23.6.98 Official Journal of the European Communities L 178/33 COUNCIL REGULATION (EC) No 1295/98 of 22 June 1998 concerning the freezing of funds held abroad by the Governments of the Federal Republic of Yugoslavia and the Republic of Serbia THE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Articles 73g and 228a, Having regard to Common Position 98/326/CFSP of 7 May 1998 defined by the Council on the basis of Article J.2 of the Treaty on European Union concerning the freezing of funds held abroad by the Federal Republic of Yugoslavia (FRY) and Serbian Governments ('), Having regard to the proposal from the Commission, Whereas the said common position provides for a freezing of funds held abroad by the Governments of the Federal Republic of Yugoslavia and the Republic of Serbia; Whereas this measure falls within the scope of the Treaty establishing the European Community; Whereas, therefore, and notably with a view to avoiding distortion of competition, Community legislation is necessary for the implementation of this measure, as far as the territory of the Community is concerned; whereas such territory is deemed to encompass, for the purposes of this Regulation, the territories of the Member States to which the Treaty establishing the European Community is applicable, under the conditions laid down in that Treaty; Whereas circumvention of this Regulation, notably by entities owned by the said governments should be coun- tered with an adequate system of information and, where appropriate, consideration of appropriate remedial meas- ures, including additional Community legislation; Whereas competent authorities of the Member States should, where necessary, be empowered to ensure compli- ance with this Regulation; Whereas there is a need for Commission and Member States to inform each other of the measures taken under this Regulation and of other relevant information at their disposal in connection with this Regulation, () OJ L 143, 14. 5. 1998, p. 1. HAS ADOPTED THIS REGULATION: Article 1 For the purpose of this Regulation: 1. ‘Government of the Federal Republic of Yugoslavia’ means: the Government of the Federal Republic of Yugoslavia, including the public administrations and agencies at the federal level. 2. ‘Government of the Republic of Serbia’ means: the Government of the Republic of Serbia, including the public administrations and agencies at the central government level in the Republic of Serbia. 3. ‘Funds’ means: funds of any kind, including interest, dividends or other value accruing to or from any such funds. 4. ‘Freezing of funds’ means: preventing any change in volume, amount, location, ownership, possession, char- acter, destination or other change that would enable the use of the funds concerned. Article 2 Except as permitted by Article 3: 1. all funds held outside the territory of the Federal Republic of Yugoslavia and belonging to the Govern- ment of the Federal Republic of Yugoslavia and/or to the Government of the Republic of Serbia shall be frozen. 2. No funds shall be made available, directly or indirectly, to or for the benefit of, either or both, those Govern- ments. Article 3 Article 2 shall not apply to funds exclusively used for the following purposes: (a) payment for current expenses, including salaries of local staff, embassies, consular posts or diplomatic missions of the Government of the Federal Republic of Yugoslavia and/or the Government of the Republic of Serbia within the Community; (b) transfer from the Community to natural persons res- ident in the Federal Republic of Yugoslavia of social security or pension payments as well as the transfer of other payments to protect entitlements in the area of social insurance;