On 9 June 2023, the EU Council published draft legislation introducing EU-wide criminal penalties and stricter enforcement for the evasion of EU sanctions. The EU Council’s press release explains that it has settled its position on the terms of new legislation to align criminal offences and penalties across the EU, before commencing negotiations with the European Parliament on its finalisation.
Currently, Member States are not obligated to criminalise sanctions circumvention, however, once finalised, Member States will need to criminalise certain conduct specified in the legislation. As currently proposed, criminal conduct under the draft legislation includes:
- helping persons subject to EU restrictive measures to bypass an EU travel ban; and
- trading sanctioned goods and running transactions with states or entities which are hit by EU restrictive measures.
The proposed legislation also seeks to bolster enforcement by placing further obligations on Member States, including requiring them to:
- introduce a limitation period allowing for proper law enforcement;
- ensure measures are taken to freeze and confiscate proceeds gained from sanctions violations; and
- guarantee cooperation and coordination between the EU’s law enforcement and judicial authorities. This includes cooperating in criminal investigations with other Member States, the EU Commission and EU agencies, including Europol and the European Public Prosecutor’s Office.
The proposed legislation forms part of the EU’s current strategy to clamp down on sanctions evasions. As recently as one month ago on 9 May 2023, Ursula von der Leyen – the President of the EU Commission – announced details of the EU’s 11th sanctions package which mainly focused on sanctions enforcement (see our article here). However, the EU Council’s new proposals go one step further in introducing criminal liability, demonstrating the EU’s increasing seriousness towards tackling sanctions evasion. Now that the EU Council has settled on its general approach for the proposed legislation, this will form the basis of negotiations with the European Parliament. The purpose of such negotiations will be to reach a common position and finalise the proposed legislation.
