EU Progressing on Law to Criminalize Sanctions Violations

The EU inched closer this week to adopting a law that could require member states to treat sanctions violations as criminal offenses, which could result in harsher penalties and possible prison time (see 2306090006).

The European Council and the European Parliament announced Dec. 12 they completed negotiations over the text of the law. If it’s approved by member states, the text will then be formally adopted by the council and Parliament.

The law could require EU states to define certain sanctions violations that qualify as a criminal offense, such as people or companies illegally trading with sanctioned parties, trading sanctioned goods, illegally providing financial services to sanctioned parties or jurisdictions, hiding the ownership of funds by a person or company subject to sanctions, and more. Member states also would need to ensure that penalties for those violations are met with “proportionate and dissuasive criminal penalties,” the council said, adding that the maximum penalty must include a prison sentence.

During their negotiations, the council and Parliament agreed that any party registered as a "legal person," including businesses, can be held liable for a criminal sanctions violation, including if a violation is committed by “a person with a leading position in the organization.” Penalties for those businesses could include the “disqualification of business activities and the withdrawal of permits and authorizations to pursue their economic activities.”