Author: Azizur Rahman
6 December 2022
2 min read
Rahman Ravelli details the European Union’s decision to add violation of sanctions to the list of “EU Crimes’’
On 28 November 2022, the 27 European Union member states agreed to add the breaching of sanctions to its list of “EU crimes” - a crime serious enough to require harmonization of legislation at the European level.
This is the first time the list of EU crimes included in the Lisbon Treaty has been being modified since its enactment, despite many attempts. Four days later, the EU Commission published its proposed directive, which aims to provide harmonized, EU-wide legal definitions of what constitutes a violation of sanctions and create agreement on the judicial answer to be brought and common minimum penalties if such crimes are committed. This will then make it easier to prosecute individuals and entities if they do violate sanctions.
This is a key step towards greater and more harmonized enforcement of EU sanctions, the closing of existing legal loopholes and increasing the deterrent effect of violating EU sanctions. Until now, the violation of EU restrictive measures received different judicial answers in the various member states: from being considered an administrative offence or a criminal offence through to not being penalized at all.
Enforcement has always been the weak spot in ensuring compliance with the EU sanctions regime. The disparities in the penalties incurred in the 27 member states have, until now, created the possibility for “legal shopping’’ - the search for the least restrictive EU jurisdictions. Indeed, prior to this decision, it was possible for member states to have different definitions of what constituted a violation of restrictive measures and differing penalties that should be applied in the event of such a violation. This meant there could be varying degrees of enforcement of sanctions from state to state and a risk of these measures being sidestepped, giving those sanctioned the chance to keep accessing their assets.
The inclusion of sanctions on the list demonstrates a clear willingness by the member states to ensure a similar degree of sanctions enforcement throughout the EU and prevent and deter attempts to use loopholes to circumvent or violate EU measures. Along the same lines, the political willingness expressed by both the French and German Ministers of Justice to add the circumvention of sanctions to the remit of the European Public Prosecution Office’s scope of responsibilities demonstrates a strong desire at EU level to ensure that non-compliance is appropriately investigated, prosecuted and sanctioned.
Following the inclusion of the violation of restrictive measures on the list of EU crimes and the presentation of a proposal for a directive by the EU Commission, the draft directive will be discussed by the European Parliament and the Council as part of the ordinary co-legislative procedure.
Since the Russian invasion of Ukraine, the EU has produced eight packages of sanctions against Russia and is currently contemplating a ninth. In addition to including hundreds of persons and entities on the EU consolidated sanctions list, these packages have imposed significant restrictions on key business sectors of the Russian economy; including restrictions on the provision of services from the EU. This has had a significant impact on the operations of multinational groups that have an EU and Russian presence.
As a result, it is now more important than ever for businesses to seek assistance in navigating this complex, changing legal landscape whenever business interactions involve EU operators and Russian counterparts.
Aziz Rahman is Senior Partner at Rahman Ravelli and its founder. His ability to coordinate national, international and multi-agency defences has led to success in some of the most significant corporate crime cases of this century and top rankings in international legal guides. He is recognised worldwide as one of the most capable legal experts regarding top-level, high-value commercial and financial disputes.