In a world of increasing conflicts and tensions between states and other actors, sanctions play a continuously more important role in international law and politics as a measure to influence the behaviour of countries and individuals without or in addition to engaging in armed conflict. For businesses, sanctions constitute a significant compliance risk. Sanctions can restrict businesses from importing and exporting certain products and services, engaging in trade with designated natural and legal persons, and be obliged to comply with asset freezing orders, etc. Violation of sanctions carries the risk of enforcement and penalisation against the offender. However, the extent of enforcement actions against businesses and individuals for violating EU sanctions has been limited and, arguably, penalties imposed have been soft and lacked uniformity across EU Member States, all posing a risk of impairing the effectiveness and purposes of EU sanctions measures. In response to this, the European Parliament and the Council have adopted a new directive on the definition of criminal offences and penalties for the violation of Union restrictive measures. The directive establishes minimum rules concerning the definition of criminal offences and penalties with regard to the violation of EU sanctions and increases uniformity in how EU Member States enforce and penalise EU sanctions violations.
This Master Thesis analyses the present state of the law for enforcement and penalisation of violation of EU sanctions whilst considering the recently adopted EU directive. In this context, the Master Thesis provides answers to several research questions. Firstly, the Master Thesis explains the concept of EU sanctions and the procedure for adoption of EU sanctions whilst considering the legal framework for enforcement and penalisation of violations of EU sanctions. Secondly, the Master Thesis explains and analyses case law from EU Member States in which natural and legal persons have been penalised for violation of EU sanctions to establish the state of the law for penalisation of violation of EU sanctions in the EU. The analysis shows that there are significant differences, but also similarities, in how violation of EU sanctions is punished in EU Member States.
The Master Thesis, thirdly, explains and analyses the concept of EU crimes and the impact of having added sanctions violations to the list of EU crimes. Fourthly, the Master Thesis explains and analyses the main provisions of the new directive which requires EU Member States to ensure that violating EU sanctions is punishable by effective and proportionate criminal penalties. The analysis shows that the directive represents a change to the current state of the law for violation of EU sanctions setting new liability and penalty standards which generally toughen the length of imprisonment and increase the fining level. Comparing the directive and the analysed case law reveals discrepancies between the penalties hitherto imposed by EU Member States and the directive which some EU Member States potentially will have to address when transposing the directive into national law.
Finally, the Master Thesis draws relevant perspectives to the impact of the directive on businesses located or operating in the EU, to sanctions enforcement standards in the U.S., and to a potential, future enforcement role of the European Public Prosecutor’s Office.