The European Parliament adopted new rules on Tuesday to harmonize the enforcement of current EU sanctions across member states.
These rules criminalize the violation and circumvention of EU sanctions and would also introduce a common definition of sanctions violations and their minimum civil penalties. The regulation was supported by 543 members of the EU parliament, while 45 voted against it and 27 abstained.
The new law will:
• Set consistent definitions for violations, such as not freezing funds, breaching arms embargoes, transferring funds to designated entities, or providing financial services or legal advisory services in violation of sanctions.
• Define the circumvention of sanctions and make it a punishable offense, such as hiding or concealing true ownership, diverting transfers of funds, and failing to report to the relevant competent authority.
The adoption of these new rules highlight the importance of having consistent enforcement of sanctions to uphold a country’s foreign policy and national security.
Under the new directives, frozen assets will be confiscated and action will be taken either through criminal or civil proceedings, giving judges more latitude in punishing those guilty of committing sanctions-related offenses. Although the new rules will not prevent all violations of EU sanctions law, it will strengthen current regulations and create a harsher environment for illicit actors to operate.
The rules still need final approval from the Council of the EU before they become law. They will come into effect 20 days after publication into the Official Journal of the EU. Member states will then have one year to implement the rules into their own national legislation.
These rules criminalize the violation and circumvention of EU sanctions and would also introduce a common definition of sanctions violations and their minimum civil penalties. The regulation was supported by 543 members of the EU parliament, while 45 voted against it and 27 abstained.
The new law will:
• Set consistent definitions for violations, such as not freezing funds, breaching arms embargoes, transferring funds to designated entities, or providing financial services or legal advisory services in violation of sanctions.
• Define the circumvention of sanctions and make it a punishable offense, such as hiding or concealing true ownership, diverting transfers of funds, and failing to report to the relevant competent authority.
• Ensure violations are criminal offenses, with a maximum prison sentence of 5 years in all member states.
• Give member states the ability to impose monetary fines, with discretion on whether the value of those fines are based on the company’s annual turnover, or a specified maximum threshold.
• Make arms or dual-use goods trading a criminal offense in cases of serious negligence.
The adoption of these new rules highlight the importance of having consistent enforcement of sanctions to uphold a country’s foreign policy and national security.
Under the new directives, frozen assets will be confiscated and action will be taken either through criminal or civil proceedings, giving judges more latitude in punishing those guilty of committing sanctions-related offenses. Although the new rules will not prevent all violations of EU sanctions law, it will strengthen current regulations and create a harsher environment for illicit actors to operate.
The rules still need final approval from the Council of the EU before they become law. They will come into effect 20 days after publication into the Official Journal of the EU. Member states will then have one year to implement the rules into their own national legislation.
