Debate: Definition of criminal offences and penalties for the violation of Union restrictive measures
Date: MONDAY, 11 MARCH 2024
Speaker: Sophia in 't Veld
Country: Poland
Language: EN

Let me give a few examples illustrating why we need this legislation. Since the start of the Russian invasion and the ensuing EU sanctions, export of goods from the EU to Russia dropped by 47%, but exports from the EU to Armenia, Kazakhstan, Georgia, Uzbekistan and Kyrgyzstan grew by 48% in the same period. That is not a coincidence. Second example, I quote the Irish head of the Department of Finance Anti-Money Laundering Unit. She says, ‘authorities could be aware of cases where Russian money was moving through funds based in the International Financial Services Centre in Dublin, but it cannot actually do anything about it’. Third example, while Ukrainian soldiers are fighting on the muddy battlefields, we witness a huge increase of car exports from Germany to Russia via Kyrgyzstan, oligarchs holidaying at the Cote d’Azur and their kids attending posh European schools, and we see nodal modes like Cyprus being far behind in freezing assets of Russian oligarchs. Now, since the start of the Russian invasion of Ukraine, the EU has adopted 13 packages of sanctions, and that includes putting asset freezes and travel restrictions for no less than 1 718 individuals in 419 entities such as banks, companies and media organisations. They prohibit the imports of Russian oil, diamonds and other raw materials. They prohibit the exports of military technology and dual-use goods to Russia and luxury goods. It restricts Russia’s access to the EU’s capital and financial markets, and prohibits the provision of all sorts of services like advertising, brokering services and legal advice. However, in the real world, laws can and will be broken because crooks make enormous amounts of money with it, and this, of course, benefits the Russian invasion. Therefore, it needs to stop. But the huge divergences in legislation and enforcement allow them to go forum shopping, searching for the weakest spots, the lowest chance to get caught and facing the lowest possible sentences and fines. So, therefore, this directive is supposed to bring an end to those practices and make the sanctions more effective. Now, Parliament and the Council had a different approach and ambitions. The Council wanted to limit the scope exclusively to the simple fact of criminalising the violation of Union restrictive measures, and they were unwilling to change a jot to their national criminal law systems; whereas Parliament focused on harmonisation and enforcement, because it’s not good enough to have sanctions or even criminalise the violation of sanctions when there is no proper enforcement, and when Member States pretty much do what they like. The problem is, of course, that the Member States know that the European Commission is not enforcing very strictly, looking the other way, and there are no serious consequences. Therefore, Parliament wanted to close all the loopholes. So, due to the reluctance of the Council and the enormous time pressure, we did not manage to close all the holes. However, there is progress compared to the current situation. First of all, violation and circumvention of sanctions will be criminalised in all Member States. No escape. A modest degree of harmonisation of penalties has been achieved and the enforcement cooperation between the Member States, the Commission and EPPO will be structured, not ad hoc. I regret that the Council was unwilling to go further and to close all the loopholes and to make sure that Putin’s friends have nowhere to hide any more. But for us, it was also important to conclude the file and give a strong signal to our friends in Ukraine. Therefore, we accepted this outcome, even if it’s less ambitious. It is very important that we say to our Ukrainian friends, we stand with you and do whatever we can.