With 543 votes in favor, 45 against, and 27 abstentions, the European Parliament approved the directive that had already been agreed upon with EU member states. Common minimum penalties will be introduced and enforcement of sanctions will be fully harmonized.
Until now, EU countries handled this individually, resulting in some member states imposing higher penalties and others lower ones. This led to 'forum shopping,' where traders and exporters operated from the EU countries with the lowest risk of detection and penalties.
EU sanctions and fines can include freezing bank accounts and company assets (including crypto assets), travel bans, arms embargoes, and restrictions on entire sectors. Although sanctions are set at the EU level, enforcement will be carried out nationally by EU countries.
The new law includes definitions for violations such as transferring money to individuals subject to sanctions or doing business with state-owned companies from countries under sanctions. Providing (financial or legal) advisory services that violate sanctions will also be punishable.
Dutch Member of the European Parliament Sophie in 't Veld, the EP rapporteur on this law, considers it an important step to improve the effectiveness of the thirteen EU sanction packages already adopted against Russia.
"Russian oligarchs still find backdoors in the EU. There remain ways to evade sanctions and make millions, at the expense of Ukrainians fighting in the trenches or lying awake from air alarms. Those backdoors will always exist, but providing them by lawyers and financial service providers will become a criminal offense throughout the EU."
Judges will soon be able to impose prison sentences of up to five years as well as heavy fines. Regarding fines, EU member states can choose whether a judge can impose the maximum penalty based on a percentage of the company’s global annual turnover or on absolute maximum amounts.