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EU cracks down on the criminal enforcement of sanctions violations

With a ninth sanctions package against Russia in the making, the EU’s sustained response to the war in Ukraine has demonstrated that sanctions will remain at the forefront of EU policymaking.  The array of sanctions adopted in 2022 is unprecedented (see our dedicated collection on Russia sanctions here), and many businesses with an international footprint are now having to navigate an ever more complex regulatory landscape.

Turning its attention to enforcement, and following on the Council’s earlier decision to recognise sanctions violations as an ‘EU crime’, the European Commission has now issued a proposal for a Directive to harmonise the criminal enforcement of sanctions across the EU (the Proposed Directive). 

If the Proposed Directive is adopted, many national legislators are likely to have to revise their current enforcement frameworks, and may seize this opportunity to move away from an often patchy approach to enforcement to adopt a more comprehensive approach as the intensity and importance of sanctions continues to increase.  For companies within the scope of applicability of EU sanctions, the Proposed Directive is therefore likely to mean that they will want to review the robustness of their sanctions compliance framework in light of the significant penalties mandated for violations and the proposed liability framework for enforcing against companies which may make it easier for enforcement actions to be brought. 

We summarise the key takeaways of the Proposed Directive in the article below, provide some initial thoughts on what the Proposed Directive may mean for the enforcement of sanctions in Belgium, Germany and the Netherlands, and share our perspective on recent enforcement developments in the UK.  

Should you have any questions on the matters discussed in this article, please contact any of its authors or your usual contact at Allen & Overy LLP.

Harmonising penalties for violating EU sanctions means no more loopholes, no more safe havens and no more playing the system

Věra Jourová, Vice-President for Values and Transparency

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