European Union Restrictive Measures (sanctions)
To contribute to the implementation of EU restrictive measures, the Commission has proposed to add the violation of EU restrictive measures to the list of EU crimes, and to reinforce rules on asset recovery and confiscation. While the Russian aggression on Ukraine is ongoing, it is paramount that EU restrictive measures are fully implemented and the violation of those measures must not be allowed to pay off. These proposals aim to ensure that the assets of individuals and entities that violate the restrictive measures can be effectively confiscated in the future.
European Union Restrictive measures (sanctions)
The sixth package comprises both updates/extension of the scope coverage of existing measures as well as new restrictive measures. The package contains a complete import ban on all Russian seaborne crude oil and petroleum products. The ban is subject to certain transition periods. As regards export restrictions, today's package includes restrictions on chemicals that could be used in manufacturing chemical weapons.
The geographical scope of the restrictive measures in response to the recognition of the non-government controlled areas of the Donetsk and Luhansk oblasts of Ukraine and the ordering of Russian armed forces into those areas has been extended to cover all the non-government controlled areas of Ukraine in the oblasts of Donetsk, Luhansk, Zaporizhzhia and Kherson.
On 13 July 2022, the Commission published further guidance to Member States on the transit of goods from Russia. The guidance specifies the applicable rules and recalls that Member States are obliged to prevent all possible forms of circumvention of EU restrictive measures. In that light, the Commission underlines the importance of monitoring the two-way trade flows between Russia and Kaliningrad Oblast to ensure that sanctions are not circumvented.
Sanctions, embargo, or restrictive measures, are political trade restrictions imposed by the United Nations or the European Union. They target governments, organised military or paramilitary groups, commercial entities and individuals whose behaviour contravenes international law and present specific threats, such as cyberattacks, proliferation of chemical weapons, terrorism, human rights violations and abuses. Investigating and prosecuting such violations could prove critical in the overall fight against impunity for core international crimes, including genocide, crimes against humanity and war crimes, in particular where corporate actors are involved. Legislation of all EU Member States include administrative or criminal penalties. Yet, very few individuals or legal persons are effectively held accountable for these offences. This report demonstrates that sanctions violations may provide an alternative or additional path towards accountability for core international crimes.
The Commission published today a guidance note on the provision of humanitarian aid in compliance with EU restrictive measures (sanctions). This builds on previous guidance on the provision of humanitarian aid to fight the Covid-19 pandemic in certain environments subject to EU sanctions that focused on EU counterterrorism sanctions and Iran, Nicaragua, Syria and Venezuela sanctions regimes.
The guidance is designed to facilitate compliance with EU sanctions while proving that EU is committed to avoid and, where unavoidable, to mitigate to the maximum extent possible any potential unintended negative impacts of EU restrictive measures on humanitarian action. Furthermore, the guidance reaffirms key principles of international humanitarian law, including that final beneficiaries of humanitarian aid must not be vetted against EU sanctions.
The implementation and enforcement of restrictive measures are primarily the responsibility of EU Member States. Competent authorities in Member States must assess whether there has been an infringement of the relevant Council Regulation and take adequate steps. These Regulations generally include:
In the absence of such harmonisation at the Union level, national systems differ significantly as far as criminalisation of the violation of Union restrictive measures is concerned. In 12 Member States, the violation of Union restrictive measures is solely a criminal offence. In 13 Member States, the violation of Union restrictive measures can amount to an administrative or a criminal offence.7 As far as these 13 Member States are concerned, the criteria according to which the conduct falls within one or the other category are usually related to its gravity (serious nature), either determined in qualitative (intent, serious negligence) or quantitative (damage) terms,8 but they are different in each Member State. In two Member States, the specific offence of violation of Union restrictive measures can currently only lead to administrative penalties.9
Therefore, law enforcement and judicial authorities currently do not have the right tools and resources available to prevent, detect, investigate and prosecute the violation of Union restrictive measures, including through cross-border cooperation facilitated by EU agencies, notably Europol and Eurojust. For example, Member State A imposes a higher monetary threshold for an offence related to the violation of Union restrictive measures to be deemed serious enough for it to be treated under criminal law or imposes a significantly lower minimum-maximum sentence, which could also be caused by differences in aggravating circumstances, than Member State B. The consequence of these differences could be that either cross-border law enforcement and judicial cooperation might be hampered or similar investigative tools might not be available.
Another example relates to the mutual recognition of freezing and confiscation orders. Art. 3(2) of Regulation (EU) 2018/180514 provides for the verification of dual criminality for offences, which are not listed in Art. 3(1), which applies in the case of the violation of sanctions. This means that the recognition and/or execution of freezing and confiscation orders from issuing authorities in Member States which have not criminalised the violation of Union restrictive measures, may be refused by executing judicial authorities in Member States which have criminalised it. As a result of these impediments, in practice only very few individuals or legal persons responsible for the violations of Union restrictive measures are effectively held accountable. For instance, due to a lack of cross-border cooperation, individuals and entities whose assets are theoretically frozen or whose activities are restricted, continue to be able to access their assets in practice and support regimes that are targeted by Union restrictive measures. Also, the proceeds generated by the exploitation of goods and natural resources traded in violation of Union restrictive measures may allow the individuals targeted by those restrictive measures to purchase arms and weapons with which they can continue to perpetrate their crimes.
Enhancing the dissuasive effect of criminal sanctions by raising the possibility of being criminally prosecuted, the proposal will strengthen the enforcement of restrictive measures in the Member States. It thereby complements the penalty provisions of the Regulations adopted on the basis of Art. 215 TFEU (see above). In particular, the harmonisation of definitions and sanctions will help to overcome the current fragmented approach. It will also decrease the risk of forum shopping by offenders and increase the deterrent effect of sanctions. In conclusion, the violation of Union restrictive measures should be identified as an area of crime for the purposes of Art. 83(1) TFEU.
It should also be considered that the proposed Council Decision and subsequent Directive, approximating criminal definitions and sanctions related to the violation of Union restrictive measures, complement and ensure consistency with other policy areas. In particular, they will complement the Commission proposal for a Directive on asset recovery and confiscation, which was also presented on 25 May 2022.18 Following the adoption of all three instruments, the rules on tracing and identification, freezing, and confiscation measures will become applicable to property related to the violation of Union restrictive measures. In the end, proceeds of the violation of Union restrictive measures, for example in instances where individuals and companies would make funds available to those subject to targeted financial sanctions (i.e. asset freezes), could become the object of confiscation measures. At the same time, instrumentalities used to pursue the violation of restrictive measures could be confiscated as well.
The Directive will apply to violations of Union restrictive measures that the Union has adopted on the basis of Art. 29 TEU or Art. 215 TFEU, such as measures concerning the freezing of funds and economic resources, the prohibitions on making funds and economic resources available, the prohibitions on entry into the territory of a Member State of the European Union, and sectoral economic measures, including arms embargoes.
In addition, the Directive will oblige Member States to ensure that legal persons that benefit from the commission by others of offences in violation of Union restrictive measures are punishable by fines. The maximum limit should be not less than a certain percentage of the total worldwide turnover of the legal person in the business year preceding the fining decision. The liability of legal persons would not exclude the possibility of criminal proceedings against natural persons who are the perpetrators of the criminal offences mentioned above.
The Directive will also include rules on jurisdiction. Following the example of Art. 11 of the PIF Directive and Art. 19 of Directive (EU) 2017/541 on combating terrorism29 and taking into account the specific nature of the violation of Union restrictive measures,30each Member State will need to establish jurisdiction over the offences referred to above in the following situations: 041b061a72