The bloc's executive arm put forward its plans designed to establish common rules across the European Union, which it said would make investigating and punishing violations of so-called restrictive measures — failure to enforce sanctions — more seamless.
A harmonized, bloc-wide approach to penalizing sanction violators would eliminate a patchwork legislative framework and establish consistent penalties across all member states, the commission said. The rules would close existing legal loopholes and deter those who might violate the sanctions.
Věra Jourová, EU vice president for values and transparency, said that people who attempt to get around the bloc's sanctions must be punished.
"The EU will carry on cracking down on those helping Russia to finance its war against Ukraine," Jourová said.
"The EU is showing once again that it is united in this effort. Harmonizing penalties for violating EU sanctions means no more loopholes, no more safe havens and no more playing the system — we're getting tougher, we've changed the system," she continued.
The European Council, which is made up of EU government representatives, has formalized its decision to add the violation of sanctions to the formal list of EU crimes. Members said the move on Nov. 28 would prevent potential violators from shopping around to find member states with more lax enforcement.
Most member states categorize failure to implement sanctions as a criminal offense, but some have broad definitions for failure to implement sanctions, such as "breach of EU regulations," the council said earlier in the week. Others provide a list of forbidden conduct.
The proposals floated on Friday by the commission aim to standardize the bloc's position, and include a range of elements designed to thwart inconsistent approaches to sanction violations.
The proposals include a list of criminal offenses that violate EU sanctions, such as making money available to a sanctioned person or organization and failing to freeze their funds or allowing them to move into one of the member states. It will also be an offense to trade with sanctioned entities.
The proposals also said that bypassing restrictive measures would be an offense, and include a set of common standards for penalties in the bloc. Depending on the offense, a person could face up to five years in prison or a company could be hit with a financial penalty of no less that 5% of its worldwide turnover.
The European Parliament and the council will now discuss the proposals as part of the legislative process.
The EU expanded its sanctions against Russia in July to include a ban on Russian gold imports in response to the Kremlin's war in Ukraine, with measures up for review at the end of January 2023.
The U.K. has also imposed stringent sanctions against Russia. And, on Monday, the Solicitors Regulation Authority published guidance that it said would ensure law firms understand their obligations and remain compliant with rules governing interaction with sanctioned people or companies.
--Additional reporting by Alex Davidson and Ronan Barnard. Editing by Ed Harris.
For a reprint of this article, please contact reprints@law360.com.
