Due to the Russian invasion of Ukraine the EU has adopted an unprecedented sanctions regime against Russia. However, the Commission found that the inconsistency in the enforcement of such sanctions undermines their efficiency. Therefore, the EU is proposing the establishment of a harmonised enforcement of EU sanctions across member states.

The proposal defines the EU restrictive measures, which include the prohibition of trading, importing, exporting, selling, purchasing, transferring, transiting or transporting goods or services, travel bans and freezing funds. Such measures include sectoral economic and financial measures either on the provision of financial services or the performance of financial activities or on the provision of services other than financial services. The violation, circumvention, non-compliance or provision of misleading or false information on such prohibitions would constitute a criminal offence across all Member States.

Penalties for natural persons for the criminal offences related to the violation of Union restrictive measures should be effective, dissuasive and proportionate. To that end the maximum term of imprisonment is set for at least 5 years. Accessory penalties or measures such as fines, disqualification, bans etc. shall also be available in the criminal proceedings.

Furthermore, Member States shall ensure that legal persons can be held liable for offences related to the violation of such restrictive measures, where the lack of supervision or control lead to the commission of a criminal offence.

The proposed penalties for legal persons include exclusion from entitlement to public benefits or aid; exclusion from access to public funding, including tender procedures, grants and concessions; disqualification from the practice of business activities;  withdrawal of permits and authorisations to pursue activities which have resulted in the relevant criminal offence; placing under judicial supervision; judicial winding-up; closure of establishments used for committing the criminal offence; and where it is in the public interest, publication of all or part of the judicial decision relating to the criminal offence committed and the penalties or measures imposed, without prejudice to rules on privacy and the protection of personal data.

The fines to be imposed on legal persons shall be calculated based on the total worldwide turnover.

The proposal sets out rules for establishing the jurisdiction, for the investigation and prosecution and for the cooperation of the national authorities involved in the administrative and criminal enforcement.

Although the proposed Directive has already been approved by the Parliament earlier this week, it still needs to be formally approved by the Council. Once the approvals are obtained, it will enter into force twenty days after its publication in the Official Journal of the EU, after which Member States will have one year to transpose it into national legislation.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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