suspicion that
assets may be used for terrorist purposes, but suspicion is a mental state of the investigating person.
Accordingly, there is no obligation for the suspected person to commit to and, therefore, the suspected
person cannot, or can only rarely, be delisted.
The shift in the purpose of asset-freezing to become a preventive measure led to another change.
Previously, asset-freezing was based on a concrete incident (which amounted to a breach of
international peace and security by the state),
37
but now it is based on the possibility that a person
might commit a terrorist acts.
38
Simultaneously, another aspect of the transformation is that the
concept of asset-freezing became disconnected from a specific terrorist act; this makes it a universal
campaign, not related to a regional jurisdiction, in order to supress terrorism anywhere. The UNSC
decided this by considering terrorism as a threat to international peace and security.
39
This gave greater
powers to the use of Chapter VII.
40
A global campaign has been launched through the UNSC. Where prior to 11 September 2001, every case
of international terrorism had been treated separately, after it introduced significant changes to the
war on terrorism,
41
particularly in terms of asset-freezing. The UNSC called on states to engage in
compulsory co-operation and participation in a global system to combat terrorism, through adopting
effective measures and the financial controls contained in the resolutions.
42
It started enacting general
obligations on states to freeze terrorist assets,
43
in order to develop a new global system of justice,
because ordinary criminal justice was not sufficient as it restricts the states. In addition, the law of war
is inappropriate because the enemy is amorphous or undefined.
44
In addition, asset-freezing has
become part of the new world system, where it operates on two levels: (i) international co-operation,
and (ii) legislative and executive legal structure in domestic law.
45
As discussed, the affect of this is that such asset-freezing cannot easily be remedied or challenged by
those they affect. Changes in the nature of asset-freezing has appeared, as it has shifted from a
reaction to a specific event or state of affairs, to a comprehensive collaborative compulsory proactive
system of work, with long-term global effects. Its purpose has shifted from restoring international
peace and security to preventing the commission of terrorism as a domestic law measure. This led to
the possibility that asset-freezing can be based on suspicion of possible future incidents. In addition,
the implementation of asset-freezing has been carried out involving controversial mechanisms. The
UNSC has practised controversial quasi-judicial and legislative powers in addition to its original power,
which was simply to restore international peace and security. It has done so on the assumption that
terrorism is always a threat to international peace and security. The UNSC’s new powers (legislative and
quasi-judicial) can both be considered an expansion in the UNSC’s competence
35
Like the case of the sanctions against Libya, under UNSCR No.748.
36
Godinho, p77; also see Peter L Fitzgerald, ‘Managing smart sanctions against terrorism wisely’ 36(4) New English Law Review
957, pp981-982.
37
Under the UN Charter, Chapter VII.
38
See UNSCR No.1267 also UNSCR No.1373.
39
The UNSC in most of its resolutions on terrorism that were issued after the beginning of the 1990s, considered terrorism as a
threat to international peace and security; particularly see UNSCR No.1373 and UNSCR No.1267 and their descendants.
40
Where these powers came as examples, not exclusive, giving it extensive powers, due to the stretchable formula of Chapter
VII of the Charter; Godinho, p69.
41
Koh, p81.
42
Kern Alexander, ‘United States Financial Sanctions And International Terrorism (Part 2)’ 17(5) Journal of International Banking
and Financial Law 213, p9; Also the UNSC stressed in its UNSCR No.1617, on the obligation of states to implement the Forty
Recommendations on combating money laundering and the nine recommendations on combating terrorism.
43
Like UNSCR No.1373; Also UNSCR No.1390.
44
Helena Kennedy, Legal Conundrums in our Brave New Word, Taking Liberties Terrorism and the Rule of Law (Sweet & Maxwell,
London, 2004), p11.
45
Koh, pp90-91.; Also UNSCR No.1526 [20].
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The final aspect of transformation in the nature of asset-freezing is the shift to implementation outside
its original context of the “International Law Level” to the national level. Where the UNSC ‘[stresses]
that Security Council sanctions measures are often implemented under national law, including criminal
law where applicable’,
46
at the same time the UNSC declared that ‘the measures referred to in
paragraph [1] of this Res
47
are preventative in nature and are not reliant upon criminal standards set out
under national law’.
48
Therefore, the current situation is that asset-freezing is operated from the
international law domain by the UNSC’s committees, but it is also implemented in the domestic law
domain. Thus, there is a difference in the legal standard between the operating level and the
implementation level. This produces procedural problems that, in turn, affect the mechanics of justice
within the framework of domestic law. At this point it could be claimed that applying a measure within
a given legal domain, and at the same time denying the applicability of the legal safeguards related to
this domain (essentially human rights protections), are contrary to the rule of law. Consequently,
applying asset-freezing in domestic law and, at the same time, demanding that it is not subject to
ordinary justice safeguards and standards cause damage to the human rights protection mechanisms.
All of this has led to the crystallization of an international terrorism prevention operation, beginning
with pre-emptive measures, until after the trial and execution of the sentence. With regard to UNSCR
No. 1267 and its descendants, asset-freezing is related to listed persons, without any link to any spatial
jurisdiction (this is especially the case following UNSCR No.1390), because terrorism has become a
global phenomenon.
49
Asset-freezing in UNSCR No.1373, and its descendants, has global affects as it
imposes a general abstract obligation on all states.
50
6. Concluding remarks
In conclusion, freezing the assets of designated persons and entities means that the asset-freezing
operates in a legal order (international law) that is different from the legal order in which it is imposed
(national law). There are substantial differences in legal concepts, mechanisms, procedures,
accountability systems and legal safeguards between these two legal orders. Because of these
differences, a gap has been created between the levels of operation and implementation. This gap
affects the domestic legal order, especially in terms of the legal remedies of human rights and legal
safeguards.
References
Andrea Bianchi, ‘Security Council's Anti-Terror Resolutions and their Implementation by Member
States: an Overview ’ 4 Journal of International Criminal Justice 1044.
Anthony Aust, ‘Lockerbie: The Other Case’ 49 International and Comparative Law Quarterly 278,
Cian C Murphy, EU Counter-Terrorism Law: Pre-Emption and the Rule of Law (Hart Publishing 2012).
Helena Kennedy, Legal Conundrums in our Brave New Word, Taking Liberties Terrorism and the Rule of
Law (Sweet & Maxwell, London, 2004).
Jae-myong Koh, Suppressing terrorist financing and money laundering (Springer, New York 2006).
Jorge Godinho, ‘When Worlds Collide: Enforcing United Nations Security Council Asset Freezes in the
EU Legal Order’ 16 European Law Journal 67
Kern Alexander, ‘United States Financial Sanctions And International Terrorism (Part 2)’ 17(5) Journal of
International Banking and Financial Law 213
Mary Ellen O'Connell, ‘Debating the Law of Sanctions’ 13 European Journal of International Law 63.
Matthew Craven, ‘Humanitarianism and the quest for smarter sanctions’ 13 European Journal of
International Law 43
46
UNSCR No.1699.
47
[1] which refers to the obligation to freeze assets.
48
UNSCR No.1904.
49
Koh, p99; Bianchi, p1046.
50
Koh, p84.
Evolution of asset-freezing through the UN security council
Journal of Arts and Humanities (JAH)
59
Michael Bothe, ‘Security Council's Targeted Sanctions Against Presumed Terrorists: the Need to Comply
with Human Rights Standards ’ 6(3) Journal of International Criminal Justice 541.
Michael Plachta, ‘The Lockerbie Case: The Role of the Security Council in Enforcing the Principle Aut
Dedere Aut Judicare’ 12 European Journal of International Law .
Peter L Fitzgerald, ‘Managing smart sanctions against terrorism wisely’ 36(4) New English Law Review
957.
