(1)

In order to ensure the effective application of Union restrictive measures, the integrity of the internal market within the Union, and to achieve a high level of security within the area of freedom, security and justice, it is necessary to establish minimum rules concerning the definition of criminal offences and penalties for the violation of those Union restrictive measures.

(2)

Union restrictive measures, such as measures concerning the freezing of funds and economic resources, the prohibitions on making funds and economic resources available and the prohibitions on entry into or transit through the territory of a Member State, as well as sectoral economic and financial measures and arms embargoes, are an essential tool for the promotion of the objectives of the Common Foreign and Security Policy (CFSP), as set out in Article 21 of the Treaty on European Union (TEU). Those objectives include safeguarding the Union’s values, security, independence and integrity, consolidating and supporting democracy, the rule of law, human rights and the principles of international law and preserving peace, preventing conflicts and strengthening international security in accordance with the aims and principles of the United Nations Charter.

(3)

To ensure the effective application of Union restrictive measures, it is necessary that Member States have effective, proportionate and dissuasive criminal and non-criminal penalties in place for the violation of those Union restrictive measures, including obligations, such as that of reporting, established therein. It is also necessary that those penalties address the circumvention of Union restrictive measures.

(4)

The effective application of Union restrictive measures necessitates common minimum rules concerning the definitions of criminal conduct violating Union restrictive measures. Member States should ensure that such conduct constitutes a criminal offence when it is intentional and in violation of a prohibition or an obligation that constitutes a Union restrictive measure or that is set out in a national provision implementing a Union restrictive measure, where national implementation of that measure is required. Certain conduct should constitute a criminal offence also if carried out with serious negligence. With regard to the criminal offences defined in this Directive, the notion of ‘serious negligence’ should be interpreted in accordance with national law, taking into account relevant case law of the Court of Justice of the European Union. Member States should be able to decide that violations of Union restrictive measures involving funds, economic resources, goods, services, transactions or activities of a value of less than EUR 10 000 do not constitute criminal offences. The exclusion of certain violations from the scope of this Directive does not affect any obligations laid down in acts setting out Union restrictive measures to ensure that violations are punishable by effective, proportionate and dissuasive criminal or non-criminal penalties.

(5)

Acts setting out Union restrictive measures can provide for exceptions from the prohibitions laid down therein in the form of exemptions or derogations. Conduct either covered by an exemption provided for in an act setting out Union restrictive measures or authorised by the competent authorities of the Member States by means of a derogation in accordance with the acts setting out Union restrictive measures should not be regarded as a violation of a Union restrictive measure.

(6)

In particular, the effective application of Union restrictive measures necessitates common minimum rules for the violations of measures consisting in freezing funds or economic resources as laid down in the relevant Council Regulations. Those measures include the prohibition to make funds or economic resources available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies subject to measures consisting in freezing funds or economic resources, as well as the obligation to freeze all funds and economic resources belonging to, owned, held or controlled by the same persons, entities or bodies.

(7)

Union restrictive measures include restrictions on admission (travel bans) which should be covered by this Directive. Such measures, usually laid down in a Council Decision adopted on the basis of Article 29 TEU and implemented by means of national law, require Member States to take the necessary measures to prevent the designated persons from entering into, or transiting through, all zones of the territory of a Member State.

(8)

Member States are encouraged to pay particular attention to the mechanisms for granting nationality and residence, in order to prevent individuals subject to Union restrictive measures from using those mechanisms for violating such Union restrictive measures.

(9)

Entering into or continuing any form of transaction, including financial transactions, as well as the award or continued execution of any public or concession contract falling within the scope of Directives 2009/81/EC (4), 2014/23/EU (5), 2014/24/EU (6) or 2014/25/EU (7) of the European Parliament and of the Council, with a third State, bodies of a third State or entities and bodies directly or indirectly owned or controlled by a third State or bodies of a third State, should constitute a criminal offence, where the prohibition or restriction of that conduct constitutes a Union restrictive measure.

(10)

Union restrictive measures include the prohibition of trading, importing, exporting, selling, purchasing, transferring, transiting or transporting goods or services. The violation of such prohibitions should constitute a criminal offence, including where the goods are imported or exported from or to a third country in order to have them transferred to a destination in regard to which the prohibition to import, export, sell, purchase, transfer, transit or transport those goods constitutes a Union restrictive measure. The provision, directly or indirectly, of technical assistance, brokering services, insurance, and any other service related to those goods or services, should also constitute a criminal offence. For that purpose, the notion of ‘goods’ includes items, such as military technology and equipment, goods, software and technology, which are included in the Common Military List of the European Union adopted by the Council on 20 February 2023 (8) or are listed in Annexes I and IV to Regulation (EU) 2021/821 of the European Parliament and of the Council (9).

(11)

Union restrictive measures include sectoral economic and financial measures on the provision of financial services or the performance of financial activities. Such financial services and activities include but are not limited to financing and financial assistance, providing investment and investment services, issuing transferable securities and money market instruments, accepting deposits, providing specialised financial messaging services, dealing in banknotes, providing credit rating services, and providing crypto-assets and wallets. The violation of those sectoral economic and financial measures should constitute a criminal offence.

(12)

Union restrictive measures include sectoral economic and financial measures on the provision of services other than financial services. Such services include but are not limited to the provision of legal advisory services, trust services, public relations services, accounting, auditing, bookkeeping and tax consulting services, business and management consulting, IT consulting, broadcasting, architectural and engineering services. The violation of those sectoral economic and financial measures should constitute a criminal offence.

(13)

None of the provisions of this Directive should be understood as imposing any obligations on natural persons that would prejudice the right not to incriminate oneself and to remain silent, as enshrined in Article 7 of Directive (EU) 2016/343 of the European Parliament and of the Council (10), for the Member States bound by it, and in Article 48 of the Charter of Fundamental Rights of the European Union (the ‘Charter’).

(14)

The effective application of Union restrictive measures necessitates common minimum rules concerning the definition of criminal offences consisting of conduct circumventing Union restrictive measures.

(15)

An example of conduct circumventing Union restrictive measures that is increasingly widespread is the practice by designated persons, entities and bodies of using, transferring to a third party or otherwise disposing of funds or economic resources directly or indirectly owned, held or controlled by those designated persons, entities or bodies in order to conceal those funds or economic resources. Furthermore, the practice of providing false or misleading information, including incomplete relevant information, in order to conceal that a designated person, entity or body is the ultimate owner or beneficiary of funds or economic resources subject to Union restrictive measures also amounts to a circumvention of Union restrictive measures. Therefore, that conduct circumventing Union restrictive measures should constitute a criminal offence under this Directive.

(16)

Failure to comply with an obligation to report to the competent administrative authorities laid down by acts setting out Union restrictive measures should constitute a criminal offence under this Directive.

(17)

The effective application of Union restrictive measures necessitates common minimum rules concerning the definition of criminal offences consisting of conduct breaching or failing to fulfil the specific conditions under authorisations granted by the competent authorities to carry out certain activities, which in the absence of such an authorisation amount to a violation of a prohibition or restriction that constitutes a Union restrictive measure. Any activity conducted in the absence of an authorisation could be considered, depending on the circumstances of the case, a violation of Union restrictive measures that consist in freezing funds or economic resources, travel bans, arm embargoes or other sectoral economic and financial measures.

(18)

Legal professionals, as defined by the Member States, should be subject to this Directive, including the obligation to report the violation of Union restrictive measures, when providing services in the context of professional activities, such as legal, financial and trade services. There is a clear risk of the services of those legal professionals being misused for the purpose of violating Union restrictive measures. There should, however, be exemptions from any obligation to report information that they receive from, or obtain on, one of their clients, in the course of ascertaining their legal position or performing the task of defending or representing that client in, or concerning, judicial proceedings, including providing advice on instituting or avoiding such proceedings. Therefore, such legal advice should remain subject to the obligation of professional secrecy, except where the legal professional is intentionally taking part in the violation of Union restrictive measures, where the legal advice is provided for the purposes of violating Union restrictive measures, or where the legal professional knows that the client is seeking legal advice for the purposes of violating Union restrictive measures.

(19)

Union restrictive measures should not result in the discrimination against clients of credit and financial institutions or in their undue exclusion from access to financial services.

(20)

This Directive does not intend to criminalise humanitarian assistance for persons in need or activities in support of basic human needs provided in accordance with the principles of impartiality, humanity, neutrality and independence, and where applicable, with international humanitarian law.

(21)

Inciting, and aiding and abetting the commission of a criminal offence under this Directive should be criminalised. The attempt to commit certain criminal offences under this Directive should also be criminalised.

(22)

Penalties for natural persons for the criminal offences related to the violation of Union restrictive measures as defined in this Directive should be effective, dissuasive and proportionate. To that end, minimum levels for the maximum term of imprisonment should be set for natural persons. Accessory penalties or measures should also be available in criminal proceedings.

(23)

Given that legal persons are also subject to Union restrictive measures, such legal persons should be held liable for offences related to the violation of Union restrictive measures as defined in this Directive. ‘Legal persons’ are thereby understood as any legal entity having such status under the applicable law, except for States or public bodies exercising State authority and for public international organisations. In order to achieve the objectives of this Directive, Member States which law provides for the criminal liability of legal persons should ensure that their law provides for effective, dissuasive and proportionate types and levels of criminal penalties as laid down in this Directive. In order to achieve the objectives of this Directive, Member States which law does not provide for the criminal liability of legal persons should ensure that their law provides for effective, dissuasive and proportionate types and levels of non-criminal penalties as laid down in this Directive. The maximum levels of fines provided for in this Directive for the offences defined in it should apply at least to the most serious forms of such offences. It is important that the gravity of the conduct, as well as the individual, financial and other circumstances of the legal persons concerned are taken into account to ensure that the penalty imposed is effective, dissuasive and proportionate. Member States should be able to set the maximum levels of fines either as a percentage of the total worldwide turnover of the legal person concerned, or in fixed amounts. Member States should decide which of those two options they will use, when transposing this Directive.

(24)

Where Member States, in the determination of fines to be imposed on legal persons, opt to implement the criterion of the total worldwide turnover of a legal person, they should decide whether to calculate that turnover based on the business year preceding that in which the criminal offence was committed, or on the business year preceding that of the decision to impose the fine. Member States should also consider establishing rules for cases where it is not possible to set the amount of a fine on the basis of the total worldwide turnover of the legal person in the business year preceding that in which the criminal offence was committed, or in the business year preceding that of the decision to impose the fine. In such cases, Member States should be able to take into account other criteria, such as the total worldwide turnover in a different business year. Where those rules include the setting of fixed amounts of fines, it should not be necessary for the maximum level of those amounts to reach the levels established in this Directive as the minimum requirement for the maximum level of fines set in fixed amounts.

(25)

Where Member States opt for a maximum level of fines set in fixed amounts, such levels should be laid down in national law. The highest levels of such fines should apply to the most serious forms of criminal offences defined in this Directive committed by legal persons of financial strength. Member States should be able to determine the method of calculation of those highest levels of fines, including specific conditions therefor. Member States are invited to regularly review the levels of fines set in fixed amounts having regard to rates of inflation and other fluctuations in monetary value, in accordance with procedures laid down in their national law. Member States that do not have the euro as their currency should provide for maximum levels of fines in their currency that correspond to the levels determined in this Directive in euro on the date of its entry into force. Those Member States are invited to regularly review the levels of fines also with regard to the development of the exchange rate.

(26)

The establishment of the maximum level of fines is without prejudice to the discretion of judges or courts in criminal proceedings to impose appropriate penalties in individual cases. As this Directive does not establish any minimum levels of fines, the judges or courts should, in any case, impose appropriate penalties taking into account the individual, financial and other circumstances of the legal person concerned and the gravity of the conduct.

(27)

Penalties levels imposed should be further approximated and the effectiveness of such levels should be fostered through introducing common aggravating circumstances that, in accordance with relevant provisions of national law, reflect the gravity of the criminal offence committed. The notion of ‘aggravating circumstances’ should be understood either as facts enabling the national judge or court to pronounce more severe sentences for the same offence than the sentence normally imposed without such facts, or as the possibility to treat several criminal offences cumulatively in order to increase the level of the penalty. Member States should ensure, in accordance with national law, that at least one of the following can be regarded as aggravating circumstances: where the offence was committed in the framework of a criminal organisation as defined in Council Framework Decision 2008/841/JHA (11); where the offence involved false or forged documents; where the offence was committed by a professional service provider in violation of the professional obligations of such professional service provider; where the offence was committed by a public official when performing his or her duties, who can be any relevant official, whether holding a formal office in the Union, in the Member States or in third countries, or another person performing a public function; where the offence generated or was expected to generate substantial financial benefits, or avoided substantial expenses, directly or indirectly; where the offender destroyed evidence, or intimidated or influenced witnesses or complainants; or where the natural or legal person had previously been definitively convicted. Member States should ensure that at least one of those aggravating circumstances is provided for as a possible aggravating circumstance in accordance with applicable rules in their legal system on aggravating circumstances. In any case, it should remain within the discretion of the judge or the court to determine whether to increase the sentence, taking into account the specific circumstances in each individual case.

(28)

Member States should ensure, in accordance with national law, that at least one of the following can be regarded as mitigating circumstances: where 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 other offenders; or where the offender provides the competent authorities with information they would not otherwise have been able to obtain, helping them to find evidence. In the assessment of mitigating circumstances, it should remain within the discretion of the judge or the court to determine whether to decrease the sentence, taking into account the specific circumstances in each individual case. Those circumstances could include the nature, timing and extent of the information provided and the level of cooperation provided by the offender.

(29)

The freezing of funds and of economic resources imposed by Union restrictive measures is of an administrative nature. As such, it should be distinguished from freezing measures of a criminal nature, as referred to in Directive 2014/42/EU of the European Parliament and of the Council (12). Member States should enable the freezing and confiscation of instrumentalities and proceeds from the offences referred to in this Directive. Member States bound by Directive 2014/42/EU should do so in accordance with that Directive. In addition, specifically in situations in which the designated person, or the representative of a designated entity or body, commits or participates in certain offences concerning the circumvention of a Union restrictive measure, there is a need to enable the freezing and confiscation of funds and economic resources subject to Union restrictive measures, even where they might not constitute instrumentalities or proceeds under Directive 2014/42/EU. In those circumstances, as a consequence of the conduct of concealing, the designated person, entity or body can continue to access and make full use or dispose of the funds or economic resources subject to Union restrictive measures which have been concealed. Such funds or economic resources should therefore be subject to freezing and confiscation, in accordance with Directive 2014/42/EU. The rights of bona fide third parties should not be prejudiced.

(30)

Member States should lay down rules concerning limitation periods necessary to combat the criminal offences related to the violation of Union restrictive measures effectively, without prejudice to national rules that do not set limitation periods for investigation, prosecution and enforcement. Member States are permitted under this Directive to establish limitation periods shorter than those laid down in this Directive, provided that in their legal systems it is possible to interrupt or suspend such shorter limitation periods in the event of acts which can be specified in accordance with national law.

(31)

Given, in particular, the global activities of the offenders, together with the cross-border nature of the criminal offences defined in this Directive and the possibility of cross-border investigations being carried out, Member States should establish jurisdiction in order to combat such offences effectively.

(32)

To ensure the effective investigation and prosecution of violations of Union restrictive measures, Member States should make available to competent authorities effective investigative tools such as those available under their national law for combatting organised crime or other serious crime cases, if and to the extent that the use of those tools is appropriate and proportionate to the nature and gravity of the criminal offences as provided for in national law. Such tools could include the interception of communications, covert surveillance, including electronic surveillance, controlled deliveries, the monitoring of bank accounts and other financial investigation tools. Those tools should be used in line with the principle of proportionality and in full respect of the Charter. It is imperative that the right to the protection of personal data be respected.

(33)

Persons referred to in Article 4 of Directive (EU) 2019/1937 of the European Parliament and of the Council (13) reporting information to competent authorities concerning past, ongoing or planned violations of Union restrictive measures, including attempts to circumvent them, which they have acquired in the context of their work-related activities, risk suffering retaliation in that context. Such reporting persons’ reports can strengthen the enforcement of Union restrictive measures by providing information related, for example, to facts concerning violations of Union restrictive measures, their circumstances and the individuals, companies and third countries involved. Therefore, it should be ensured that adequate arrangements are in place to enable such reporting persons to use confidential channels, to alert the competent authorities and to protect them from retaliation. For that purpose, it should be provided that Directive (EU) 2019/1937 is applicable to the reporting of violations of Union restrictive measures and to the protection of persons reporting such violations, under the conditions established therein.

(34)

To ensure an effective, integrated and coherent enforcement system, Member States should organise internal cooperation and communication between all their competent authorities involved in administrative and criminal enforcement.

(35)

To ensure the effective investigation and prosecution of violations of Union restrictive measures, Member States’ competent authorities should cooperate with each other through and with Europol, Eurojust and the European Public Prosecutor’s Office, within their respective competences and in accordance with the applicable legal framework. Member States’ competent authorities should also share information among each other and with the Commission on practical issues. The Commission, where necessary, could establish a network of experts and practitioners to share best practices and provide assistance to Member States’ competent authorities in order to facilitate the investigation of offences related to the violation of Union restrictive measures. Such assistance should not entail the participation of the Commission in the investigation and prosecution of individual criminal cases conducted by Member States’ competent authorities and should not be understood as including financial support or any other budgetary commitment by the Commission.

(36)

To effectively address the criminal offences defined in this Directive, it is necessary that competent authorities in the Member States collect accurate, consistent and comparable statistical data on those offences. Member States should therefore ensure that an adequate system is in place for the recording, production and transmission of existing statistical data on the offences defined in this Directive. It is important that those statistical data are used by Member States to serve the strategic and operational planning of enforcement activities, to analyse the scale of and trends in offences related to the violation of Union restrictive measures, as well as for providing information to citizens. Member States should transmit to the Commission relevant statistical data on proceedings related to the violation of Union restrictive measures, extracted from data that already exist at a centralised or decentralised level within the whole Member State. The Commission should regularly assess and publish in a report the results of its assessment based on the statistical data transmitted by the Member States.

(37)

An amendment to Directive (EU) 2018/1673 of the European Parliament and of the Council (14) should ensure that the violation of Union restrictive measures will be considered a predicate offence for money laundering in accordance with that Directive.

(38)

In view of the urgent need to hold individuals and legal persons involved in the violation of Union restrictive measures accountable, Member States should bring into force the laws, regulations and administrative provisions necessary to comply with this Directive within 12 months from the date of entry into force of this Directive.

(39)

In accordance with Articles 1 and 2 of Protocol No 22 on the position of Denmark, annexed to the TEU and to the Treaty on the Functioning of the European Union (TFEU), Denmark is not taking part in the adoption of this Directive and is not bound by it or subject to its application.

(40)

In accordance with Article 3 of Protocol No 21 on the position of the United Kingdom and Ireland in respect of the area of freedom, security and justice, annexed to the TEU and to the TFEU, Ireland has notified, by letter of 3 March 2023, its wish to take part in the adoption and application of this Directive.

(41)

Since the objectives of this Directive, namely to establish common minimum rules concerning the definitions of offences related to the violation of Union restrictive measures and the availability of effective, dissuasive and proportionate criminal penalties for criminal offences related to the violation of Union restrictive measures cannot be sufficiently achieved by the Member States taking into account the inherent cross-border nature of the violation of Union restrictive measures and its potential to undermine the achievement of the Union objectives to safeguard international peace and security as well as to uphold Union common values, but can rather, by reason of the scale and effects of this Directive, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality as set out in that Article, this Directive does not go beyond what is necessary to achieve those objectives.

(42)

In implementing this Directive, Member States should ensure that the procedural rights of suspected or accused persons in criminal proceedings are observed. In this regard, the obligations under this Directive should not affect Member States obligations under Union law on procedural rights in criminal proceedings, in particular Directives 2010/64/EU (15), 2012/13/EU (16), 2013/48/EU (17), (EU) 2016/343, (EU) 2016/800 (18) and (EU) 2016/1919 (19) of the European Parliament and of the Council.

(43)

This Directive respects the fundamental rights and observes the principles recognised in particular by the Charter, including the right to liberty and security, the protection of personal data, the freedom to conduct a business, the right to property, the right to an effective remedy and to a fair trial, the presumption of innocence and right of defence, including the right not to incriminate oneself and to remain silent, the principles of legality and proportionality of criminal offences and penalties, including the principle of non-retroactivity of criminal penalties, as well as the principle of ne bis in idem. This Directive seeks to ensure full respect for those rights and principles and is to be implemented accordingly,

(1)

‘Union restrictive measures’ means restrictive measures adopted by the Union on the basis of Article 29 TEU or Article 215 TFEU;

(2)

‘designated person, entity or body’ means a natural or legal person, entity or body subject to Union restrictive measures;

(3)

‘funds’ means financial assets and benefits of every kind, including, but not limited to:

(4)

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

(5)

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

(6)

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

(a)

the offence was committed in the framework of a criminal organisation as defined in Framework Decision 2008/841/JHA;

(b)

the offence involved the use by the offender of false or forged documents;

(c)

the offence was committed by a professional service provider in violation of the professional obligations of such professional service provider;

(d)

the offence was committed by a public official when performing his or her duties or by another person performing a public function;

(e)

the offence generated or was expected to generate substantial financial benefits, or avoided substantial expenses, directly or indirectly, to the extent that such benefits or expenses can be determined;

(f)

the offender destroyed evidence, or intimidated witnesses or complainants;

(g)

the natural or legal person had previously been convicted by a final judgment of offences covered by Articles 3 and 4.

(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.

(a)

to ensure common priorities and understanding of the relationship between criminal and administrative enforcement;

(b)

to exchange information for strategic purposes, within the limits set out in applicable Union and national law;

(c)

consultation in individual investigations, within the limits set out in applicable Union and national law.

‘(w)

violation of Union restrictive measures.’.