Harmonization of criminal law: EU sets a unified standard for sanctions violations

published on 7 June 2024 | reading time approx. 2 minutes

In May, Directive (EU) 2024/1226 (hereinafter referred to as the Directive), which criminalizes sanctions violations, entered into force. By adopting this Directive, EU sets a new standard that define certain violations of sanctions as criminal offences. Until now, the penalties for breaches of EU sanctions have been significantly different in every Member State, also inconsistent and often not dissuasive enough.

As a result, a new Directive was introduced to provide more clarity and uniformity in the EU. Now, it is expected that in the future criminal offences for sanctions violations will be determined by the EU, also that penalties for offences will be tightened. For example, in Germany it is expected that significantly higher penalties will be imposed.

Ensuring the effective application of EU sanctions is the key objective of this Directive. Therefore, Member States must implement effective, proportionate, and dissuasive criminal and non-criminal penalties. These penalties must also address the circumvention of sanctions.

According to the Directive, the following conduct constitutes a criminal offence if it is 1) intentional and 2) in violation of a prohibition, restriction, or obligation that constitutes an EU restrictive measure or is set out in a national provision implementing an EU restrictive measure:

Making funds or economic resources available directly or indirectly to, or for the benefit of, a sanctioned person
Failing to freeze funds or economic resources belonging to, or owned, held, or controlled by, a sanctioned person
Enabling sanctioned individuals to enter or transit through the territory of a Member State
Entering into or continuing transactions with a third State, bodies of a third State, or entities directly or indirectly owned or controlled by a third State or its bodies, including the awarding or continued execution of public or concession contracts
Trading, importing, exporting, selling, purchasing, transferring, transiting, or transporting sanctioned goods
Providing financial services, performing financial activities, or offering other prohibited services
Circumventing EU restrictive measures
Breaching or failing to fulfill conditions under authorizations granted by competent authorities.

More specific penalties for natural persons are outlined in Article 5 of the Directive. As legal persons are also subject to EU sanctions regulations, they should be held liable for offences related to the violation of these sanctions. The liability of legal persons is described in Article 6, and penalties for legal persons are detailed in Article 7 of the Directive.

Additionally, some important legal concepts described in this Directive include:

Serious negligence should be interpreted in accordance with national law, taking into account relevant case law from the Court of Justice of the European Union.
Goods include items such as military technology and equipment, software, and technology listed in the Common Military List of the EU adopted on 20 February 2023, or in Annexes I and IV of Regulation (EU) 2021/821.
Aggravating circumstances should be understood as facts enabling a national judge or court to impose more severe sentences for the same offence than would normally be imposed without such facts, or as the possibility to treat several criminal offences cumulatively to increase the penalty level.

Member States must implement the necessary laws to comply with this Directive by 20 May 2025.