Ukraine: Commission proposes to criminalise sanctions violations
Vera Jourova - Photo © European Union 2022
(BRUSSELS) - As Russia continues its aggression on Ukraine, the European Union put forward Friday a proposal to harmonise criminal offences and penalties for the violation of EU restrictive measures.
The EU executive sees as essential that EU restrictive measures are fully implemented and the violation of those measures does not pay off. The new proposal sets out common EU rules, which will make it easier to investigate, prosecute and punish violations of restrictive measures in all Member States alike.
"EU sanctions must be respected and those trying to get around them must be punished," said EC vice-president Vera Jourova: "The EU will carry on cracking down on those helping Russia to finance its war against Ukraine."
The implementation of EU restrictive measures following the Russian attack on Ukraine shows the complexity of identifying assets owned by oligarchs, who hide them across different jurisdictions through elaborate legal and financial structures. The proposed Directive will establish the same level of penalties in all Member States. Thereby it will close existing legal loopholes and increase the deterrent effect of violating EU sanctions in the first place. The main elements of the proposal include:
- A list of criminal offences, which violate EU sanctions, such as:
- making funds or economic resources available to, or for the benefit of, a designated person, entity or body;
- failing to freeze these funds;
- enabling the entry of designated people into the territory of a Member State or their transit through the territory of a Member State;
- entering into transactions with third countries, which are prohibited or restricted by EU restrictive measures;
- trading in goods or services whose import, export, sale, purchase, transfer, transit or transport is prohibited or restricted;
- providing financial activities which are prohibited or restricted; or
- providing other services which are prohibited or restricted, such as legal advisory services, trust services and tax consulting services.
- Offences will cover circumventing an EU restrictive measure: this means bypassing or attempting to bypass restrictive measures by concealing funds or concealing the fact that a person is the ultimate owner of funds.
- Common basic standards for penalties: depending on the offence, the individual person could be liable to a maximum penalty of at least five years in prison; companies could be liable to penalties of no less than 5% of the total worldwide turnover of the legal person (company) in the business year preceding the fining decision.
The proposal will now be discussed by the European Parliament and the Council as part of the ordinary co-legislative procedure.
Commission proposal to criminalise evasion of EU sanctions - guide
Press release – The EU proposes rules on freezing and confiscating assets (March 2022)