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The European Commission has put forward a proposal to harmonise criminal offences and penalties for the violation of EU sanctions.

The proposal follows a decision by the Council which identified the violation of EU sanctions as an EU crime (see here for our previous blog post on this) and sets out common EU rules, which will make it easier to investigate, prosecute and punish violations of EU sanctions in all Member States alike.

The main elements of the proposal include:

A list of criminal offences, which violate EU sanctions, such as:

  • making funds or economic resources available to, or for the benefit of, a designated person, entity or body;
  • failing to freeze these funds;
  • enabling the entry of designated people into the territory of a Member State or their transit through the territory of a Member State;
  • entering into transactions with third countries, which are prohibited or restricted by EU restrictive measures;
  • trading in goods or services whose import, export, sale, purchase, transfer, transit or transport is prohibited or restricted;
  • providing financial activities which are prohibited or restricted; or
  • providing other services which are prohibited or restricted, such as legal advisory services, trust services and tax consulting services.

Offences will cover circumventing an EU restrictive measure: this means bypassing or attempting to bypass restrictive measures by concealing funds  or concealing the fact that a person is the ultimate owner of funds.

Common basic standards for penalties: depending on the offence, the individual person could be liable to a maximum penalty of at least five years in prison; companies could be liable to penalties of no less than 5% of the total worldwide turnover of the legal person (company) in the business year preceding the fining decision.

The Commission’s proposal will now have to go through the European Parliament and Council before it gets adopted.

Author

Sunny Mann is the global chair of our International Trade Practice Group. He is a partner based in the London office, and has also worked in our Firm's Washington DC, New York, Sydney and Hong Kong offices.
Sunny advises clients (including numerous FTSE 100 and Fortune 100 businesses) on compliance and investigations with respect to export controls, trade sanctions and anti-bribery rules. Sunny is ranked as a Band 1 practitioner by both Legal 500 and Chambers, and was described as "excellent, with a calm and very practical approach”. Legal 500 most recently noted that Baker McKenzie “have a great team led by Sunny Mann, who has a reputation for being a strong and fair leader with fantastic people management skills to complement his undoubted trade controls expertise”.
Sunny also chairs our Geopolitical Risks Taskforce and oversaw our Firm’s support to clients responding to Russia’s invasion of Ukraine. The team was at the forefront of the market, having advised around one quarter of each of the Fortune 100, FTSE 100, CAC 40 and DAX 30 communities.
Sunny is a Visiting Professor at King’s College, London (teaching sanctions on the LLM course) and was for 15 years a Visiting Professor at the College of Europe, the leading institute for post-graduate European studies, where he taught an LLM course on Corporate Compliance.
Sunny has also served as a board member and trustee at Battersea Dogs and Cats Home, one of the oldest animal shelters.

Author

Olof König is a member of Baker McKenzie's International Commercial & Trade Group in Stockholm. His main practice areas are export, import and sanctions compliance. Mr. König joined the Firm in 2010.

Author

Dimitris Mourkas is a Knowledge Lawyer in Baker McKenzie, London office.