To put it even more bluntly: An existing legal minefield seems to be intentionally
ignored by a few operators for the prospect of higher financial profits. What are the
legal consequences? Apparently, even though the EU Commission works towards a
more uniform application of EU sanctions legislation, the division of competencies
between the EU and its Member States on the legislative level potentially results in
inconsistent (if not inefficient) practical enforcement of the applicable rules. With
one exception,
43 the EU passes the relevant sanctions legislation and these acts are
directly applicable as Regulations in all Member States. Moreover, the Court of
Justice of the EU (CJEU) ensures uniform interpretation of EU law. Nevertheless,
there are practical differences in the Member States’ interpretation, application and
enforcement of sanctions. Those differences can, e.g., materialise in the way subsidiaries of listed entities are treated or in a more or less extensive interpretation of
technical legal terms (such as the term “spare parts”). Obviously, the relevant data
exchange between the EU Member States could be improved, even though the EU
Members are required to report that information to the European Commission, e.g.,
on granted or denied export licenses.
When it comes to the enforcement of sanctions-related financial and administrative penalties, the prosecution of sanctions violations represents a responsibility of
the EU Members.
Generally, EU sanctions law requires EU Members to take all measures necessary
to ensure that the sanctions are efficiently implemented and properly enforced. Any
criminal penalties, thus also applying to sanctions regime violations, must be
“effective, proportionate and dissuasive”, taking into account the EU Charter of
Fundamental Rights and the jurisprudence of the European Court on Human Rights
(ECHR). However, it may be questioned whether the current EU sanctions enforcement with respect to the Crimean peninsula, which is on its face directed against
Russia, works actually in an “effective, proportionate and dissuasive” manner. It
probably also reflects the political view of some EU countries that economic
sanctions are not at all the right approach in mitigating the Crimea/Sevastopol
situation and the general tension between Russia and Ukraine, taking into account
that some European trading sectors (for example, certain agricultural products) are
also negatively affected by the sanctions fallout. While there is definitely some merit
to this view, the question for alternatively efficient political and legal strategies
remains unresolved.
2.3 US Sanctions in Respect of Actions Relating to Ukraine
In the period of 6 to 20 March 2014, (then) US President Obama issued Executive
Orders No. 13660, 13661 and 13662 “blocking property of certain persons
43 Embargoes on arms and related material still require legislative implementation by the EU
Member States.
Sanctions Compliance Risks in International Shipping: Closure of Five. . .
299
ignored by a few operators for the prospect of higher financial profits. What are the
legal consequences? Apparently, even though the EU Commission works towards a
more uniform application of EU sanctions legislation, the division of competencies
between the EU and its Member States on the legislative level potentially results in
inconsistent (if not inefficient) practical enforcement of the applicable rules. With
one exception,
43 the EU passes the relevant sanctions legislation and these acts are
directly applicable as Regulations in all Member States. Moreover, the Court of
Justice of the EU (CJEU) ensures uniform interpretation of EU law. Nevertheless,
there are practical differences in the Member States’ interpretation, application and
enforcement of sanctions. Those differences can, e.g., materialise in the way subsidiaries of listed entities are treated or in a more or less extensive interpretation of
technical legal terms (such as the term “spare parts”). Obviously, the relevant data
exchange between the EU Member States could be improved, even though the EU
Members are required to report that information to the European Commission, e.g.,
on granted or denied export licenses.
When it comes to the enforcement of sanctions-related financial and administrative penalties, the prosecution of sanctions violations represents a responsibility of
the EU Members.
Generally, EU sanctions law requires EU Members to take all measures necessary
to ensure that the sanctions are efficiently implemented and properly enforced. Any
criminal penalties, thus also applying to sanctions regime violations, must be
“effective, proportionate and dissuasive”, taking into account the EU Charter of
Fundamental Rights and the jurisprudence of the European Court on Human Rights
(ECHR). However, it may be questioned whether the current EU sanctions enforcement with respect to the Crimean peninsula, which is on its face directed against
Russia, works actually in an “effective, proportionate and dissuasive” manner. It
probably also reflects the political view of some EU countries that economic
sanctions are not at all the right approach in mitigating the Crimea/Sevastopol
situation and the general tension between Russia and Ukraine, taking into account
that some European trading sectors (for example, certain agricultural products) are
also negatively affected by the sanctions fallout. While there is definitely some merit
to this view, the question for alternatively efficient political and legal strategies
remains unresolved.
2.3 US Sanctions in Respect of Actions Relating to Ukraine
In the period of 6 to 20 March 2014, (then) US President Obama issued Executive
Orders No. 13660, 13661 and 13662 “blocking property of certain persons
43 Embargoes on arms and related material still require legislative implementation by the EU
Member States.
Sanctions Compliance Risks in International Shipping: Closure of Five. . .
299