In response to the challenges posed by global conflicts, particularly Russia’s war with Ukraine, the Council of the EU and European Parliament (EP) have made a landmark agreement to criminalize the violation of EU sanctions across Member States. This agreement marks one of the most significant achievements of the EU’s commitment to uphold a unified and strengthened foreign policy and security measures through enhanced legal mechanisms.
The new EU legislation introduces criminal offences and penalties specifically targeting the circumvention or violation of EU sanctions. Though the majority of the Member States have been regulating sanctions violations as criminal offences, this directive represents a strategic move to ensure that individuals and entities that defy EU sanctions face the same legal repercussions across the bloc.
Key Provisions of the Directive:
- Defining Criminal Offenses: The directive requires Member States to domestically categorize certain actions as criminal offenses. These include assisting individuals under EU restrictive measures to evade travel bans, trading in sanctioned goods, engaging in transactions with entities under EU sanctions, and providing financial services or conducting financial activities that are prohibited or restricted by the EU.
- Expanding the Scope of Offenses: Additionally, the directive broadens the scope of punishable offenses to include incitement, aiding, and abetting these crimes. Notably, trading in war materials is criminalized not only when done intentionally but also in cases of serious negligence. However, the exact way negligence will be assessed is yet to be clarified.
- Implementing Dissuasive Penalties: Member states are required to ensure that violations of EU sanctions are met with effective, proportionate, and dissuasive criminal penalties. In cases of intentional violations, the maximum penalty must include a prison sentence. The directive sets a baseline for punishment, requiring crimes under this directive to be punishable by a minimum of one year of imprisonment, or a minimum of five years, depending on the severity of the offense. Member states retain the discretion to impose even harsher sentences.
- Liability of Legal Persons: A significant aspect of the directive is its applicability to legal persons (such as companies). Companies can be held liable for offenses committed for their benefit by individuals in leading positions. Sanctions for legal entities include the disqualification from business activities and the withdrawal of permits and authorizations to pursue their economic activities.
- Enhanced Enforcement Measures: The directive calls for member states to intensify efforts to ensure compliance with EU sanctions. This includes establishing a limitation period that allows for effective law enforcement. EU countries must also take measures to freeze and confiscate proceeds resulting from sanctions violations.
The provisional agreement is now set to be presented to the Member States’ representatives (Coreper) for approval, after which, the text will undergo formal adoption by both the Council and the EP in 2024.
Restrictive measures are a vital component of the EU’s foreign and security policy toolbox, typically including asset freezes, travel bans, and import/export restrictions. The enforcement of these sanctions traditionally falls under the purview of Member States, leading to varying types and levels of penalties due to differences in national systems. Prior to the agreement, Member States were not obligated to criminalize violations, often resorting to administrative sanctions instead. In response to the need for more uniform and stringent enforcement of sanctions, especially in light of recent geopolitical tensions, the European Commission proposed this directive on 5 December 2022.