The Court of Appeal, to that extent only, allowed an appeal by Centro-Com SRL, an Italian company trading in pharmaceutical goods, against the refusal by the Divisional Court (Independent, 5 November 1993; (1994) 1 CMLR 109) to grant judicial review of a policy decision by the Bank of England, acting on behalf of the Treasury, to permit payment out of Serbian accounts in the United Kingdom for approved goods exported to Serbia and Montenegro only if they came from the UK; and, pursuant to that policy, to deny permission for pounds 200,000 to be paid, out of an account held by the National Bank of Yugoslavia with Barclays Bank in London, to the applicants in respect of four consignments of medical supplies exported from Italy.
The Bank of England's permission for the release of funds was required under article 10 of the Serbia and Montenegro (UN Sanctions) Order 1992 (SI 1302) made under section 1 of the United Nations Act 1946 to give effect to UN Resolution 757, which prohibited, inter alia, exports to Serbia and Montenegro and the payments for them from Serbian and Montenegran funds held in other UN member states, except for exports of medical goods or foodstuffs approved by the UN Yugoslavia Sanctions Committee.
In the UK, the sanctions order was governed by the 1992 Order and EEC Regulation 1432/92, as amended by EEC Regulation 2015/92. Until 25 February 1993, the Bank permitted payments for approved exports from any EC member state. But after that date, such permission was restricted to UK exports. As a result, Centro- Com, which had approval from the relevant authorities to export medical goods from Italy to Serbia and Montenegro, was unable to obtain payments for a number of authorised consignments.
Stuart Isaacs QC and Clive Lewis (Iliffes) for Centro-Com; Stephen Richards and Barbara Hewson (Treasury Solicitor) for the respondents.
LORD JUSTICE KENNEDY said UN Resolution 757 imposed sanctions but allowed for limited exceptions. Means were therefore devised to ensure that only excepted goods passed through frontiers, but unfortunately evidence emerged that those means were proving ineffective. Nevertheless, the primary obligation on member states to implement the sanctions remained.
The respondents were entitled to conclude they could only discharge their obligation satisfactorily by preventing any movement of funds except to pay for future supplies which they were satisfied were excepted goods.
However, his Lordship agreed with LORD JUSTICE GLIDEWELL that the case should be referred to the European Court of Justice on the question of whether the new policy involved a breach of article 113 of the EEC Treaty and EEC Regulation 1432/92. SIR JOHN MEGAW agreed with Lord Justice Kennedy on the domestic law issue and with Lord Justice Glidewell that the article 113 question should be referred to the European court.Reuse content