By: Ganado Advocates
On 12th December 2023, the European Council and European Parliament have come to a provisional political agreement on the introduction of criminal offences and penalties for the violation of EU sanctions.
This agreement is fundamentally important in the context of the Russian aggression against Ukraine whereby any violations to the EU restrictive measures in this respect will be penalized.
Background
EU sanctions and restrictive measures are a fundamental tool for the EU’s foreign and security policy. In May 2022, the European Commission had proposed to add the violation of EU restrictive measures to the overall list of EU crimes included in the Treaty on the Functioning of the EU, whereby this proposal was ultimately adopted by the European Council in November 2022. Following this, in December 2022, the European Commission had proposed a Directive as an additional step to enforce violations of EU restrictive measures. On 12th December, the European Council and European Parliament have reached a provisional political agreement to harmonise criminal offences and penalties for the violation of EU restrictive measures.
Harmonisation of the criminal offences
The new Directive will include a list of criminal offences related to the violation and circumvention of EU sanctions including:
- failure to freeze assets;
- breaching travel bans;
– breaching arms embargoes;
- providing prohibited or restricted economic activities and/or other financial services; and
- concealing funds that are subject to a freezing order.
Any inciting, assisting and abetting of the abovementioned offences also constitute as a punishable offence.
Establishment of penalties for criminal offences
In terms of the proposed new directive, member states would be required to punish violations of EU sanctions through a prison sentence. The proposed directive harmonises the penalties relevant to such offences across the EU. In this regard, it is being proposed that the following penalties would apply:
- a maximum penalty of at least one year imprisonment up to five years of imprisonment, subject to the severity of the offence;
- monetary fines;
– other liability measures and sanctions for legal persons including prohibition of business activities, and revocation of authorisations and other related licenses relating to the economic activity performed.
EU members states should ensure that EU restrictive measures are respected and complied with by implementing the abovementioned standards at national level. Member States can also decide to implement stricter provisions foreseeing higher sentences. Furthermore, Member States must provide a limited time period within which legal action will be initiated, to ensure proper law enforcement, and take measures to freeze and confiscate proceeds derived from violations of EU sanctions.
Next Steps
Moving forward, the provisional agreement will be submitted to the EU Member States’ representatives, and if approved, the proposed text will be formally adopted by the European Council and European Parliament. The Directive will enter into force on the 20th day following the publication in the Official Journal of the European Union.
Author: Jonathan Camilleri (Regulatory Advisor, Ganado Advocates)
