The ‘proof’ problem with EU sanctions and how to fix it

EU Commission President Ursula von der Leyen announced that corruption offenses would be included in the EU sanctions regime, during her State of the Union address in September 2022. That announcement was welcomed and it was expected long overdue.

One of the ways to address this is for the EU to adopt a robust anti-corruption sanctions framework without delay.

On December 7, 2020, the European Council adopted the EU’s Global Human Rights Sanctions Regime (GHRSR), a framework for targeting people involved in serious human rights violations around the world.

Punishments include asset bans and travel freezes along the lines of the US Global Magnitsky Act.

The first recipients were Russian officials accused of human rights violations against opposition leader Alexei Navalny, Chinese entities, and people associated with the persecution of Uyghurs in Xinjiang.

EU sanctions policies have a notable omission: they do not include corruption as a crime that justifies restrictive measures.

The European Parliament has been calling for its inclusion for some time, but so far to no avail. As such, the EU currently risks acting as a loophole to hide assets after breaching the sanctions regimes of other jurisdictions.

Now is the time for the EU to join its allies in the US, UK, Canada and Australia in doing so and recognizing that the fight against corruption is a national and global security issue, as they have the US and the UK in recent years.

A robust sanctions framework can remove the strings of corrupt networks that strangle free societies. The coordinated imposition (ie, multilateralization) of sanctions allows jurisdictions to share information and coordinate actions so that restrictive measures have a broader impact.

Sanctions are sometimes claimed to be useless in changing behavior and easily circumvented. But while they may not persuade actors to renounce corruption, they can help upset the kleptocrats’ calculus, and a joint global effort may further limit their operating space.

Following the Russian invasion of Ukraine, the EU sanctioned several Russian oligarchs in particular with asset freezes and possible seizures.

The ‘proof’ problem

Although morally justified, the enactment of measures due to association with war can be problematic if proof of their involvement is difficult to prove. Apparently, a strong legal framework of anti-corruption sanctions would have been equally appropriate and could have prevented possible confrontations in the European Court of Justice in the future.

The EU has created sanctions regimes to counter various threats.

Sanctions in relation to the proliferation and use of chemical weapons were activated in January 2019 following the Novichok attacks in Salisbury by Russian agents. In July 2020, Russian, Chinese, and North Korean individuals were hit with asset freezes and travel bans after several high-profile cyberwarfare incidents against the bloc. Corruption is an equally serious security threat: it destabilizes economies and societies, leaving them vulnerable to deprivation and unrest, and must be treated as such.

There are other benefits of a comprehensive sanctions regime, rather than pre-existing national measures. By focusing on individual wrongdoers, it provides flexibility in politically sensitive circumstances by disassociating itself from national attribution.

In October, the US Treasury Department attacked corrupt oligarchs trying to destabilize Moldova. Had Brussels put in place an anti-corruption sanctions framework, it could have quickly done the same, which would have been a powerful symbol of solidarity towards an EU candidate country.

Definition of ‘corruption’

The EU already has quite good anti-money laundering and anti-terrorism measures in place to deal with illicit money flows.

However, good legislation and effective investigations are hampered by a lack of resources and capacity in law enforcement agencies, the absence of public registries of beneficial owners, and poor coordination between government departments and the banking sector. .

This is why the EU needs a strong legal framework on anti-corruption sanctions. While investigators’ offices remain understaffed and investigations are lengthy processes, sanctions such as asset freezes can act quickly to prevent capital flight.

Although urgent, this cannot be done enthusiastically.

The definition of corruption must be clear and consistent with other existing standards, such as the United Nations Convention against Corruption (UNCAC). There must be a strong evidentiary threshold to delineate between individuals, a group or an associated entity. Concerns about political bias and due process must be answered with strong guarantees compatible with the defense of fundamental rights. All of this needs to be done in close collaboration with civil society organizations with a good record of collecting evidence.

The first step is for Josep Borrell, the EU’s high representative for foreign affairs, to give an official mandate to the European Council to start working on an anti-corruption framework. The creation of a dedicated working group within the council that focuses on anti-corruption issues will be a useful addition, as it will facilitate discussions with experts.

The sanctions unit within the European Action Service will also need to be strengthened in terms of capacity, funding and human resources. International Anti-Corruption Day, December 9, seems like a very suitable date for this announcement to go live.

Corruption has a corrosive impact on Western societies, undermining governance and the rule of law, and kleptocrats form strong transnational Hydra-like networks.

Sanctions are most effective when coordinated with other states, and a strong framework would help short-circuit these networks, restrict the actions of criminals, and protect the integrity of Western national institutions. The EU’s closest allies agree, and now it’s up to the council to get to work.

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