by Salomé Lemasson, Founder of SL Avocat
Introduction
Economic restrictive measures (or so-called “sanctions”) have become one of the European Union’s (EU) favourite and most commonly used tools of its foreign policy. They clearly contribute to defining and implementing a common EU foreign policy[1], where the EU is more and more able to speak as one united voice to weight on the scene of international relations, alongside powerful players like the United States of America.
As experts explain, sanctions are not relevant only because of their potential efficiency; they also send a clear foreign policy signal of disapproval, while being more moderate than a full embargo and less dangerous than a military deployment. Sanctions have been steadily implemented by the EU, with a significant increase following the annexation of Crimea and the war in Donbass in 2014.[2]
Today, EU sanctions regimes include either thematic restrictions – such as the latest EU Global Human Rights Sanctions Regime introduced in December 2020[3] – or geographic measures[4] (Russia, Belarus, Myanmar, Iran, etc.). Some are implementations of UN sanctions adopted under Chapter VII of the UN Charter[5], to maintain or restore international peace and security, others are EU autonomous sanctions.
This article critically explores the legal and practical dimensions of EU sanctions, with a focus on the EU sanctions’ regime against Russia, and calls for a critical assessment of their impact, quality and feasibility, as sanctions overall effectiveness to bring about change in the Russian government’s military and political stance vis-à-vis Ukraine can legitimately be questioned.
EU Sanctions’ typology and objectives
Though commonly referred to as “sanctions”, restrictive measures adopted by the EU are not punitive in nature. They are intended to foster a significant change in the policy or activity of the targeted person, entity or organisation by targeting non-EU recipients (be it countries, entities, organisations or individuals) deemed responsible for the harmful behaviour at stake.
As such, they do not qualify as criminal sanctions and follow a distinct regime, halfway between political considerations and judicial sanctioning.
Restrictive measures adopted by the EU through their thematic or geographical regimes may take the following form:
- arms embargo;
- travel bans;
- asset freeze and prohibition to make economic resources available;
- other sectoral, targeted economic measures such as restrictions on imports or exports, sales, purchases, investments and provisions of services such as technical assistance.
Asset freezes and travel restrictions are two of the main sanctions taken by the EU against individuals. Asset freeze restrictions cover all funds and economic resources owned or controlled by designated persons and persons associated with them. This prohibition extends to making funds and economic resources available to designated persons (including, for example, through the provision of services for free). Ownership entails the possession (alone or in aggregate) of more than 50% of an entity’s proprietary rights. Control of an entity is a trickier concept, which considers both legal and de facto control using a series of criteria assessed on a case-by-case basis, which is considered established as soon as one of them is met.[6]
A complex sanctioning process
Decisions on the adoption, renewal or lifting of sanctions regimes are taken by the Council of the European Union (“EU Council”) on the basis of proposals from the High Representative of the Union for Foreign Affairs and Security Policy and Vice President of the European Commission (“HR/VP”). The EU Council is constituted by government ministers from each EU country who regularly meet to develop the EU’s CFSP. It is thus the main decision-making body in the EU.[7] The European Commission (“EU Commission”), together with the HR/VP, give effect to these decisions into EU law through joint proposals for Council regulations that are also adopted by the EU Council.[8] These Council regulations are directly applicable in the Member States, without the need of additional transposal.[9]
Generally speaking, unanimity is required on a number of matters which EU Member States consider to be particularly sensitive, including but not limited to CFSP related decisions (save under specific circumstances whereby a qualified majority is required). Interestingly, under unanimous voting, abstention does not prevent a decision from being taken.[10]
In other words, this means that EU Council’s decisions introducing sanctions require unanimity from all EU Member States. With respect to restrictive measures aimed at interrupting or reducing economic and financial relations with third countries, the EU Council needs to implement a specific legislative act to give effect to the political decision taken, which requires a qualified majority under Article 215 of the Treaty on the Functioning of the European Union (“TFEU”). As experts put it bluntly, this is in practice a fait accompli after unanimity of the EU Council Decision, but this explains why this complex, two-step procedure require the adoption of two separate but connected legal acts for the implementation of economic sanctions regimes.[11]
With respect to the invasion of Ukraine, the EU Member States have shown unprecedented unity in their sanctions policy toward Russia.[12] Swiftness has also been welcomed by the international community in the Union’s response to the Ukrainian crisis, setting a strong precedent on how the EU may now play a key role as an international diplomatic actor speaking as one united voice.
As of today, the EU has in effect enacted eleven comprehensive sanctions packages since the Russian invasion of Ukraine launched on 24 February 2022, targeting a broad variety of sectoral restrictions, from newspaper broadcasting to the provision of certain business and consultancy services or oil and gas trading.[13]
The de facto extra-territorial reach of EU sanctions
As indicated above, the material scope of EU restrictive measures can be extremely broad. On the other hand, their geographical is, theoretically, limited to the identification of an EU nexus. Indeed, restrictive measures apply only within EU jurisdiction and the obligations imposed by EU regulations are only binding on so-called “EU Operators”.
Within the category of EU Operators, to which EU sanctions apply, fall[14]:
within the territory of the Union (including aboard any vessel or aircraft within jurisdiction of an EU Member State);
to any EU national or resident, whether located inside or outside the territory of the Union;
to any person located in the EU, even when such a person is not a national or resident of an EU Member State;
any legal person, entity or body which conducts whole or part of its business in the EU.
Especially the last point extends the geographical scope of sanctions far beyond the EU: the fact that such a person is incorporated outside of the EU does not change the fact that it is required to abide by EU sanctions at all times.
Council Decisions are directly binding on those to whom they are addressed (in general: EU Member States), while Council Regulations are binding in its entirety on any person or entity under EU jurisdiction. Enforcement of EU regulations and resulting sanctions fall within the responsibility of EU Member States’ and their national competent authorities.
Recently, the EU has included violation of sanctions to the list of “EU Crimes”, which will thus result in greater harmonized enforcement of sanctions violations throughout EU Member States. In June 2023, the EU Council settled on its general approach for an EU law introducing criminal offenses and penalties for the violation of EU sanctions. Once adopted, the new directive will set dissuasive penalties and stricter enforcement against circumventing sanctions.[15]
Inconsistencies between the various EU sanctions packages
While the uniform and swift reaction of the EU on a political level should be welcomed, it is worrisome that many of these hastily adopted restrictive measures seem to having been drafted and enacted almost too quickly. Some of them show a lack of an independent eye taking a step back to better harmonise these restrictive measures. Indeed, one may note that each sanctions package comes as a correction of the previous one yet often includes inconsistencies or misleading provisions that makes it extremely difficult for EU Operators to correctly navigate the constantly evolving sanctions landscape.
With regards to Russia’s invasion of Ukraine, EU sanctions are gathered in two regularly amended regulations: EU Regulation 269/2014[16] (which governs asset freeze measures) and EU Regulation 833/2014[17] (which gathers all sectoral business restrictions with Russia and Russian counterparts).
When analysing the various prohibitions in Regulation 833/2014, one immediately notices how the terms used in the Regulations are often vague and therefore difficult to apply.
For example, the definition of ‘direct and indirect’ provision of services under Article 5n raises questions as to how far services for non-Russian companies need to be traced in order to ensure that these services do not, eventually, also benefit a counterpart in Russia.
Similarly, Article 5aa of Regulation 833/2014 sanctions EU Operators for ‘engaging in transactions’ with certain state-owned legal persons which are, in practice, uneasy to identify because it requires knowledge of the specific ownership structure and other company details not always available.[18]
Interestingly, one notes that various prohibitions apply to business interactions with the Government of Russia or legal persons, entities or bodies established in Russia, irrespective of whether they appear on a list or not.
Limited guidance or precedent
Unfortunately, there are very little resources to draw guidance from.
As most of these cases do not go to court, there is hardly any case law on EU restrictive measures. This is all the more so when the measures are fairly new, as is the case for the Russia-related restrictive measures introduced since February 2022. One of the main consequences is that practitioners can only turn to the EU Commission’s Frequently Asked Questions (“FAQs”) for guidance, thus raising the question of the binding effect and legal value of the EU Commission’s interpretation.[19]
Besides, these FAQs do not always provide answers to every eventuality, and are obviously only developed and published days, if not weeks or months after the concerned sanction package has already come into force, leaving it up to the EU Operators to see how they interpret newly passed sanction regulations.
Little inspiration can be drawn from the underlying materials (such as Recitals or Council Decisions) as they usually do not give much interpretative guidance. In consequence, there is always a timeframe of insecurity for the persons who need to conform to the new law. In addition, this creates the risk that EU Operators first interpret the new sanction in one way and, once the new FAQs in relation to the new sanction regime has been published, need to amend their practice again in light of the new interpretative guidelines.
A highly critical lack of transparency
Another area of criticism with respect to sanctions pertains to the lack of transparency on the criteria and standard of evidence to be met to be listed as a designated person on the EU Consolidated Sanctions List.
According to Article 2 of Council Regulation (EU) No. 269/2014[20], asset freeze measures and the prohibition to make funds or economic resources apply to all funds and economic resources belonging to, owned, held or controlled by any natural or legal persons, entities or bodies, or natural or legal persons, entities or bodies associated with them, as listed in Annex I.
Article 3 then specifies the criteria on which a natural or legal person shall be included onto Annex I. These criteria are extremely broad, vaguely defined, and pertain to persons responsible for, supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organizations in Ukraine, inter alia.[21]
Support is characterized both materially or financially, and sanctions generally extend to persons benefiting from the Government of the Russian Federation or from Russian decision-makers responsible for (…) the destabilization of Ukraine. Along the same lines, Annex I also contains the names of leading businesspersons or legal persons, entities or bodies involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation.
Yet, as far as the listing of designated persons is concerned, the legitimacy and thus quality of the regulation largely depends on the procedure that is being applied in order to determine who should be on the list and who not, as well as the legal remedies that exist against the listing. If, for instance, it turns out that persons were listed based on vague information – e.g. information provided by a source the reliability of which cannot be verified – this would put the quality of these listings into question as there is a high chance that persons might end up by mistake on the lists. Similarly, if legal remedies against the listings are scarce or poorly defined, this raises serious rule of law concerns.
Of note: the EU Commission’s FAQs specify that strictly speaking, only the persons and entities who/which appear under the column ‘Name’ in Annex I (…) are directly subject to an asset freeze and a prohibition to make funds and economic resources available to them or for their benefit.[22]
However, this rather straightforward explanation that only those persons listed under the column “Name” in Annex I should be concerned by any such asset freeze measures does not hold given that such measures explicitly extend to any natural or legal persons, entities or bodies associated with them[23], some of which happen to be mentioned in the ‘Identifying information‘ and/or ‘Reasons’ columns of Annex I.[24]
Could sanctions qualify as “criminal charges” under the ECHR?
Despite that sanctions are not criminal in nature,[25] and therefore, do not result in confiscation or coercive measures such as imprisonment for designated persons, their impact is, however, often comparable to criminal sanctions in practice. From this follows that the executive is not the correct body to impose sanctions, as it leads to an actually existing lack of transparency and judicial review as to the standard of proof and the procedure in place to warrant sanctions.
Indeed, when considering the standards developed by the European Court of Human Rights’ (“ECtHR”) regarding the concept of a “criminal charge”, within the meaning of Article 6 of the European Convention of Human Rights (“ECHR”), one may indeed wonder whether sanctions could not be considered as “criminal” by the ECtHR.
“Criminal charge”, in the context of the ECHR, has an “autonomous” meaning, independent of the categorisations employed by the national legal systems of the member States.[26] This is true both for the determination of the “criminal” nature of the charge and for the moment from which such a “charge” exists.[27] The definition of “criminal charges” within the meaning of Art. 6 is thus wider than that of domestic law, and the legal qualification of an act as “criminal” under domestic law is only one of the criteria to be applied.
The ECtHR, in its well-established case law, stipulated some parameters (the so-called “Engel criteria”) to identify when the safeguards against unfair criminal measures foreseen by Article 6 are applicable:
(1) the legal qualification of the offence under domestic law;
(2) the very nature of the offence; and
(3) the degree of severity of the penalty incurred.[28]
The second and third criteria laid down in Engel and Others v. the Netherlands, 1976, are alternative and not necessarily cumulative; for Article 6 to be held to be applicable, it suffices that the offence in question should by its nature be regarded as “criminal” from the point of view of the Convention, or that the offence rendered the person liable to a sanction which, by its nature and degree of severity, belongs in general to the “criminal” sphere.[29] The fact that an offence is not punishable by imprisonment is not in itself decisive, since the relative lack of seriousness of the penalty at stake cannot divest an offence of its inherently criminal character.[30] A cumulative approach may, however, be adopted where separate analysis of each criterion does not make it possible to reach a clear conclusion as to the existence of a criminal charge. [31]
Theoretically, the case law of the ECtHR applies only to sanctions imposed by signing parties of the ECHR. Despite the planned accession of the EU to the ECHR under Art. 6(2) of the TEU, there has yet to be a decision regarding its applicability to the EU as an autonomous entity. Nonetheless, considering that its Member States will ultimately be the ones enforcing the sanctions, there are no substantial objections to the pertinence of the ECtHR case law to the EU actions.
Although the ECtHR has shown significant reluctance to classify political measures as criminal offences, considering the overtly deterrent purpose and the procedures of enforcement, and their heavy impact, it is not unthinkable that the ECtHR would indeed one day qualify a sanction as criminal under its autonomous interpretation of “criminal charges”, despite not being labelled as such.[32]
Such a conclusion would have tremendous consequences, in particular with respect to procedural safeguards to be complied with to the benefit of designated persons. In the case of Ukraine-related sanctions, which target persons who have “supported or implemented actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine”, such a vague description would unlikely satisfy the principle set by the rule nulla poena sine lege, enshrined in Art. 7 of the ECHR.
Prohibition of legal services as a threat to the rule of law?
Following the 8th sanctions package in October 2022, Article 5n of Regulation 833/2014 was amended, introducing a prohibition to provide, amongst others, legal advisory services. This prohibition has been harshly criticised by legal professionals, as it has a direct impact on the ability for EU lawyers to represent and assist Russian entities seeking advice on the applicability of EU sanctions. This is particularly worrisome as the above outlined inconsistencies and vagueness of some of the provisions make legal advice indispensable when navigating through the sanctions. Furthermore, it raises many questions, one of them being its interpretation and the issues EU lawyers may face as a result, in particular with respect to the distinction between advisory work (prohibited) and contentious matters (allowed), a distinction that can hardly be made, as any litigation will generally be preceded, and, in many cases can be avoided, by sound legal advice.
Generally speaking, it is unfortunate that the members of a profession of court officers, whose role is essential to the preservation of the rule of law and justice being properly rendered and whose mantra relies on trust, independence, integrity, probity and dignity seem to be viewed as a medium to help designated persons circumvent applicable sanctions. This unfortunately substantiates the general distrust aimed against lawyers, who are too often associated in the public mindset with the deeds of the people they are tasked with advising or defending.
This tendency can also be witnessed in other areas of laws, whereby lawyers are actively seen as potential enablers of criminal offenses (for example, tax advisors who facilitate … aggressive tax planning - i.e. in many cases do no more than informing their clients about the boundaries of the law)[33] or when considering anti money laundering legislation throughout Europe which requires transactional attorneys to report suspicions of wrongdoings committed by their clients and thus significantly impacts lawyers’ independence.[34]
A slippery slope: when sanctions exclusively rely on nationality
In principle, restrictive measures somehow pertain to a concerned persons’ alleged involvement in the international crisis concerned or misconduct at stake. This is particularly true for asset freeze measures or prohibition to make funds and economic resources available. Put simply, one needs to be involved in (although sometimes somewhat remotely) the destabilisation of the concerned country to be subject to sanctions.
The same does not hold true for sectoral restrictions, some of which are dangerously based on the sole criteria of nationality.
In particular, this is the case for sectoral restrictions applicable to the provision of trust-related services by EU Operators. This restriction was introduced under the 5th sanctions package adopted on 8 April 2022, with a view to include a prohibition on providing trust services to wealthy Russians, making it more difficult for them to store and manage their wealth in the EU.[35]
Under Article 5m, EU Operators are prohibited to register, provide a registered office, business or administrative address as well as management services to a trust or similar legal arrangement having as a trustor or beneficiary (a) Russian nationals or natural persons residing in Russia, (b) legal persons, entities or bodies established in Russia (…).
The EU Commission’s FAQs state that the prohibition only applies where the settlor or the beneficiary is a Russian person, as defined under paragraphs (a) to (e). However, such services could be provided if such Russian persons are removed from the trust. Such a prohibition does not apply to bi-nationals or EU residents (whether temporary or permanent residence). Finally, the EU Commission recalls that specific authorisation may be sought with the relevant national competent authority (“NCA”) for those trusts that include a Russian person as settlor or beneficiary, provided that the trustee does not accept from or distribute assets to a trustor or beneficiary who qualifies as a Russian person.[36]
Interestingly, despite being presented in the media as targeting “wealthy” Russians[37], no financial considerations or thresholds have been introduced, hence the measures apply to all trusts or similar legal arrangements, irrespective of the value of the assets under management.
Furthermore, the prohibition applies to any trust (or similar arrangement) whose trustor or beneficiary is – or is owned or controlled by – a Russian national or entity, regardless of whether such a Russian person is listed on the EU sanctions’ list as a designated person. In this respect, the EU approach significantly differs from that adopted by the United Kingdom, where trust related prohibitions are dependent upon the presence of a UK designated person in the trust structure, and does not solely rely on the nationality of such person.
Using nationality as a stand-alone criterion to justify sectoral restrictions is a dangerous and slippery slope that directly endangers the very existence of the rule of law. Yet, one immediately notices that several prohibitions focus solely on nationality (or the seat of incorporation) and do not refer to a potential designation as additional criteria to warrant restrictions. This applies, for instance, to the restriction against Russian individuals with no dual (EU) nationality or residence permit preventing EU financial institutions to accept deposits of more than EUR 100,000.[38]
Given Europe’s still recent darkest hours, combined with the continued emergence of populist, nationalist parties throughout the various Member States, economic sanctions should not be enacted at the detriment of the EU’s fundamental and core values embodied in the rule of law, equality and justice.
Conclusion
Sanctions have always been used as economic tools to politically influence foreign countries: they were initially applied as measures of national foreign policy in the form of trade restrictions, in the context of colonial political conflicts. During the cold war, they were used to control the export of technology to states of the East Bloc and, in relation to the former Soviet Union, as early as 1982 through the European Economic Communities. Since the Maastricht Treaty, sanctions such as arms embargos, trade restrictions, travel bans and financial asset freezes have been continuously adopted again as a tool of the EU’s foreign policy.
With respect to the invasion of Ukraine, the EU Member States have shown unprecedented unity in their sanctions policy towards Russia. Today, eleven sanctions packages have been adopted, despite the complex, two-step adoption process.[39]
As sanctions apply not only to individuals and entities based in the EU, but also to EU citizens located outside the EU and legal persons conducting business in the EU, their effects go beyond the borders of the EU.
This all stresses the need for sanctions to be consistent, transparent and in compliance with the rule of law. However, while the speedy reaction of the EU to the war in Ukraine generally must be welcomed, one cannot but observe that sanctions were passed in great haste and could need a more thorough review to cure the texts for the use of vague and poorly defined terms, inconsistencies between differing instruments, lack of transparency when it comes to designating individuals and private entities, etc. Overall, the reality of EU sanctions makes it very difficult for EU Operators to comply with them, and certainly call for appropriate legal advice when conducting business.
Yet, the recent inclusion of legal advisory services in the list of services prohibited under certain circumstances has been particularly worrisome as it increases not only uncertainty of what is allowed or not allowed, but also restricts access to legal advice, which is necessary to make sure to comply with the law. Insofar as restrictive measures are solely based on the criteria of nationality, this jeopardises the principles of non-discrimination and equality before the law and therefore goes against the EU’s own core values that the sanctions regime aims to protect.
In light of the above, it becomes virulent that the EU sanctions regime should be critically reviewed and streamlined. Moreover, the legal uncertainty on how to correctly comply with the sanctions regime and the lack of guidance from NCAs given the numerous requests they receive put EU Operators in a particular difficult situation. Additional guidance in form of specific training and additional information on the practical application and enforcement by the Member States would help them to correctly navigate through the sanctions map. To this end, an implementation report, including a compilation of national decisions and case law, would contribute to better understand and comply with the sanctions.
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[1] R. Bloj, Les sanctions, instrument privilégié de la politique étrangère européenne, Fondation Robert Schuman, Question d’Europe n°598, 31 mai 2021.
[2] R. Bloj, Les sanctions, instrument privilégié de la politique étrangère européenne, Fondation Robert Schuman, Question d’Europe n°598, 31 mai 2021.
[3] Cf. Council Regulation (EU) 2020/1998 and Council Decision (CFSP) 2020/1999 of 7 December 2020 concerning restrictive measures against serious human rights violations and abuses. In addition to the EU’s Global Human Rights Sanctions Regime, the Union has also adopted thematic restrictions concerning chemical weapons, cyber-attacks, and terrorism (source EU Sanctions Map).
[4] As of the date of this article [1/18/2023], the EU has adopted restrictive measures in relation to the situation in the following 33 countries: Afghanistan, Belarus, Bosnia and Herzegovina, Burundi, Central African Republic, China, North Korea, Democratic Republic of the Congo, Guinea, Guinea-Bissau, Haiti, Iran, Iraq, Lebanon, Libya, Mali, Moldova, Montenegro, Myanmar, Nicaragua, Russia, Serbia, Somalia, South Sudan, Sudan, Syria, Tunisia, Turkey, Ukraine, United States of America, Venezuela, Yemen and Zimbabwe (source EU Sanctions Map).
[5] United Nations, Charter of the United Nations, 24 October 1945, 1 UNTS XVI, available at: https://www.refworld.org/docid/3ae6b3930.html [accessed 6 February 2023].
[6] EU Council, Restrictive Measures (Sanctions) – Update of the EU Best Practices for the effective implementation of restrictive measures, 27 June 2022https://data.consilium.europa.eu/doc/document/ST-10572-2022-INIT/en/pdf.
[7] Cf. https://www.consilium.europa.eu/en/council-eu/. Not to be confused with the Council of Europe, a group of 46 Member States, including Turkey and other countries who are not part of the EU – until 15 March 2022 even Russia was part of that one (for details, see https://www.coe.int/en/web/portal); and not to be confused with the European Council, which is constituted by the heads of the Member States and determines the general political direction and priorities of the EU, cf. https://www.consilium.europa.eu/en/european-council/.
[8] EU Commission, Sanctions (restrictive measures), https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions_en.
[9] Article 288(1) of the Treaty on the Functioning of the European Union (TFEU).
[10] The EU Council also has to vote unanimously in relation to EU membership, citizenship (i.e., the granting of new rights to EU citizens), harmonisation of national legislation on indirect taxation and in the field of social security and social protection, EU finance, certain provisions in the field of justice and home affairs (e.g., European Public Prosecution Office, etc.) https://www.consilium.europa.eu/en/council-eu/voting-system/unanimity/.
[11] Verfassungsblog.de, Judicial scrutiny and EU Sanctions against individuals: Expanded listing criteria, limited safeguards and scrutiny, 20 December 2022.https://verfassungsblog.de/judicial-scrutiny-and-eu-sanctions-against-individuals/.
[12] S. Meister, A Paradigm Shift: EU-Russia Relations After the War in Ukraine, Carnegie Europe, 29 November 2022.
[13] 11th package of sanctions on Russia’s war of aggression against Ukraine: additional 71 individuals and 33 entities included in the EU’s sanctions list and new tools to counter circumvention and information warfare - Consilium (europa.eu)
[14] Cf. Article 13, Council Regulation (EU) No. 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine, as amended.
[15] EU sanctions: Council finalises position on law that aligns penalties for violations (europa.eu)
[16] Council Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, OJ L 78, 17.3.2014, p. 6–15.
[17] Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Ru ssia's actions destabilising the situation in Ukraine, OJ L 229, 31.7.2014, p. 1–11.
[18] Article 5aa(1) reads as follows: It shall be prohibited to directly or indirectly engage in any transaction with
a legal person, entity or body established in Russia, which is publically controlled or with over 50 % public ownership or in which Russia, its Government or Central Bank has the right to participate in profits or with which Russia, its Government or Central Bank has other substantial economic relationship, as listed in Annex XIX;
a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIX; or
a legal person, entity or body acting on behalf or at the direction of an entity referred to in point (a) or (b) of this paragraph.
[19] As soft law, the guidelines are of a not binding nature. Notwithstanding, they have a certain normative content and generate practical effects (cf. Directorate-General Internal Policies of the Union, Policy Department C.: Citizens’ Rights and Constitutional Affairs Unite, Better regulation and the improvement of EU regulatory environment, Institutional and legal implications of the use of “soft law” instruments, (Background note), March 2007, PE 378.290, p. 3. Similarly, the Update of the EU Best Practices for the effective implementation of restrictive measures (EU Council of 27 June 2022, 10572/22), which aims at reviewing and adding best practices in this field, explicitly states: The Best Practices are to be considered non exhaustive recommendations of a general nature for effective implementation of restrictive measures in accordance with applicable Union law and national legislation. They are not legally binding and should not be read as recommending any action which would be incompatible with applicable Union or national laws, including those concerning data protection (ibid. p. 3). See also EU Council, How and when the EU adopts sanctions https://www.consilium.europa.eu/en/policies/sanctions/; EU Monitor, Guideline https://www.eumonitor.eu/9353000/1/j9vvik7m1c3gyxp/vh7dou1h8az4..
[20] Council Regulation (EU) No. 269/2014 of 17 March 2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, as amended.
[21] Article 3(1) defines the list of persons and entities that may be subject to sanctions as follows:
1. Annex I shall include:
(a) natural persons responsible for, supporting or implementing actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine;
(b) legal persons, entities or bodies supporting, materially or financially, actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine;
(c) legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons, entities or bodies which have benefited from such a transfer;
(d) natural or legal persons, entities or bodies supporting, materially or financially, or benefiting from Russian decision-makers responsible for the annexation of Crimea or the destabilisation of Ukraine;
(e) natural or legal persons, entities or bodies conducting transactions with the separatist groups in the Donbas region of Ukraine;
(f) natural or legal persons, entities or bodies supporting, materially or financially, or benefitting from the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine; or
(g) leading businesspersons or legal persons, entities or bodies involved in economic sectors providing a substantial source of revenue to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine; or
(h) natural or legal persons, entities or bodies facilitating infringements of the prohibition against circumvention of the provisions of this Regulation, of Council Regulations (EU) No 692/2014 ( 1 ), (EU) No 833/2014 ( 2 ) or (EU) 2022/263 ( 3 ) or of Council Decisions 2014/145/CFSP ( 4 ), 2014/386/CFSP ( 5 ), 2014/512/CFSP ( 6 ) or (CFSP) 2022/266 ( 7 ).
and natural or legal persons, entities or bodies associated with them.
[22] Cf. FAQs on Russian sanctions, EU Commission’s response to question 2 under Section B.1 “Asset Freeze and Prohibition to Make Funds and Economic Resources Available”, as updated on 21 December 2022.
[23] Article 2, Council Regulation (EU) No. 269/2014, as amended.
[24] Cf. FAQs on Russian sanctions, EU Commission’s response to question 2 under Section B.1 “Asset Freeze and Prohibition to Make Funds and Economic Resources Available”, as updated on 21 December 2022
[25] Note that a new Proposal for a Directive suggests to criminalise certain violations of sanctions, for details, see infra section 4.3.
[26] Blokhin v. Russia [GC], 2016, § 179; Adolf v. Austria, 1982, § 30.
[27] ECtHR, Guide on Article 6 of the European Convention on Human Rights (updated 31 August 2022), p. 9.
[28] See ECtHR, Engel and Others v. the Netherlands, judgment of 8 June 1976, application no. 5100/71 [1976] ECtHR 3 §§ 80-85; see also Oztürk v. Germany, §§ 46-56; Lutz v. Germany, §§ 50-57; Benham v. the United Kingdom, §§ 54-56; Ezeh and Connors v. the United Kingdom, §§ 69-129; Jussila v. Finland, §§. 29-39; Nicoleta Gheorghe v. Romania, §§ 25-27; Müller-Hartburg v. Austria, §§ 37-49; Kasparov and Others v. Russia, §§ 37-45; Ramos Nunes de Carvalho e Sá v. Portugal, §§ 122-123; and Navalnyy v. Russia, §§ 77-80.
[29] Lutz v. Germany, 1987, § 55; Öztürk v. Germany, 1984, § 54.
[30] Ibid., § 53; Nicoleta Gheorghe v. Romania, 2012, § 26; see also ECtHR, Guide on Art. 6 of the Convention, p. 11.
[31] Bendenoun v. France, 1994, § 47; see also ECtHR, Guide on Art. 6 of the Convention, p. 11.
[32] See also ECtHR, Al-Dulimi and Montana Management Inc. v. Switzerland – Judgment of 26.11.2013, application no. 5809/08, where the Court found that Switzerland had violated Art. 6(1) of the ECHR (access to justice) by implementing a UNSC sanction in relation to Iraq.
[33] See, e.g., the Proposal of 6 July 2022 for a Council Directive to tackle the role of enablers that facilitate tax evasion and aggressive tax planning’ in the European Union (Securing the Activity Framework of Enablers - SAFE), Document Ares(2022)4939801.
[34] See, e.g., the criticism of the German Bar Association on the newest money laundering package of the commission, press release 29/21, online available here: PM 29/21: DAV-Kritik am Geldwäschepaket der EU-Kommission - Deutscher Anwaltverein (accessed 31.01.2023).
[35] EU Commission press release, Questions and answers on the fifth package of restrictive measures against Russia, 8 April 2022, accessible at the following link: https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_2333.
[36] Cf. FAQs on Russian sanctions, EU Commission’s response to question 4 under Section G.9 “Trust Services”, as updated on 21 December 2022.
[37] EU Commission press release, Questions and answers on the fifth package of restrictive measures against Russia, 8 April 2022, accessible at the following link: https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_2333.
[38] Article 5b, Council Regulation (EU) No. 833/2014, of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine, as amended.
[39]Tidey, Von der Leyen promises 10th packae of Russian sanctions in visit to Kyv, euronews, 02.02.2023, Von der Leyen promises 10th package of Russian sanctions in visit to Kyv | Euronews (accessed 07.02.2023).
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