Professor Steve Peers, University of Essex

Photo credit: Pierre Blaché, via Wikicommons

*This blog post draws upon research for the forthcoming 5th edition of EU Justice and Home Affairs Law (OUP, 2023)

The EU Council recently decided to expand its criminal law authority to encompass breaches of EU foreign policy sanctions. Following this, the EU Commission presented a proposal for a Directive that aims to utilize this expanded authority to harmonize the criminal laws of Member States on this subject. This blog post will delve into analyzing both the decision and the proposed Directive to gauge their potential implications.

Expanding the Scope of EU Criminal Law

The Legal Framework of Criminal Law

The decision to expand the EU’s authority over criminal law finds its basis within the Treaty framework, specifically Article 83 of the Treaty on the Functioning of the European Union (TFEU). This article outlines the EU’s power to harmonize substantive criminal law, stating that the European Parliament and Council can establish minimum rules for defining criminal offenses and sanctions.

The treaty lists ten specific crime areas (commonly known as ‘Eurocrimes’) where the EU has the authority to harmonize laws. This authority extends to defining offenses and setting minimum rules for sanctions, including prison sentences and other penalties. Member States retain the right to enhance these minimum rules within their jurisdictions.

Since the Treaty of Lisbon came into effect in 2009, the EU has implemented Directives for the majority of Eurocrimes. However, arms trafficking, corruption, and organized crime still lack post-Lisbon legislation, although pre-existing EU laws and regulations address some aspects. Notably, the new competence regarding criminal law and EU foreign policy sanctions will cover certain aspects of arms trafficking.

It’s worth noting that Denmark opted out of EU criminal law adopted after the Lisbon Treaty, while Ireland opted in. The UK’s stance on this matter remains speculative.

Since the Treaty of Lisbon, the Court of Justice of the European Union (CJEU) holds jurisdiction over matters related to EU criminal law, enabling national courts to seek clarification from the CJEU regarding the interpretation and validity of EU Directives on substantive criminal law. Additionally, the EU Commission possesses the power to initiate infringement proceedings against Member States that fail to accurately or timely transpose EU Directives into their national law.

Beyond Article 83(1), the EU holds further competence to harmonize criminal law under Article 83(2) TFEU. This provision empowers the EU to enact harmonizing Directives in other criminal law areas if deemed necessary for the effective execution of a Union policy within a harmonized area. This provision has been used, for instance, in establishing a Directive concerning fraud against the EU’s financial interests. Although some argue that foreign policy sanctions already fall under Article 83(2), necessitating the recent expansion of ‘Eurocrimes,’ the EU decided otherwise.

Furthermore, Article 82(1) empowers the EU to adopt measures for mutual recognition in criminal matters, encompassing cooperation between criminal law authorities. Article 82(2) grants competence to harmonize national criminal procedures, encompassing evidence handling, victims’ rights, and fair trial standards. Further articles provide limited powers related to crime prevention, the Eurojust agency (facilitating cooperation between prosecutors), and the establishment of a European Public Prosecutor’s Office (EPPO).

The Legal Framework: EU Foreign Policy Sanctions

Unlike other Eurocrimes outlined in Article 83(1), a pre-existing body of EU law governs this area. This legal framework stems from two interconnected powers: first, the EU’s ability to issue Decisions concerning foreign policy sanctions and other foreign policy matters based on Article 29 of the Treaty of European Union (TEU). Second, Article 215 TFEU allows for these foreign policy sanctions to be reflected in ordinary EU law, typically in the form of Regulations.

While Article 215 stipulates qualified majority voting among Member States in the Council for adopting such Regulations, the practical rule is unanimity. This is because unanimity (with minor exceptions) governs the adoption of EU foreign policy measures that Article 215 legislation enforces. Although the Commission proposed abandoning unanimity in this context a few years ago, Member States didn’t support the change.

Over time, numerous EU foreign policy sanctions have been implemented, leading to substantial litigation, predominantly direct challenges to their validity by affected individuals, companies, or even States in the EU General Court. Appeals against the General Court’s judgments can be made to the CJEU. Furthermore, national courts have occasionally sought the CJEU’s interpretation or assessment of the validity of sanctions decisions.

The upcoming Eurocrime, referencing existing EU law, bears thematic resemblance to areas covered by the EU’s separate authority to harmonize criminal law, as stipulated in Article 83(2) TFEU. This is exemplified by the proposed Directive on environmental crime, which refers to specific EU legislation.

The Decision: A Closer Look

The core text of the Decision simply adds the violation of EU foreign policy sanctions to the Eurocrime list. Importantly, this applies solely to breaches of EU sanctions, not national ones. The decision doesn’t grant the EU authority to harmonize criminal laws concerning breaches of national foreign policy sanctions.

However, this new competence is not solely limited to breaches related to the Russian invasion of Ukraine. Although this event undeniably motivated the EU to expand its authority, the Decision’s phrasing doesn’t restrict its application to sanctions against Russia. As the Commission proposal for the Decision highlights, the EU has forty active sanctions regimes, targeting not only countries but also issues like the spread and use of chemical weapons, cyberattacks, human rights violations, and terrorism.

The preamble of the Decision emphasizes the broad range of sanctions covered, encompassing economic sanctions like trade and financial restrictions, entry bans into EU territory (enforced by listing sanctioned individuals in the Schengen Information System), and arms embargoes.

The preamble extensively justifies the EU’s expanded competence by referencing Article 83(1) TFEU’s criteria: “particularly serious crime with a cross-border dimension resulting from the nature or impact of such offences or from a special need to combat them on a common basis.” For instance, the preamble highlights the gravity of threats to international peace and security addressed by sanctions, as well as the offenses’ cross-border nature.

Examining the Proposed Directive

Content of the Proposal

The proposed Directive shares similarities with other Directives in this domain, such as the Directive on the harmonization of criminal law concerning terrorism. However, it also introduces novel elements, marking the EU’s first attempt to enact criminal laws related to violations of its foreign policy sanctions.

It is crucial to understand that this Directive wouldn’t criminalize breaches of EU foreign policy sanctions for the first time in most Member States. As with issues like terrorism and drug trafficking, these breaches already constitute crimes under most national laws. The EU’s objective is to harmonize these national laws.

The current proposal mandates that Member States criminalize nine specific categories of EU sanctions violations, including trading in goods or services restricted by EU sanctions, providing financial services despite an EU sanction, and even facilitating the entry or transit of a person barred from entry due to EU sanctions. Intentional breaches must be criminalized, and in most instances, ‘serious negligence’ leading to a breach must also be penalized. The Directive’s scope encompasses all EU foreign policy sanctions, not just those imposed on Russia.

A notable inclusion is a clause safeguarding lawyers advising clients accused of sanctions breaches: this clause clarifies that lawyers are not obligated to report information obtained through judicial proceedings or while establishing a client’s legal standing. Legal advice given in such circumstances enjoys professional secrecy protection, except when the lawyer participates in the violation, provides advice to violate sanctions, or knows the client is seeking advice for such a purpose.

Furthermore, the Directive includes a provision guaranteeing the right to silence and exemptions for essential daily goods and services, failures to report, and humanitarian aid delivery. It also criminalizes incitement, attempts (in most cases), aiding, and abetting. Regarding penalties, Member States must impose a maximum penalty of at least five years for most offenses and one year for others, with a minimum threshold of €100,000 involved (which can be met through a series of related offenses). For sanctions involving lower values or breaches of entry bans, Member States must provide for imprisonment as a possibility and, in all cases, must allow for additional penalties like fines.

The Directive also addresses the liability of legal entities, requiring penalties such as business closure or license revocation. Aggravated criminal liability is mandated in cases involving organized crime or breaches of duty by public officials or professionals, while mitigated liability is allowed for offenders who cooperate with authorities.

Criminal jurisdiction under this Directive would be broader than most EU criminal law Directives, which typically apply to acts committed within a Member State’s territory or by its nationals. This Directive’s jurisdiction would also cover habitual residents and extend the definition of ’territory’ to encompass a Member State’s airspace and any aircraft or vessel under its jurisdiction.

Unusually, the Directive introduces rules for statutes of limitations concerning prosecutions and sentence enforcement. The limitation period, in most cases, would be five years, with potential derogations. Previously, the EU had only agreed to regulate this aspect through legislation concerning fraud against the EU budget.

Lastly, the proposal would interface with other relevant EU laws. It connects with existing legislation on money laundering and confiscation and introduces a novel link to EU whistleblower protection laws. This ensures protection for individuals within companies or organizations who report sanctions breaches to authorities. Conversely, there’s no proposed amendment to the European Arrest Warrant framework, even though breaches of EU foreign policy sanctions aren’t currently exempt from the dual criminality requirement for extradition.

The Legislative Process

Similar to the initial decision, opt-out provisions apply to this proposed Directive. Denmark remains entirely outside the purview of post-Lisbon EU criminal law, while Ireland retains the choice to opt in or out.

The “ordinary legislative procedure” applies to enacting laws in this area, meaning a qualified majority of Member States in the Council is sufficient to pass a law alongside the European Parliament’s consent. However, Article 83(3) TFEU grants Member States a safeguard: if a Member State believes a Directive would significantly impact its criminal justice system, it can trigger an “emergency brake,” prompting discussions among EU leaders. Should no agreement be reached, a minimum of nine Member States desiring to participate can utilize “enhanced cooperation” to proceed without the objecting Member State(s) on an expedited basis.

Concluding Remarks

Gauging the practical impact of this competence expansion and potential harmonization of laws remains difficult without specifics on how national laws would be altered. As with any form of conduct regulation, enforcing criminal law necessitates sufficient resources and expertise for investigations and prosecutions. The prospect of empowering the European Public Prosecutor’s Office to address violations of EU foreign policy sanctions has been suggested as a solution.

Whether this expansion of EU authority constitutes another instance of the EU’s perceived power grabs is debatable. Notably, this marks the first such competence expansion since the Lisbon Treaty came into effect thirteen years ago. In contrast, Member States haven’t reached an agreement on previous proposals to expand the list of Eurocrimes or to transition to majority voting in specific foreign policy areas.

This expansion is best understood as part of a broader EU response to the Russian invasion of Ukraine, a response that has also triggered developments in EU defense powers and the unprecedented use of the temporary protection Directive. While this expansion alone won’t end the invasion – and faces criticisms of being insufficient and tardy – it could contribute to more effectively enforcing existing sanctions against the invasion. At the very least, it sends a political signal of the EU’s commitment to strengthening enforcement.