Background
The European Union continues to expand its sanctions regime against Russia and Belarus. The latest – the 18th – EU Russia/Belarus sanctions package was published on 19 July 2025, and included a range of additional sanctions, mainly targeting the Russian energy, banking and military industries, but also individuals and the Russian shadow fleet (see our previous blog post on the 18th sanctions package).
EU sanctions against Russia are enacted in the form of regulations, meaning they enter into force without the need for national transposition and become directly binding in the EU Member States. This has ensured that EU sanctions apply largely uniformly across the EU. However, the enforcement of EU sanctions, including criminal and administrative sanctions in case of violation, are left to each EU Member State under the EU treaties and their distribution of authorities as between the EU and the EU Member States. Thus, while substantive EU sanctions restrictions are the same throughout the EU, the consequences for violations differ considerably among EU Member States.
The EU Sanctions Directive, the missed transposition deadline and potential infringement procedures
The EU has identified divergent EU sanctions enforcement practices and penalties for EU sanctions violations as a concern. It adopted Directive (EU) 2024/1226 (the “EU Sanctions Directive”), setting out common definitions of criminal offences and penalties for violations of EU sanctions. The aim is to increase the efficiency of EU sanctions and prevent circumvention at the enforcement level. EU Member States were required to transpose the EU Sanctions Directive and its minimum standards for penalties for EU sanctions violations into national law by 20 May 2025.
Baseline requirements under the EU Sanctions Directive include:
- The obligation for member states to treat intentional violations of EU sanctions as criminal offences. This covers breaches involving asset freezes, trade restrictions, and also attempts or aiding and abetting such violations. The EU Sanctions Directive extends liability to serious negligence in cases involving items on the EU’s Common Military List or dual-use items.
- The obligation to ensure that legal persons (i.e. companies) can be held liable for criminal offences related to sanctions violations, with penalties including fines.
- The obligation to adhere to minimum requirements concerning maximum penalties for both natural and legal persons.The obligation to take measures to ensure that certain aggravating factors – such as involvement of organized crime or repeat offenses – are considered under national law to appropriately increase penalties.
- The obligation to provide minimum limitation periods for criminal offenses, allowing sufficient time for investigation, prosecution, trial, and adjudication. These periods generally include at least five years for serious sanctions violations.
For a more in-depth discussion on the EU Sanctions Directive, please view our on-demand webinar which is available here.
On 24 July, just over two months after the 20 May 2025 deadline has passed, the EU Commission has decided to open infringement procedures by sending a letter of formal notice to 18 EU Member States that have failed to communicate full transposition of the Directive to the Commission. Such EU Member States now have two months to respond, complete their transposition, and notify the EU Commission of their measures. Failing this, or if the EU Commission deems the response unsatisfactory, it can move to the next stage of the infringement procedure: the reasoned opinion. If necessary, the EU Commission may then refer the case to the Court of Justice.
Current transposition status in certain EU member states
Although 18 EU Member States have not yet fully transposed the EU Sanctions Directive into national law, examining the existing national regimes and drafts for the transposition reveal that differences among EU Member States are likely to persist. Spain, Germany, the Netherlands and France are good examples of the different stages of member state transposition.
Spain has not yet fulfilled its transposition obligation. Currently, it does not have a unified, specific criminal offense framework covering all EU sanctions violations. Instead, violations are addressed under various generic offenses, such as smuggling and money laundering. The new draft bill published in March 2025 by the Spanish Council of Ministers (see our previous blog post delving into the topic) shows that the full transposition of the directive is going to have a big effect on current legislation, as the Spanish Criminal Code will be amended and include severe penalties for sanctions violations. Furthermore, the draft bill proposes the establishment of a new joint coordination commission to monitor the effective application of EU sanctions.
Germany also failed to transpose the EU Sanctions Directive on time, even though only partial adjustments to existing legislature are required. Currently, sanctions violations are criminalized under the Foreign Trade and Payments Act (AWG) and the Foreign Trade and Payments Ordinance (AWV). In October 2024, a draft bill for implementing the EU Sanctions Directive was published. It included enhanced penalties, higher fines, and longer prison sentences for severe breaches of EU sanctions. Additionally, the Customs Criminal Office (Zollkriminalamt) was designated as the competent enforcement authority. The draft bill also criminalizes cases of serious negligence and sanctions circumvention, in line with the directive. Notably, the possibility of exempting certain de minimis violations, with a total value of less than EUR 10,000, from constituting criminal offenses, as provided for in Article 3 of the EU Sanctions Directive, has not been utilized. As of now, the draft bill has not yet been adopted. It remains uncertain whether the newly elected government will proceed with this initial draft or introduce a revised version for parliamentary consideration.
The Netherlands is in the minority of EU Member States that met the transposition deadline, as existing legislation already complied with the requirements of the EU Sanctions Directive. In the Netherlands, sanctions breaches have long qualified as criminal offences pursuant to the Dutch Sanctions Act 1977 and are prosecuted under the Dutch Economic Offences Act. In addition, criminal liability for legal and natural persons for EU sanctions violations already existed under Dutch law. The Netherlands also decided not to exempt certain de minimis violations of less than EUR 10.000 and continues to maintain longer limitation periods than those prescribed by the EU Sanctions Directive.
In France, national legislation already aligns closely with the EU Sanctions Directive. However, there are still aspects of national law that need to be amended to fully transpose the EU Sanctions Directive. In fact, transposition would require the introduction of turnover-based maximum penalties for companies in French criminal customs law. It remains unclear when France will introduce legislative measures required for full compliance with the directive.
Conclusion
Even after full transposition of the EU Sanctions Directive, enforcement practices will still vary across Member States. Although the EU Sanctions Directive encourages enhanced cooperation and coordination between competent authorities across borders, it does not establish a centralized enforcement mechanism at the EU level. Law enforcement – including investigative procedures and prosecutorial discretion – remains within the competence of each Member State.
Consequently, a fully harmonized level playing field for the enforcement of EU sanctions is unlikely to exist in the near future, even after each EU Member State transposes the EU Sanctions Directive. The EU’s push for the harmonized criminalization of EU sanctions offences signals that enforcement and prosecution of EU sanctions violations are taken seriously, and that loopholes in sanctions enforcement across EU Member States must be closed.
Companies must therefore pay close attention to legislative changes in the markets where they operate. Robust compliance measures and thorough risk assessments are essential to effectively manage these risks.
