“What does the new draft law on liability for sanctions violations provide for?”, — write: epravda.com.ua
The other day there was news that the president introduced a draft law on criminal liability for violation and circumvention of sanctions. This event was long awaited. The EU did this back in May 2024. Ukraine could not stay away. The draft law is the result of complex work of the state and public institutions. Given that the president personally introduced the draft law and publicly announced it, it is clear that it will be adopted promptly with minimal amendments. The document provides for the criminalization of violations of the sanctions regime of Ukraine. However, its content is significantly limited compared to what was discussed at the preparation stage and does not take into account the practices of the partner states of the sanctions coalition. What is the circumvention of sanctions Despite the ten-year application of sanctions by Ukraine, the prohibition of their violation and circumvention has not been established. Project developers are correcting this gap. The document defines a wide list of actions that will constitute the circumvention of sanctions. This is any action aimed at removing an asset from the influence of sanctions. Advertisement: This is the acquisition, transfer or change of the form of assets of a sanctioned person; actions aimed at concealing the fact of ownership and control over an asset by a sanctioned person (the threshold for the value of assets is set at UAH 151,000); bankruptcy of the company, in respect of which or whose owner is sanctioned in the form of blocking of assets; submission of a knowingly false statement about the inability of the sanctioned person to fulfill obligations to the creditor. For what and how will they be punished? It is proposed to establish responsibility for violation of sanctions (intentional and negligent) and intentional circumvention of sanctions. Violation will mean non-fulfillment of sanctions or obstruction of their fulfillment. For example, a violation of sanctions would be the improper implementation of compliance procedures and the conclusion of a contract with a sanctioned person or continued cooperation with him. Deliberate circumvention of sanctions is, for example, a change in the owner of an asset after the adoption of a law on sanctions. We are talking only about sectoral and individual personal sanctions defined in the footnote to the corresponding article of the code. The threshold for prosecution is set at 151,000. UAH The exception is military or dual purpose goods, the minimum value of which is not determined. Advertising: Read also: Fine or prison: how Zelenskyy proposes to punish for violating sanctions The following punishments are proposed for the specified actions: a fine (from UAH 425,000 to UAH 2 million ) or deprivation of liberty for a term of two to ten years. Violators will also be deprived of the right to hold positions or engage in certain activities for a period of 10 to 15 years. Confiscation of property will be applied on an optional basis. The responsibility will not escape the company either. Violation and circumvention of sanctions will be punished by a fine, confiscation of property or even liquidation of the business. The exception is banks, in respect of which liquidation does not apply. In addition, criminal liability will be brought to persons who deliberately do not fulfill or prevent the fulfillment of the decision of the State Security Council on the recovery of assets of the Russian Federation’s accomplices into state income. It is suggested that the SBU be entrusted with the responsibility of investigating a new type of crime. In criminal proceedings regarding the violation and/or intentional circumvention of sanctions, it is proposed to allow investigation and trial in the absence of the suspect or accused (in absentia). Weaknesses of the draft law Of course, criminalizing the violation and circumvention of sanctions is a step that will significantly increase their effectiveness. However, the proposed draft law does not fully correspond to world practice. First, the draft law does not provide for the possibility for a sanctioned person to obtain permission to commit certain actions prohibited by sanctions. In civilized countries (USA, Great Britain, EU members) this is a normal practice. Permits (licenses) are issued by authorized bodies for certain actions: payment of legal services, delivery of humanitarian aid. Secondly, the project does not establish an obligation for sanctioned persons to declare blocked assets. Their search relies on the state, which requires additional resources. Establishing the obligation would simplify the work of the Ministry of Justice in recovering assets from state revenue and would allow businesses to identify problematic assets. This obligation is stipulated in the legislation of the USA and EU member states. This version of the draft law is not final. Amendments may be made during its consideration by deputies. I hope that the parliamentarians will finalize the draft law to the level of the legislation of the partner states of the sanctions coalition.