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EU Plans New Criminal Standards for Sanctions Violations and Asset Seizures

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The European Union (EU) has issued a new plan to establish common criminal standards for the violation of “restrictive measures” including sanctions. In its proposal, the Commission notes that, while most Member States categorize the violation of such measures as a criminal offense, “some have broad definitions in place, such as ‘breach of UN and EU sanctions’ or ‘breach of EU regulations’, whereas others have more detailed provisions.” 

It argues that this not only makes it harder to apply EU policy consistently and limits the deterrent effect of sanctions, it “may even lead to forum shopping by offenders and ultimately their impunity because they could choose to conduct their activities in the Member States that provide for less severe responses to the violation of Union restrictive measures.” The crimes covered in the proposal include the trafficking of humans, drugs, and arms, money laundering, counterfeiting of means of payment, and organized crime. 

The announcement comes as the EU looks to further pressure Russian political, military, and business elites over the invasion of Ukraine. Justice Commissioner Didier Reynders notes that breaching EU sanctions on Russia is currently a criminal offense in only 12 of the 27 EU Member States.

Asset seizure proposal

The Commission has also issued a new strategy on asset recovery and confiscation. Its plan includes:

  • Extending the mandate of Asset Recovery Offices to swiftly trace and identify assets of individuals and entities subject to EU restrictive measures
  • Enabling the confiscation of assets for a wider set of crimes, including the violation of EU restrictive measures, once the common criminal standards plan is adopted
  • Establishing Asset Management Offices in all EU Member States to ensure that frozen property does not lose value, enabling the sale of frozen assets that could easily depreciate or are costly to maintain

Commenting, European Commission Vice President Margaritis Schnias said: “Many times we see assets recovery and confiscation of the small fry, whereas the big sharks find ways to evade.” So far the EU has imposed asset freezes and travel plans on over 1,000 people in response to the invasion of Ukraine, seizing assets worth almost 10bn Euros.

Next steps

Before the proposals can be enacted, they require unanimous approval from EU governments. As this will require amendments to criminal law in many jurisdictions, some analysts have noted the process could take months – or even years. However, the urgency of the situation in Ukraine may accelerate progress on these measures, meaning compliance teams should monitor announcements from EU policymakers closely for any progress and updates.

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Originally published May 26, 2022, updated May 26, 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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