Ensuring the implementation of sanctions
Effective and diligent implementation of sanctions is key to ensuring their objectives are met. This is primarily the responsibility of Member States. The Commission works closely to support them in this work through:
- a regular expert group meeting on sanctions implementation which allows the Commission to reach all relevant Member State authorities
- the “Freeze and Seize Task Force” set up by the Commission in March 2022, that ensures better coordination of asset freezes against Russian and Belarussian individuals and entities
- a High-Level Group, chaired by Commissioner Mairead McGuinness, which allows all 27 Member State authorities to share information – together with representatives of EU industry and businesses
- ad-hoc stakeholder meetings held by the Commission that provide guidance and to discuss sanctions implementation with operators
The EU is coordinating its sanctions with other major international allies and partners such as the United States, the United Kingdom, South Korea, Switzerland, Japan, Australia, Canada, New Zealand and Norway, so that each country uses the most effective measures based on their economy.
Preventing circumvention
Circumventing EU sanctions is a crime. To monitor this, the Commission is:
- mobilising its trade and customs services to spot the redirection of trade flows from certain third countries acting as possible gateways to Russia
- reaching out to third countries to agree on a shared assessment, compare data and discuss remedial measures as appropriate
- gathering information on circumvention patterns from the private sector, as well as recommendations on how to better prevent this phenomenon.
As part of the 11th sanctions package adopted on 23 June, the EU introduced a new instrument to avoid their circumvention through the jurisdictions of third countries. The instrument would focus on specific high-risk goods that are proven to reach Russia via third countries, despite being covered by EU sanctions. The instrument equips the EU to prohibit the export of these goods to the countries that are used to circumvent our sanctions, and also to prohibit the provision of associated services.
The list of goods and technology subject to this measure will only be populated if no other solution can be found. This means close engagement and dialogue with each of the third countries concerned. We will always give authorities an opportunity to react to the EU's findings and conclusions. So this is a measure of last resort.
A number of other measures have allowed us to crack down further on sanctions circumvention:
We have introduced a transit ban for dual-use goods and advanced technology, firearms and aviation-related materials via the Russian territory. This means that goods can no longer transit via the territory of Russia when exported to third countries.
We have also made it obligatory for operators to contractually prohibit the re-export of these sensitive goods to Russia.
We have introduced a transit ban for certain economically critical goods via the Russian territory. This means that these goods can no longer transit via the territory of Russia when exported to third countries.
We have introduced a new measure that will require EU entities to report certain transfers of funds outside of the EU if they are owned, directly or indirectly, by more than 40% by Russians or entities established in Russia.
Together with Member States, the Commission will set up an overview of all frozen assets of the Russian Central Bank held in the EU, to know where these are located and how much they are worth. This is especially important regarding the possible use of public Russian assets to fund the reconstruction of Ukraine.
Member States have reported to the Commission over €200 billion of immobilized assets of the Russian Central Bank under the 10th sanctions package.
For the first time, the EU requires that listed persons actively disclose all their assets within the EU's jurisdiction to the national competent authority. This will help ensure that assets are traced and frozen much more effectively. Non-compliance with this obligation – i.e. non-reporting by listees - will be treated as a breach of EU sanctions law, with the consequences that follow under each Member State's national legislation, including criminal ones.
This comes in response to the increasing complexity of sanctions evasion schemes: we need to stay one step ahead of these attempts.
The 12th package of sanctions, announced on 18th December 2023, introduces a tighter obligation for Member States to proactively trace the assets of listed persons in order to prevent and detect instances of breach or circumvention of sanctions.
The EU has introduced a new listing criterion, which will allow it to sanction persons who facilitate the circumvention of sanctions.
Additionally, it will be possible to keep deceased people on the asset freeze list, in order to present the freezing measure from potentially being circumvented.
On 2 December 2022, the Commission put forward a proposal to harmonise criminal offences and penalties for the violation of EU restrictive measures. While the Russian aggression on Ukraine is ongoing, it is paramount that EU restrictive measures are fully implemented and the violation of those measures is not rewarded. The Commission proposal sets out common EU rules, which will make it easier to investigate, prosecute and punish violations of restrictive measures in all Member States alike.
The Commission created a new role of International Special Envoy for the Implementation of EU Sanctions to ensure continuous, high-level discussions with third countries to avoid the evasion and circumvention of sanctions that have been imposed on Russia since the start of its war against Ukraine. David O'Sullivan, a former Secretary-General of the Commission and senior EU diplomat, has been appointed as EU Sanctions Envoy and took up this role in January 2023.
Information for stakeholders
To ensure information is available for stakeholders, the Commission has
- published hundreds of FAQs pertaining to all industry sectors affected by sanctions, such as finance and banking, trade and customs, energy, agriculture, transportation, media public procurement, and has issued specific guidance on humanitarian issues. It has had regular dialogues with industry stakeholders and is working together with the national competent authorities which are competent to implement EU sanctions, grant authorisations and prosecute violations.
- published easily-accessible information on the packages adopted so far. The EU Sanctions Map provides a user-friendly display of all sanctions regimes currently in place, including persons subject to individual sanctions. The Consolidated Financial Sanctions List, which includes all persons, groups and entities subject, under EU sanctions, to an asset freeze and the prohibition to make funds and economic resources available is available online.
- put in place a Whistleblower Tool to report sanctions violations anonymously. EU sanctions also now require Member States to criminalise the violation of sanctions.
- established the EU-level contact point for humanitarian aid, which provides practical information to humanitarian operators on requesting humanitarian derogations under EU sanctions.
- launched/created a central contact point to help non-EU authorities and operators on the scope and implementation of EU sanctions against Russia - and especially on matters related to food security. This is also meant to ensure that the flow of agrifood products and fertilisers to their countries is not impacted.