RIGA - The European Commission has proposed rules on freezing and confiscating assets of oligarchs violating restrictive measures and of criminals, LETA was told at the press office of the European Commission's Representation in Latvia.
The European Commission proposes to add the violation of EU restrictive measures to the list of EU crimes. The Commission is also proposing new reinforced rules on asset recovery and confiscation, which will also contribute to the implementation of EU restrictive measures.
While the Russian aggression on Ukraine is ongoing, it is paramount that EU restrictive measures are fully implemented and the violation of those measures must not be allowed to pay off. Today's proposals aim to ensure that the assets of individuals and entities that violate the restrictive measures can be effectively confiscated in the future. The proposals come in the context of the ‘Freeze and Seize' Task Force, set up by the Commission in March.
The Commission is proposing to add the violation of restrictive measures to the list of EU crimes. This will allow to set a common basic standard on criminal offences and penalties across the EU. In turn, such common EU rules would make it easier to investigate, prosecute and punish violations of restrictive measures in all member states alike.
The violation of restrictive measures, meets the criteria set out in the Treaty on the Functioning of the European Union, as it is a crime in a majority of member states. It is also a particularly serious crime, since it may perpetuate threats to international peace and security, and has a clear cross-border context, which requires a uniform response at EU level and global level.
Once the EU Member States agree on the Commission's initiative to extend the list of EU crimes, the Commission will present a legislative proposal based on the accompanying Communication and Annex.
Secondly, the Commission is putting forward a proposal for a Directive on asset recovery and confiscation. The core objective is to ensure that crime does not pay by depriving criminals of their ill-gotten gains and limiting their capacity to commit further crimes. The proposed rules will also apply to the violation of restrictive measures, ensuring the effective tracing, freezing, management and confiscation of proceeds derived from the violation of restrictive measures.
The proposal modernises EU asset recovery rules, among others, by: Extending the mandate of Asset Recovery Offices to swiftly trace and identify assets of individuals and entities subject to EU restrictive measures. These powers will also apply to criminal assets, including by urgently freezing property when there is a risk that assets could disappear; Expanding the possibilities to confiscate assets from a wider set of crimes, including the violation of EU restrictive measures, once the Commission proposal on extending the list of EU crimes is adopted; Establishing Asset Management Offices in all EU Member States to ensure that frozen property does not lose value, enabling the sale of frozen assets that could easily depreciate or are costly to maintain.
Restrictive measures are an essential tool for defending international security and promoting human rights. Such measures include asset freezes, travel bans, import and export restrictions and restrictions on banking and other services. Currently, there are over 40 regimes of restrictive measures in place in the EU and the rules criminalizing the violations of such measures vary across member states.
The European Union has put in place a series of restrictive measures against Russian and Belarusian individuals and companies, as well as sectoral measures some of which date back to 2014. The implementation of EU restrictive measures following the Russian attack on Ukraine shows the complexity of identifying assets owned by oligarchs, who hide them across different jurisdictions through complex legal and financial structures. An inconsistent enforcement of restrictive measures undermines the Union's ability to speak with one voice.
In order to enhance Union-level coordination in the enforcement of these restrictive measures, the Commission set up the ‘Freeze and Seize' Task Force. Besides ensuring coordination among Member States, the Task Force seeks to explore the interplay between restrictive measures and criminal law measures. So far, Member States reported frozen assets worth EUR 9.89 billion and blocked EUR 196 billion worth of transactions. On April 11, Europol, jointly with Member States, Eurojust and Frontex, launched Operation Oscar to support financial and criminal investigations targeting criminal assets owned by individuals and legal entities covered by EU sanctions.
Restrictive measures are only effective if systematically and fully enforced, and violations punished. Member states are already required to introduce effective, proportionate and dissuasive penalties for violations of restrictive measures. However, some member states use much broader definitions, others have more detailed provisions in place. In some member states, violation of restrictive measures is an administrative and a criminal offence, in some purely a criminal offence, and in some, restrictive measures violations currently only lead to administrative penalties. This patchwork enables persons subject to restrictive measures to circumvent them.
The Commission has also published today a progress report on the implementation of the EU Security Union Strategy, which highlights the security threats stemming from Russia's unprovoked and unjustified war against Ukraine. The report emphasizes the need of a coordinated EU approach on a range of issues and highlights that fight against organized crime is one of the top priorities for the EU in ensuring a Security Union for all.