European Commission suggests criminal liability for violating sanctions against Russia

The European Commission said in its press release on December 2:

“While the Russian aggression on Ukraine is ongoing, it is paramount that EU restrictive measures are fully implemented and the violation of those measures does not pay off. The Commission 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,” the statement says.

Implementation of EU restrictive measures after the Russian attack on Ukraine demonstrated difficulty of identifying assets belonging to oligarchs who hide them in different jurisdictions through sophisticated legal and financial structures.

Directive proposed by the European Commission aims to establish the same level of fines in all member states.

Main elements of proposal include a list of criminal offenses that violate EU sanctions, such as: providing funds or economic resources at the disposal or for the benefit of sanctioned person, legal entity or body;  failure to freeze these funds; enabling entry of sanctioned persons into the territory of member state or their transit through the territory of member state; carrying out transactions with third countries that are prohibited or limited by EU restrictive measures; trade in goods or services, import, export, sale, purchase, transfer, transit or transportation of which is prohibited or restricted; implementation of financial activities that are prohibited or restricted; or providing other services that are prohibited or restricted, such as legal advisory services, trust services and tax advisory services.

Offenses will also cover circumvention of EU restrictive measures.

In addition, European Commission's proposal contains common basic standards of punishment: depending on offense, individual may be sentenced to maximum of at least five years of imprisonment;  companies can bear responsibility in the amount of at least 5% of total worldwide turnover of legal entity (company) for commercial year preceding the decision on financing.

Proposal will now be discussed by the European Parliament and EU Council as part of normal procedure.

In May 2022, the European Commission proposed to add violations of EU restrictive measures to the list of EU crimes. At the same time, the Commission proposed new, strengthened rules on the return and confiscation of assets, which will also contribute to implementation of EU restrictive measures. Proposals come in the context of ‘Freeze and Seize' Task Force set up in March.

• Following the adoption on 28 November of the Council Decision identifying the violation of Union restrictive measures as an area of serious crime that meets the criteria set out in Article 83(1) of the TFEU, the Commission is now putting forward this proposal for a Directive on the violation of Union restrictive measures, as a second step.