EU continues to beef up its global sanctions policy

EU continues to beef up its global sanctions policy

One of the big surprises since Russia’s invasion of Ukraine has been the depth and breadth of the EU’s response. (Reuters)
One of the big surprises since Russia’s invasion of Ukraine has been the depth and breadth of the EU’s response. (Reuters)
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One of the big surprises since Russia’s invasion of Ukraine has been the depth and breadth of the EU’s response, including 11 rounds of sanctions so far. However, the EU’s sanctions policy now extends far beyond Moscow to include dozens of countries, as Brussels seeks to become a more powerful player on the world stage.
The countries currently under EU restrictive measures include not only the usual suspects such as the Taliban regime in Afghanistan, Belarus, Iran, North Korea, Russia, Syria and Venezuela, but also a much wider collection of states in the Asia Pacific (including China and Myanmar), Africa and the Middle East (including Burundi, the Central African Republic, the Democratic Republic of Congo, Guinea, Guinea-Bissau, Iraq, Lebanon, Libya, Mali, Somalia, South Sudan, Sudan, Syria, Tunisia, Yemen and Zimbabwe), and the Americas (including Haiti, Nicaragua and, perhaps most surprising, the US, a measure that relates to the extra-territorial application of American legislation). The list even includes some potential EU accession states, such as Moldova, Montenegro, Serbia and Turkiye.
While some of these sanctions have been in place for decades, the regime is not static. In fact, it is highly dynamic. The current list of sanctioned individuals alone currently runs to about 500 pages, with the list of sanctioned members of Al-Qaeda the longest for any single organization.
One example of the changing nature of the EU sanctions regime is illustrated by the fact that Brussels is starting to lay the groundwork to potentially impose the first restrictive measures on members of the junta that seized power in the key African state of Niger last month. The new military leaders have so far rejected international diplomatic efforts at mediation, and neighboring countries backing the armed takeover have called on the UN to prevent a military intervention threatened by other West African states.
Building on the growing geographical spread of its sanctions, a further sign of the EU’s future intent is that the European Council recently agreed on a proposal for a new EU law to toughen up the sanctions regime by defining criminal offenses and penalties for those who violate it.
Actions that will be labeled as criminal include helping persons subject to restrictive measures to bypass an EU travel ban, trading in sanctioned goods, and involvement in transactions with states or entities that are subject to EU restrictive measures.

Under these proposals, violating or circumventing sanctions would be punishable criminal offenses punishable by prison sentences of up to five years and fines of up to €10 million ($11 million). Companies that violate or circumvent sanctions would also be excluded from public tenders.
Sanctions are therefore a growing tool in the EU’s Common Foreign and Security Policy, through which it can intervene, where necessary, to prevent conflict or respond to current or emerging crises, such as the one in Niger at present. While many of these measures are adopted autonomously by the EU, some are mandated by the UN Security Council.

The growing scope and force of the EU sanctions regime means that Europe is also increasingly being seen as a top-tier sanctions jurisdiction. 

Andrew Hammond

The goal is to bring about change in harmful policies or activities through four focal points: Promoting international peace and security, preventing conflicts, supporting democracy plus the rule of law and human rights, and defending the principles of international law.
Sanctions can target not only governments and individuals but also companies and organizations, such as Al-Qaeda, in four main ways: Weapons embargoes, travel bans, asset freezes, and other economic measures such as restrictions on imports and exports.
While the 27 members of the EU are generally in agreement on sanctions policy, fissures do open from time to time. For example, Hungary used its veto power to dilute some recent restrictive measures by securing opt-outs for itself when it comes to the embargo on Russian oil.
Despite such occasional internal squabbles, one reason why EU sanctions have such international clout is that they are sometimes replicated by non-EU nations across Europe. For example, Switzerland this month adopted the EU’s 11th package of sanctions against Moscow. This is one reason why Russia’s ambassador to Switzerland, Sergei Garmonin, announced that Moscow would not accept any future Swiss-hosted peace summit on the future of Ukraine, as proposed by Ukrainian President Volodymyr Zelensky, on the grounds that Switzerland had lost its reputation for neutrality.
EU sanctions are also closely aligned with those of the UK, which now has its own independent, post-Brexit regime defined in legislation such as the 2018 Sanctions and Anti-Money Laundering Act. The current UK regime is similar, but by no means identical, to the EU’s, with nations such as Armenia and Azerbaijan on the UK’s list but not the European one.
The proliferation of sanctions across different jurisdictions means that multinationals face a complex landscape of restrictive measures, not only within Europe but outside it, including the US, Australia, Canada and Japan, among other nations.
To be sure, it is the US sanctions regime that many companies around the world still pay the most attention to. This is due in part due to the primacy of the dollar in global trade and Washington’s linking usage of the dollar to its sanction regime, plus the use of secondary sanctions that seek to impose obligations on non-US businesses even when there is no direct nexus with the US market.
However, the growing scope and force of the EU sanctions regime means that Europe is also increasingly being seen as a top-tier sanctions jurisdiction, internationally. The next steps as part of this agenda will probably come from the next European Commission, which will be formed following the European Parliament elections in June 2024, and could include significant changes that redefine the role and impact of EU restrictive measures in an attempt to further strengthen the bloc’s sanctions posture.

  • Andrew Hammond is an associate at LSE IDEAS at the London School of Economics.
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