Legal provisions of COM(2022)684 - Definition of criminal offences and penalties for the violation of Union restrictive measures

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dossier COM(2022)684 - Definition of criminal offences and penalties for the violation of Union restrictive measures.
document COM(2022)684 EN
date April 24, 2024

Contents

Article 1 - Subject matter

This Directive establishes minimum rules concerning the definition of criminal offences and penalties with regard to the violation of Union restrictive measures.

Article 2 - Scope and definitions

(1) This Directive applies to violations of Union restrictive measures. Those Union restrictive measures cover: 

(a)measures concerning the freezing of funds and economic resources; 

(b)prohibitions on making funds and economic resources available; 

(c)prohibitions on entry into, or transit through, the territory of a Member State

(d)sectoral economic and financial measures; and

(e)arms embargoes.

(2) For the purposes of this Directive, the following definitions apply:

(a)‘Union restrictive measures’ are restrictive measures adopted by the Union on the basis of Article 29 TEU or Article 215 TFEU;

(b)‘designated person, entity or body’, means those natural or legal persons, entities or bodies subject to Union restrictive measures consisting in the freezing of funds and economic resources and the prohibition to make funds and economic resources available;

(c)‘funds’ means:

(i) cash, cheques, claims on money, drafts, money orders and other payment instruments;

(ii) deposits with financial institutions or other entities, balances on accounts, debts and debt obligations;

(iii) publicly- and privately-traded securities and debt instruments, including stocks and shares, certificates representing securities, bonds, notes, warrants, debentures and derivatives contracts;

(iv) interest, dividends or other income on or value accruing from or generated by assets;

(v) credit, right of set-off, guarantees, performance bonds or other financial commitments;

(vi) letters of credit, bills of lading, bills of sale;

(vii) documents showing evidence of an interest in funds or financial resources;

(viii) crypto assets;

(d)‘economic resources’ means assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services;

(e)‘freezing of funds’ means preventing any move, transfer, alteration, use of, access to, or dealing with funds in any way that would result in any change in their volume, amount, location, ownership, possession, character, destination or any other change that would enable the funds to be used, including portfolio management;

(f)‘freezing of economic resources’ means preventing the use of economic resources to obtain funds, goods or services in any way, including, but not limited to, by selling, hiring or mortgaging them.

Article 3 - Violation of Union restrictive measures

(1) Member States shall take the necessary measures to ensure that the violation of a Union restrictive measure constitutes a criminal offence when committed intentionally and provided it falls in one of the categories defined in paragraph 2.

(2) For the purposes of this Directive, the following shall be regarded as violation of a Union restrictive measure:

(a)making funds or economic resources available to, or for the benefit of, a designated person, entity or body in violation of a prohibition by a Union restrictive measure;

(b)failing to freeze without undue delay funds or economic resources belonging to or owned, held or controlled by a designated person, entity or body in violation of an obligation to do so imposed by a Union restrictive measure;

(c)enabling the entry of designated natural persons into the territory of a Member State or their transit through the territory of a Member State in violation of a prohibition by a Union restrictive measure;

(d)entering into transactions with a third State, bodies of a third State, entities and bodies owned or controlled by a third State or bodies of a third State, which are prohibited or restricted by Union restrictive measures; 

(e)trading in goods or services whose import, export, sale, purchase, transfer, transit or transport is prohibited or restricted by Union restrictive measures, as well as providing brokering services or other services relating to those goods and services;

(f)providing financial activities which are prohibited or restricted by Union restrictive measures, such as financing and financial assistance, providing investment and investment services, issuing transferrable securities and money market instruments, accepting deposits, providing specialised financial messaging services, dealing in banknotes, provide credit rating services, providing crypto assets and wallets;

(g)providing other services which are prohibited or restricted by Union restrictive measures, such as legal advisory services, trust services, public relations services, accounting, auditing, bookkeeping and tax consulting services, business and management consulting, IT consulting, public relations services, broadcasting, architectural and engineering services;

(h)circumventing a Union restrictive measure by:

(i) concealing funds or economic resources owned, held, or controlled by a designated person, entity or body, which should be frozen in accordance with a Union restrictive measure, by the transfer of those funds, or economic resources to a third party;

(ii) concealing the fact that a person, entity or body subject to restrictive measures is the ultimate owner or beneficiary of funds or economic resources, through the provision of false or incomplete information;

(iii) failing by a designated person, entity or body to comply with an obligation under Union restrictive measures to report funds or economic resources within the jurisdiction of a Member State, belonging to, owned, held, or controlled by them;

(iv) failing to comply with an obligation under Union restrictive measures to provide without undue delay information on funds or economic resources frozen or information held about funds and economic resources within the territory of the Member States, belonging to, owned, held or controlled by designated persons, entities or bodies and which have not been frozen, to the competent administrative authorities;

(v) failing to cooperate with the competent administrative authorities in any verification of information under points (iii) and (iv), upon their reasoned request;

(i)breaching or failing to fulfil conditions under authorizations granted by competent authorities to conduct activities, which in the absence of such an authorization are prohibited or restricted under a Union restrictive measure.

(3) The conduct referred to in paragraph 2, points (a) to (g) shall constitute a criminal offence also if committed with serious negligence.

(4) Nothing in paragraph 2 shall be understood as imposing obligations on natural persons contrary to the right not to incriminate oneself and to remain silent as enshrined in the Charter of Fundamental Rights of the European Union and Directive (EU) 2016/343.

(5) Nothing in paragraph 2 shall be understood as imposing an obligation on legal professionals to report information which is obtained in strict connection with judicial, administrative or arbitral proceedings, whether before, during or after judicial proceedings, or in the course of ascertaining the legal position of a client. Legal advice in those circumstances shall be protected by professional secrecy, except where the legal professional is taking part in the violation of Union restrictive measures, the legal advice is provided for the purposes of violating Union restrictive measures, or the legal professional knows that the client is seeking legal advice for the purposes of violating Union restrictive measures.

(6) Paragraphs 1, 2 and 3 shall not apply to: 

- the provision of goods or services of daily use for the personal use of designated natural persons, such as food and healthcare products and services, or of petty cash, where it is clearly limited to fulfilling the basic human needs of such persons and their dependent family members,

- to the failure to report such activities;

- to humanitarian aid provided for persons in need.

Article 4 - Inciting, aiding and abetting, and attempt

(1) Member States shall take the necessary measures to ensure that inciting, aiding and abetting the offences referred to in Article 3 is punishable as a criminal offence.

(2) Member States shall take the necessary measures to ensure that the attempt to commit any of the offences referred to in Article 3 (2), points (a) to (g), (h (i), (ii) and point (i), is punishable as a criminal offence.

Article 5 - Criminal penalties for natural persons

(1) Member States shall ensure that the criminal offences referred to in Articles 3 and 4 are punishable by effective, proportionate and dissuasive criminal penalties.

(2) Member States shall take the necessary measures to ensure that the criminal offences referred to in Article 3 are punishable by a maximum penalty which provides for imprisonment.

(3) Member States shall take the necessary measures to ensure that the criminal offences referred to in Article 3(2), points (h)(iii), (iv) and (v), are punishable by a maximum penalty of at least one year of imprisonment when they involve funds or economic resources of a value of at least EUR 100 000. Member States shall ensure that the threshold of EUR 100 000 or more may also be met through a series of linked offences referred to in Article 3(2), points (h)(iii), (iv) and (v), when committed by the same offender.

(4) Member States shall take the necessary measures to ensure that the criminal offences referred to in Article 3(2), points (a) to (g), (h)(i) and (ii), and point (i), are punishable by a maximum penalty of at least five years of imprisonment when they involve funds or economic resources of a value of at least EUR 100 000. Member States shall ensure that the threshold of EUR 100 000 or more may also be met through a series of linked offences referred to in Article 3(2), points (a) to (g), (h)(i) and (ii), and point (i), by the same offender.

(5) Member States shall take the necessary measures to ensure that natural persons who have committed the offences referred to in Articles 3 and 4 may be subject to additional penalties. Those additional penalties shall include fines.

Article 6 - Liability of legal persons

(1) Member States shall take the necessary measures to ensure that legal persons can be held liable for offences referred to in Articles 3 and 4 committed for their benefit by any person, acting either individually or as part of an organ of the legal person, and having a leading position within the legal person, based on:

(a)a power of representation of the legal person;

(b)an authority to take decisions on behalf of the legal person;

(c)an authority to exercise control within the legal person.

(2) Member States shall also take the necessary measures to ensure that legal persons can be held liable where the lack of supervision or control by a person referred to in paragraph 1 of this Article has made possible the commission, by a person under its authority, of any of the criminal offences referred to in Article 3 and 4 for the benefit of that legal person.

(3) Liability of legal persons under paragraphs 1 and 2 of this Article shall not exclude the possibility of criminal proceedings against natural persons who are perpetrators, inciters or accessories in the offences referred to in Articles 3 and 4.

Article 7 - Penalties for legal persons

(1) Member States shall take the necessary measures to ensure that a legal person held liable pursuant to Article 7 is subject to effective, proportionate and dissuasive penalties, which shall include criminal or non-criminal fines, exclusion from entitlement to public benefits or aid, exclusion from access to public funding, including tender procedures, grants and concessions and may include other penalties, such as:

(a)disqualification from the practice of business activities;

(b)withdrawal of permits and authorisations to pursue activities which have resulted in committing the offence;

(c)placing under judicial supervision;

(d)judicial winding-up;

(e)closure of establishments, which have been used for committing the criminal offence.

(2) Member States shall take the necessary measures to ensure that for legal persons held liable pursuant to Article 7 the criminal offences referred to in Article 3(2), points (h) (iii) to (v), are punishable by fines, the maximum limit of which should be not less than 1 percent of the total worldwide turnover of the legal person in the business year preceding the fining decision.

(3) Member States shall take the necessary measures to ensure that for legal persons held liable pursuant to Article 7 the criminal offences referred to in Article 3(2), points (a) to (f), (h)(i) and (ii), and point (i), are punishable by fines, the maximum limit of which should be not less than 5 percent of the total worldwide turnover of the legal person in the business year preceding the fining decision.

Article 8 - Aggravating circumstances

In so far as the following circumstances do not already form part of the constituent elements of the criminal offences referred to in Articles 3 and 4, Member States shall take the necessary measures to ensure that one or several of the following circumstances may be regarded as aggravating circumstances:

(a)the offence was committed in the framework of a criminal organisation within the meaning of Council Framework Decision 2008/841/JHA 57 ;

(b)the offence was committed by a professional service provider in violation of his professional obligations;

(c)the offence was committed by a public official when performing his or her duties;

(d)the offence was committed by another person when performing a public function.

Article 9 - Mitigating circumstance

Provided this is not already an obligation under Union restrictive measures, Member States shall take the necessary measures to ensure that, in relation to the offences referred to in Articles 3 and 4, the following may be regarded as a mitigating circumstance:

(a)the offender provides the competent authorities with information they would not otherwise have been able to obtain, helping them to identify or bring to justice the other offenders; 

(b)the offender provides the competent authorities with information they would not otherwise have been able to obtain, helping them to find evidence.

Article 10 - Freezing and confiscation

Member States shall take the necessary measures to ensure that funds or economic resources subject to Union restrictive measures in respect of which the designated person, entity or body commits or participates in an offence referred to in Article 3(2), points (h)(i) or (ii), are considered as ‘proceeds’ of crime for the purposes of Directive (EU) […/…] [Directive on asset recovery and confiscation].

Article 11 - Jurisdiction rules

(1) Each Member State shall take the necessary measures to establish its jurisdiction over the criminal offences referred to in Articles 3 and 4 where:

(a)the criminal offence was committed in whole or in part within its territory, including its airspace;

(b)the criminal offence was committed on board of any aircraft or any vessel under the jurisdiction of a Member State;

(c)the offender is one of its nationals or habitual residents;

(d)the offender is one of its officials who acts in his or her official duty;

(e)the offence is committed for the benefit of a legal person which is established on its territory;

(f)the offence is committed for the benefit of a legal person in respect of any business done in whole or in part on its territory.

(2) Where an offence referred to in Articles 3 and 4 falls within the jurisdiction of more than one Member State, these Member States shall cooperate to determine which Member State is to conduct criminal proceedings. The matter shall, where appropriate, be referred to Eurojust in accordance with Article 12 of Council Framework Decision 2009/948/JHA 58 .

(3) In cases referred to in paragraph 1, point (c), Member States shall take the necessary measures to ensure that the exercise of their jurisdiction is not subject to the condition that a prosecution can be initiated only following a report made by the victim in the place where the criminal offence was committed, or a denunciation from the State of the place where the criminal offence was committed.

Article 12 - Limitation periods

(1) Member States shall take the necessary measures to provide for a limitation period that enables the investigation, prosecution, trial and judicial decision of criminal offences referred to in Articles 3 and 4 for a sufficient period of time after the commission of those criminal offences, so that those criminal offences can be tackled effectively.

(2) Member States shall take the necessary measures to enable the investigation, prosecution, trial and judicial decision of criminal offences referred to in Articles 3 and 4 which are punishable by a maximum penalty of at least five years of imprisonment, for a period of at least five years from the time when the offence was committed.

(3) By way of derogation from paragraph 2, Member States may establish a limitation period that is shorter than five years, but not shorter than three years, provided that the period may be interrupted or suspended in the event of specified acts.

(4) Member States shall take the necessary measures to enable the enforcement of:

(a)a penalty of more than one year of imprisonment; or alternatively

(b)a penalty of imprisonment in the case of a criminal offence which is punishable by a maximum penalty of at least four years of imprisonment,

imposed following a final conviction for a criminal offence referred to in Articles 3 and 4 for at least five years from the date of the final conviction. That period may include extensions of the limitation period arising from interruption or suspension.

Article 13 - Coordination and cooperation between competent authorities within a Member State

Member States shall take the necessary measures to establish appropriate mechanisms for coordination and cooperation at strategic and operational levels among all their competent administrative, law enforcement and judicial authorities.

Such mechanisms shall be aimed at least at:

(a)ensuring common priorities and understanding of the relationship between criminal and administrative enforcement;

(b)exchange of information for strategic and operational purposes;

(c)consultation in individual investigations;

(d)the exchange of best practices;

(e)assistance to networks of practitioners working on matters relevant to investigating and prosecuting offences related to the violation of Union restrictive measures.

Article 14 - Reporting of offences and protection of persons who report offences related to the violation of Union restrictive measures or assist the investigation

Member States shall take the necessary measures to ensure that the protection granted under Directive (EU) 2019/1937 59 , is applicable to persons reporting criminal offences referred to in Articles 3 and 4 of this Directive.

Article 15 - Investigative tools

Member States shall take the necessary measures to ensure that effective investigative tools, such as those which are used in investigating organised crime or other serious crime cases, are also available for investigating or prosecuting offences referred to in Articles 3 and 4.

Article 16 - Cooperation between Member States’ authorities, the Commission, Europol, Eurojust and the European Public Prosecutor's Office

(1) Without prejudice to the rules on cross-border cooperation and mutual legal assistance in criminal matters, Member States’ authorities, Europol, Eurojust, the European Public Prosecutor's Office, and the Commission shall, within their respective competences, cooperate with each other in the fight against the criminal offences referred to in Articles 3 and 4. To that end, the Commission, and where appropriate, Europol and Eurojust, shall provide technical and operational assistance in order to facilitate the coordination of investigations and prosecutions by the competent authorities.

(2) Member States’ competent authorities shall also regularly share information on practical issues, in particular, patterns of circumvention, e.g. structures to conceal the beneficial ownership and control of assets, with the Commission and other competent authorities.

   Article 17

Amendments to Directive (EU) 2018/ 1673

In Article 2(1) of Directive (EU) 2018/1673, the following point is added:

‘(w) violation of Union restrictive measures’.

Article 18 - Transposition

(1) Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with this Directive by [OP- please insert the data- within six months after entry into force of the Directive]. They shall immediately inform the Commission thereof. Member States shall communicate to the Commission the text of the main measures of national law which they adopt in the field covered by the Directive.

(2) When Member States adopt those measures, they shall contain a reference to this Directive or shall be accompanied by such reference on the occasion of their official publication. The method of making such a reference shall be laid down by Member States.

Article 19 - Evaluation and reporting

(1) By [OP- please insert the date- two years after the transposition period is over] the Commission shall submit a report to the European Parliament and the Council, assessing the extent to which the Member States have taken the necessary measures in order to comply with this Directive. Member States shall provide the Commission with the necessary information for the preparation of that report.

(2) Without prejudice to reporting obligations laid down in other Union legal acts, Member States shall, on an annual basis, submit the following statistics on the criminal offences referred to in Articles 3 and 4 to the Commission:

(a)the number of criminal proceedings initiated, dismissed, resulting in an acquittal, resulting in a conviction and ongoing;

(b)the types and levels of penalties imposed for violation of Union restrictive measures.

(3) Member States shall submit the statistical data referred to in paragraph 2 to the Commission using the dedicated reporting tools set up by the Commission for reporting in the field of restrictive measures.

(4) By [OP-please insert the data-five years after the transposition period is over], the Commission shall carry out an evaluation of the impact of this Directive and submit a report to the European Parliament and to the Council. Member States shall provide the Commission with necessary information for the preparation of that report.

Article 20

This Directive shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

Article 21

This Directive is addressed to the Member States in accordance with the Treaties.