At the end of 2023, the European Union published its 12th package of sanctions in response to Russia’s invasion of Ukraine – and as at publishing time, a 13th is thought to be imminent. But how effective are such sanctions? And how much latitude do Member States have – and use – in their implementation? Julien Nava, Arthur Etronnier, and Raphael Barazza explore the terrain.
The recent adoption of the 12th set of restrictive measures1 against Russia2 relaunches the debate over the extent to which sanctions can influence the outcome of a conflict that has recently marked its second, grim, anniversary. It also draws renewed attention to sanctions implementation by the 27 Member States of the EU, and the role played by the respective competent national authorities.
The Member States play a
role at two levels:
On the one hand, through their competent national authorities, they grant exemptions to economic operators wishing to export or import goods that are normally prohibited; on the other, they retain significant discretion as regards the penalties they can impose to punish sanctions breaches.
Given that the request for exemption is made to the authority of the State in which the property is located, nothing would then prevent an operator from carrying out an intra-community transfer to a [more lenient] Member State.
Given that the request for exemption is made to the authority of the State in which the property is located, nothing would then prevent an operator from carrying out an intra-community transfer to a [more lenient] Member State.
These two roles illustrate the autonomy that Member States enjoy under the Common Foreign and Security Policy (‘CFSP’) to implement restrictive measures they regard as appropriate.
1. Autonomy in granting exemptions from restrictive measures
A topical example – that of the export of goods suitable for use in the space sector – shows the effect of that discretion more fully:
As part of the regime adopted against Russia provided for by Regulation (EU) 833/2014,3 this restriction is contained within article 3 (c) § 1 which provides: ‘It shall be prohibited to sell, supply, transfer or export, directly or indirectly, goods and technology suited for use in aviation or the space industry.’ At the same time, paragraph 6 (a), article 3 (c) establishes a certain number of exemptions4 for different reasons, but the ways they are formulated reveal the broad discretion offered to the competent national authorities.
These exemptions are worded as follows: ‘By way of derogation from paragraphs 1 and 4, the competent authorities may authorise, under such conditions as they deem appropriate [emphasis added], the sale, supply, transfer or export of the goods listed […]’.
The fact that national authorities can grant such derogations can result in one Member State authority granting a licence to export a product that would be refused by another Member State authority – since each regards the scope of the exemption differently. In this context, given that requests for exemption are made to the authority of the State in which the property is located, nothing would then prevent an operator – through freedom of movement – from carrying out an intra-community transfer to a Member State where the competent authority has evidenced a more flexible assessment of the envisaged derogation. The operator could then carry out the desired export from the latter Member State without the risk of falling under anti-circumvention measures;5 instead their activity would be more akin to the concept of forum shopping, which does not seem to be prohibited under the restrictive measures.
Finally, note that this unequal application of restrictive measures is not something which can be addressed by resorting to litigation in the European Court of Justice – because the court is not competent to decide CFSPrelated matters.6
Measure for measure?
As noted, the discretion afforded to Member States as regards the imposition of penalties for breaches also results in significant divergences in approach.
2. Autonomy in imposing sanctions for violation of restrictive measures
Article 8 of Regulation (EU) 833/2014 provides that:
‘Member States shall lay down the rules on penalties, including as appropriate criminal penalties, applicable to infringements [emphasis added] of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for must be effective, proportionate and dissuasive. Member States shall also provide for appropriate measures of confiscation of the proceeds of such infringements.’
This provision (which is present in all EU sanctions regimes] demonstrates the difficulty of implementing restrictive measures. Indeed, real divergences have been noted in national legislation in this area.7 For example, the Estonian law on violation of restrictive measures provides for a fine of €1,200 against a natural person or €400,000 for a legal entity as well as imprisonment for up to five years.8
The same violation is punishable in France, under Article 459 of the Customs Code, with a fine equal to at least the amount, and at most equal to double the amount, to which the offence or attempted offence relates for individuals, or €1,000,000 for legal entities.9 The Code also allows for up to five years’ imprisonment and for confiscation of property, including of the corpus delicti, of the means of transport used in the execution of the offence, and of the property and assets which are direct or indirect products of its commission.
Clearly, such divergences, in both cases, might be seen to give rise to the temptation to relocate to jurisdictions that are seen as more ‘complacent’, in both their interpretation of sanctions legislation and its enforcement. These divergences also clearly reveal the underlying problems of the CFSP which, as an intergovernmental policy – falling under neither exclusive nor shared competence – attempts to reconcile the sovereignty of Member States and the interests of the Union.10
LINKS AND NOTES
- Term preferred to ‘international sanctions’ because it is the term enshrined in Title IV of Part Five of the TFEU relating to the Union’s external action.
- Council Regulation (EU) 2023/2875 of 18 December 2023 containing 147 new freezing measures.
- OJ L 229, of 31.07.2014 (consolidated version)
- For example, Article 3 (c) provides for exemptions for substances necessary to produce titanium goods when doing so is necessary to avoid collisions between satellites, or for humanitarian, medical or pharmaceutical reasons…
- See Article 12 of Regulation 833/2014: ‘It shall be prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation’
- Cf. Article 24 of the Treaty on European Union § 1 second part: ‘The Court of Justice of the European Union shall not have jurisdiction with respect to these provisions, with the exception of its jurisdiction to monitor compliance with Article 40 of this Treaty and to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the Treaty on the Functioning of the European Union.
- Network for investigation and prosecution of genocide, crimes against humanity and war crimes, ‘Prosecution of sanctions (restrictive measures) violations in national jurisdictions: a comparative analysis’, December 2021
- § 35 of the International Sanctions Act, available at: www.riigiteataja.ee/en/eli/ee/Riigikogu/act/528072023008/consolide.
- Cf. Article 131-38 of the Penal Code, to which Article 459 of the Customs Code refers.
- AUVRET-FINCK J., Common Foreign and Security Policy (CFSP). – History. General provisions. – Insertion into external relations, JurisClasseur Europe Treaty – Fasc. 2600, November 18, 2020.
