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Recent Trends In Sanctions Enforcement In The EU

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G7 Creates New Coordination Mechanism to Prevent Russia from Benefiting from its Economy

As the G7 marks the one-year anniversary of Russia’s invasion of Ukraine, the G7 has created a new enforcement coordination mechanism to “enhance compliance and enforcement of our measures and prevent Russia from enjoying the benefits of the G7 economy.” The International Group of Seven (“G7”) is an intergovernmental forum with members from the United States, United Kingdom, Germany, France, Italy, Canada, Japan, and the European Union as a “non-enumerated” member.

What are the recent trends in sanctions enforcement in the EU?

The EU currently has over 40 different sanctions in place. Some of these implement sanctions adopted by the United Nations, while others have been voluntarily adopted by the EU. Additionally, some EU member states have imposed their own national sanctions.

In response to Russia’s military attack on Ukraine, the EU has adopted numerous sanctions against Russia, including financial and trade sanctions. However, to date, violations of EU sanctions are not considered one of serious EU crimes, and they do not entail criminal sanctions at the EU level. This lack of uniformity in national regimes and criminal penalties for sanctions violations led the European Commission (“Committee”) to establish a “freeze and seize” task force to ensure coordination between Member States and EU institutions such as Europol and Eurojust.

Against this background, the European Commission announced on May 25, 2022, that the European Council should add “violation of restrictions” to the list of EU offenses. The proposal aims to set common EU rules to investigate, prosecute, and punish violations of EU sanctions in all Member States.

What are the maximum penalties for violations?

Penalty regimes vary widely between Member States, with the maximum period of imprisonment ranging from two to five years in 14 Member States, and eight Member States not specifying any maximum period of imprisonment and fines ranging from €1,200 to €5,000,000. Legal entities may face criminal liability for violations of EU sanctions in 14 Member States.

Enforcement trends in EU countries that are not independent members of the G7 include:
  • In the Netherlands, violations of EU-Russia sanctions are treated under criminal law according to the Dutch Sanctions Act 1977 and the Economic Crimes Act, resulting in high fines for violations.
  • In the Czech Republic, authorities have been less active in enforcing EU sanctions, but they have adopted a new sanctions law to include entities on Czech national or EU sanctions lists and the rules for adopting domestic restrictive measures for certain entities subject to sanctions under relevant EU regulations.
  • In Spain, enforcement of sanctions violations has been historically low, with only a few known cases of Russian sanctions enforcement.
  • In Northern Europe, enforcement of sanctions violations has historically been fairly low, but there has been an increase in ongoing investigations across the region.

Enforcement of EU sanctions in various EU Member States is generally slow but varies by jurisdiction. However, there is a clear trend that law enforcement in the EU is on the rise, and there is an expectation of a significant increase in law enforcement actions by EU member state authorities in the near future. The European Commission’s proposal on the harmonization of criminal defense and penalties is expected to strengthen sanctions enforcement on the part of the EU, particularly in relation to EU sanctions against Russia.

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