The European Commission Wednesday proposed adding evasion of sanctions to a list of crimes of EU relevance, while strengthening common rules for the seizure, confiscation and sale of assets linked to such offences.
The proposal comes amid calls by Ukraine and some sympathetic EU countries to use assets of the Russian state and sanctioned oligarchs to pay for the reconstruction of Ukraine. Whether that would succeed is another question, as some other EU capitals and Washington have expressed doubts on it’s legally feasible to reclassify sanctions evasion as a crime across the bloc.
Under Wednesday’s proposals, EU countries will have to unanimously agree on making sanction evasion a criminal offence across the EU.
At present, the rules on sanctions evasion are a patchwork. It’s a crime in 12 EU countries, either an administrative or criminal offence in 13, and an administrative offence in Slovakia and Estonia.
If EU capitals agree, the Commission would then propose a directive, whose contents were previewed in a separate communication issued Wednesday, that defines sanction evasion and proposes common penalties. A majority of EU countries and the European Parliament would need to approve the directive for it to come into effect.
It’s not clear yet whether simply failing to declare ownership to the authorities counts as sanction evasion. Justice Commissioner Didier Reynders took a broad view on that question, telling reporters Wednesday that “any kind of attempt to circumvent would be considered a criminal offence.”
Separately, the Commission is strengthening common rules for the treatment of EU crimes, including expanding the grounds for confiscation of assets without needing a conviction if the court is convinced that the assets derive from criminal activities. It also proposes to sell assets before a confiscation order is obtained, to avoid their devaluation.
These options may also apply to assets owned by oligarchs, insofar as they are also involved in a a criminal activity.
EU countries have so far frozen nearly €10 billion in assets belonging to Russian individuals and entities under EU sanctions. And some of those funds may be confiscated and sold by EU countries as part of criminal proceedings, Reynders said. He proposed transferring the proceeds of those sales “to a common fund that will help Ukrainian victims of the war,” but also conceded that this would be “small amounts.”
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