The European Union's executive arm said penalties for violating the sanctions it imposes on individuals and entities, known as restrictive measures, are not the same across the bloc. Ignoring trade embargoes or asset freezing orders are punished differently in some states, for example.
The commission's new proposals will address this patchwork approach, which risks undermining sanctions imposed on Russia. It added that new legislation to set tighter cooperation and tougher bloc-wide enforcement was necessary to ensure that sanctioned assets were more efficiently traced, frozen and then recovered.
"The implementation of EU restrictive measures following the Russian attack on Ukraine shows the complexity of identifying assets owned by oligarchs, who hide them across different jurisdictions through complex legal and financial structures," the commission said.
It added that various punishments for violating sanctions weakened the EU's "ability to speak with one voice."
The new proposals come as the EU said it has more than 40 regimes of restrictive measures in place. These include a whole suite of sanctions imposed on Moscow and Russian oligarchs after its invasion of Ukraine in February.
The commission called for violations to be included in the EU's official unionwide crime list to ensure that they are effective. These are "serious" offenses usually with a cross-border element such as terrorism, human trafficking or money laundering, it said.
Adding sanctions violations to the crime list would create a unified approach to breaches and strengthen its action against Vladimir Putin's regime, the commission said.
Věra Jourová, vice-president for values and transparency at the commission, said those not adhering to sanctions must be punished, particularly to help the bloc's efforts to thwart the cash flow bankrolling Putin's war.
"The violation of EU sanctions is a serious crime and must come with serious consequences. We need EU-wide rules to establish that," Jourová said.
The commission added that criminalizing violations across the bloc was necessary to match the increasingly sophisticated methods used by criminals to evade them.
It pointed out that lawyers and officials use complex legal structures to hide specific assets, and that the opaque and often disparate approaches across jurisdictions meant criminals and states could exploit the patchwork legislative system.
The commission also wants to sharpen existing rules on asset recovery and confiscation orders to help to track down property of targeted Russian oligarchs.
The executive body proposed extending current powers to more rapidly trace and identify assets under sanctions, including faster freezing powers when the property is at risk of disappearing.
It added that it would expand asset confiscation powers for a wider set of crimes, including violating restrictive measures if approved, as well as establishing asset recovery offices in all member states.
Oligarchs violating sanctions by moving their yachts outside the EU or changing ownership structures strengthened the argument for stronger and more coordinated recovery powers, the commission said.
The commission added that expanding its powers will also boost the bloc-wide fight against organized crime. Criminal groups make over €139 billion ($148 billion) in revenue every year, yet only 2% of criminal assets are frozen by European security forces and a mere 1% are confiscated, it said.
Ylva Johansson, home affairs commissioner, said the new tracing and freezing powers would stop rogue actors and states profiting from unlawful actions, while giving officials more time to act.
"The tracing allows assets to be found, and the urgent freezing gives time for courts to act ... those at the top of criminal gangs will no longer be insulated from prosecution," Johansson said.
The commission has urged member states to agree on its initiative to expand the list of EU crimes and sharpen asset recovery rules. After that, the executive said it will present a full legislative proposal to be voted on by lawmakers.
--Editing by Joe Millis.
For a reprint of this article, please contact reprints@law360.com.
