EU sanctions—or “restrictive measures”—against third countries, individuals or entities, are issued within the EU Common Foreign and Security Policy to bring about a change in policy or activity by a target country, part of a country, government, entities and/or individuals, with the ultimate goal to pursue peace, democracy and the respect for the rule of law, human rights and international law, which are the main objectives of said Policy. Certain EU measures are imposed by the EU in order to implement Resolutions adopted by the UN Security Council under Chapter VII of the UN Charter. In cases where the EU is implementing UN Security Council Resolutions, EU legal instruments will need to adhere to those Resolutions; however, the EU may also decide to apply—and does apply—additional and more restrictive measures.

EU Council Regulations are directly applicable and enforceable in any Member State, but the competent Member State authorities are responsible for the implementation and enforcement of EU sanctions. For this reason, the manner in which sanctions have been implemented may vary from one Member State to another. In 2021, the EU Commission announced the adoption of initiatives to improve the uniform application of sanctions across the EU, through—among other things—the development of a database, the Sanctions Information Exchange Repository, to enable prompt reporting and exchange of information between Member States and the Commission on the implementation and enforcement of sanctions, and the creation of a single contact point for enforcement and implementation issues which have cross-border dimension (see our Insight on these issues here.)

EU Regulations imposing international sanctions typically require each Member State to enact and implement adequate and proportionate penalties to address any violations by the Member State’s citizens. In general, consequences deriving from the violation of EU sanctions include fines, imprisonment and confiscation of proceeds or other property.

In addition to legislation adopted by the EU, Member States may implement additional national legislative frameworks, laws or regulations to freeze funds, financial assets and economic resources of other persons and entities.

The EU sanctions regimes do not include sanctions having extra-territorial effects similar to those of US secondary sanctions, although they do generally apply to EU citizens wherever they are in the world.

EC Council Regulation No 2271/96, known as the Blocking Statute, prohibits EU operators from complying with certain defined US extra-territorial legislation, specifically in relation to Cuba and Iran, unless they are exceptionally authorized to do so by the European Commission. The Blocking Statute also prevents any foreign court rulings based on the blocked legislation from having effect in the EU and allows EU residents and companies to recover damages arising from the effects of such legislation in certain circumstances.

 

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