EU Changes Requirements for Sanctions Enforcement

Jul 8, 2022 Benn-Ibler Rechtsanwälte

In connection with the Russia sanctions, the European Union has recently imposed stricter requirements on member states regarding the enforcement of sanctions and the punishment of sanctions violations.

Art 8 (1) of Regulation 833/2014 as amended and Art 15 (1) of Regulation 269/2014 as amended formerly read: “Member states shall lay down the rules on sanctions applicable to infringements of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The penalties provided for shall be effective, proportionate, and dissuasive.” These two provisions have recently been supplemented. On the one hand, the regulation additionally calls for “imposition of criminal penalties”, but also for “appropriate measures to recover the proceeds of such violations” of the Russia sanctions.

Domestic enforcement of EU sanctions in Austria is governed by the Sanctions Act 2010 (SanktG) and the Foreign Trade and Payments Act 2011 (AußWG 2011).

General transactions and legal transactions that violate sanctions are punishable by law if they involve assets worth more than EUR 100,000. Services of the same worth are punishable by up to two years' imprisonment (Section 11 (1) and (3) Sanctions Act 2010; § 11 Abs 1 und 3 SanktG 2010). Only administrative violations represent sanction violations with regard to smaller asset components. The penalty here is up to EUR 50,000 (Sections 12 ff SanktG; §§ 12 ff SanktG).

Section 20 of the Criminal Code (within the scope of application of Section 11 of the Sanctions Act) stipulates that those assets (their use or replacement value) obtained for or through the commission of a criminal act are to be declared forfeited. In this case, the legal rights (usually ownership) to such assets are transferred to the state.

The Foreign Trade and Payments Act 2011 regulates additional criminal offenses in relation to goods. For example, “technical assistance” (services relating to goods, etc.) is punishable by the courts, as this goes against sanctions under Union law (Section 79(1)(1) and (2) of the Foreign Trade and Payments Act 2011; § 79 Abs 1 Z 1 and 2 AußWG 2011) and results in the applicability of criminal forfeiture measures (Section 20 of the Criminal Code). In addition, Section 79 of the Foreign Trade and Payments Act also sanctions “other transactions”. This catch-all provision covers all other sanctioned transactions relating to goods not specifically mentioned in the Foreign Trade and Payments Act 2011.

Regulation EU No. 833/2014