Draft law on sanctions: business joined the discussion

On January 29, 2025, the European Business Association hosted a discussion of the new draft law on establishing liability for violation of sanctions, which was attended by Deputy Minister of Justice of Ukraine Inna Bohatykh and representatives of the Sanctions Policy Department of the Ministry of Justice of Ukraine.

The discussion focused on the analysis of the draft law No. 12406 dated 14.01.2025 "On Amendments to the Criminal Code of Ukraine and the Criminal Procedure Code of Ukraine and the Law of Ukraine "On Sanctions" regarding the establishment of liability for violation of special economic and other restrictive measures (sanctions)", introduced by the President of Ukraine as an urgent one.

The draft law provides for liability for violation and circumvention of sanctions (two forms of the objective side of the crime), the subjective side is characterized by both intentional and negligent forms of guilt, and the value threshold for criminalization is about UAH 152 thousand.

The participants of the event included representatives of large businesses, banking institutions, and leading law firms, which demonstrates the high interest in the legislative initiative and its importance for our society, as the establishment of criminal liability for such socially dangerous acts is a long-overdue step for the effectiveness of sanctions policy.

For the business community, it means strengthening sanctions compliance, detailed and thorough checks of their clients/contractors.

Therefore, the discussion raised many practical issues regarding the application of the draft law, which made the discussion deeply professional and useful from a law enforcement perspective.

During the presentation of the draft law, Inna Bohatykh emphasized that liability for violation of sanctions has been introduced in most European Union countries: criminal liability in the Republic of Cyprus, Denmark, France, Hungary, administrative liability in Slovakia, Spain, criminal and administrative liability in Belgium, Austria, Czech Republic, Estonia, Greece, Ireland, Lithuania, Poland). Criminal liability is also provided for in the United States, the United Kingdom, Canada, Norway, Bosnia and Herzegovina, Switzerland, Japan, and Australia.

In order to unify the approaches of the EU countries to sanctions violations, EU Directive 2024/1226 on the definition of criminal offenses and penalties for circumvention of sanctions was adopted on April 24, 2024. Countries have 1 year to implement it into national legislation.

Tetyana Khutor, Head of the Institute of Legislative Ideas, outlined the structure of the draft law, the content of the new article of the Criminal Code of Ukraine, the difference between violation and circumvention of sanctions, and drew attention to such features as forms of guilt and types of liability for violation and/or intentional circumvention of sanctions.

A representative of the European Business Association noted that Ukrainian business does not deny the need to introduce criminal liability for violation of sanctions restrictions, but will have certain proposals to the text of the draft law to make its provisions more specific.

Following the discussion of the legislative initiative, the participants of the meeting concluded that it is necessary to increase the effectiveness of restrictive measures in order to establish proportionate liability for circumvention and violation of sanctions. The business community is currently preparing its proposals for further consideration.