EU proposes tougher rules on assets of oligarchs
Didier Reynders - Photo © European Union 2022
(BRUSSELS) - The European Commission proposed Wednesday new EU-wide rules on freezing and confiscating the assets of criminals and oligarchs who violate sanctions imposed against them.
The proposals add the violation of EU restrictive measures to the list of EU crimes, and there will be new reinforced rules on asset recovery and confiscation, which will also contribute to the implementation of EU restrictive measures.
With the Russian aggression on Ukraine ongoing, the EU executive says it is paramount that EU restrictive measures are fully implemented and the violation of those measures must not be allowed to pay off.
"We must ensure that persons or companies that bypass the EU restrictive measures are held account. Such action is a criminal offence that should be sanctioned firmly throughout the EU," said Justice Commissioner Didier Reynders: "At present, divergent criminal definitions and sanctions as regards the violation of the restrictive measures can still lead to impunity. We need to close the loopholes and provide judicial authorities with the right tools to prosecute violations of Union restrictive measures."
There are currently over 40 regimes of restrictive measures in place in the EU and the rules criminalising the violations of such measures vary across Member States.
The EU has in place a series of sanctions against Russian and Belarusian individuals and companies, as well as sectoral measures some of which date back to 2014. 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 complex legal and financial structures.
The Commission is proposing firstly to add the violation of restrictive measures to the list of EU crimes. It says this will allow to set a common basic standard on criminal offences and penalties across the EU. In turn, such common EU rules would make it easier to investigate, prosecute and punish violations of restrictive measures in all Member States alike.
The violation of restrictive measures is a crime in a majority of EU Member States. It is also a particularly serious crime, since it may perpetuate threats to international peace and security, and has a clear cross-border context, which requires a uniform response at EU level and global level.
Accompanying the proposal, the Commission is also setting out how a future Directive on criminal sanctions could look like in a Communication with an Annex. The potential criminal offences could include: engaging in actions or activities that seek to directly or indirectly circumvent the restrictive measures, including by concealing assets; failing to freeze funds belonging to, held or controlled by a designated person/entity; or engaging in trade, such as importing or exporting goods covered by trade bans.
Once the EU Member States agree on the Commission's initiative to extend the list of EU crimes, the Commission will present a legislative proposal based on the accompanying Communication and Annex.
Secondly, the Commission is putting forward a proposal for a Directive on asset recovery and confiscation. The core objective is to ensure that crime does not pay by depriving criminals of their ill-gotten gains and limiting their capacity to commit further crimes. The proposed rules will also apply to the violation of restrictive measures, ensuring the effective tracing, freezing, management and confiscation of proceeds derived from the violation of restrictive measures.
The proposal modernises EU asset recovery rules, among others, by:
- Extending the mandate of Asset Recovery Offices to swiftly trace and identify assets of individuals and entities subject to EU restrictive measures. These powers will also apply to criminal assets, including by urgently freezing property when there is a risk that assets could disappear.
- Expanding the possibilities to confiscate assets from a wider set of crimes, including the violation of EU restrictive measures, once the Commission proposal on extending the list of EU crimes is adopted.
- Establishing Asset Management Offices in all EU Member States to ensure that frozen property does not lose value, enabling the sale of frozen assets that could easily depreciate or are costly to maintain
Towards a Directive on criminal penalties for the violation of Union law on restrictive measures
Asset recovery and confiscation
Proposal for a Directive on asset recovery and confiscation
EU strategy to tackle organised crime for 2021-2025