European Union: EU Council Adds Sanctions Violations To List Of 'EU Crimes' And EU Commission Proposes Measures For Asset Forfeiture And Hybrid Tribunal December 1, 2022

The EU Council is empowered by Article 83(1) of the Treaty for the Functioning of the European Union (TFEU) to establish de minimis threshold rules with respect to certain serious cross-border offences (commonly known as 'EU crimes') such as terrorism, human trafficking, illicit drug trafficking, money laundering and corruption.

On November 28, 2022, the EU Council unanimously decided to include sanctions violations in the list of EU crimes.

How will this impact sanctions enforcement?

Until now, enforcement of breaches of economic sanctions (referred to as 'restrictive measures') have been solely within EU member state discretion. While the majority of states categorised the violation of restrictive measures as a criminal offence, EU Member States had different criteria for conduct which constituted a criminal violation. The EU Council states in its decision that these discrepancies "undermine[] the Union objectives of safeguarding international peace and security and upholding Union common values" in particular as it may contribute to "forum shopping" and impunity by offenders.

The Council's decision covers restrictive measures adopted under Article 29 of the Treaty on the European Union or Article 215 TFEU, such as those "concerning the freezing of funds and economic resources, the prohibition on making funds and economic resources available and the prohibition on entry into the territory of a Member State of the Union, as well as sectoral economic measures and arms embargoes."

Looking forward

The European Commission will now need to formulate a directive setting out the minimum rules and the penalties for a sanctions breach, and the draft will then be discussed and adopted by the EU Council and European Parliament.

The European Commission has announced plans to use frozen assets (estimated at €300 billion of Russian Central Bank reserves and €19 billion of "oligarchs'" funds) to rebuild Ukraine. The Commission is presenting potential options for EU member state consideration. The Commission has also proposed setting up a specialised UN hybrid tribunal to investigate and prosecute Russia's crimes of aggression.

It remains to be seen the exact scope and timing for finalisation of these proposals.

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