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Enforcement in EU 
Enforcement in the EU 
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The enforcement of EU sanctions rests with each member state. Historically, EU members were not as active as their U.S. counterpart when it comes to enforcement actions. However, in the aftermath of Russia's invasion of Ukraine in 2022, several European countries increased their efforts to implement and enforce the EU sanctions.

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 Unlike the United States and the United Kingdom, there are no dedicated bodies in the European countries which exclusively investigate potential sanctions violations and issue fines for such violations. In European countries, the prosecutors are the ones investigating the potential sanction breaches and a judge would adjudicate the matter and could issue civil or criminal penalties. This is changing as more countries are giving authority to a dedicated body to deal with sanctions. 

Here is a non-exhaustive list of bodies in charge of sanction implementation and monitoring in different European countries: 

Court
  • The Financial Sanctions Service Center of the Central Bank of Germany or Servicezentrum Finanzsanktionen der Deutschen Bundesbank is responsible for the implementation of financial sanctions in Germany. 
  • In Italy, the Financial Security Committee or Comitato di sicurezza finanziaria (CSF), which is part of the Department of the Treasury, handles the sanctions as well as subjects related to Anti-Money Laundering.
  • In the Netherlands, the Central Bank of Netherlands or de Nederlandsche Bank (DNB) is mainly in charge of sanctions-related matters. 
Here are a few examples of cases brought following the violation (or alleged violation) of EU sanctions: 
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  • At the time when the UK was part of the EU, OFSI monetary penalty imposed on Standard Chartered bank in the amount of £20.47 million (Click here)
  • Investigation of French cement company Lafarge with respect to, among other things, its potential breach of Syrian sanctions (Click here)
  • Export Control breaches of Euroturbine NV and its Bahrain-based subsidiary Euroturbine SPC for unlicensed export to Iran  (Click here)
  • Charges brought in Malta for potential breaches of sanctions against Libya (Click here) 
  • At the time when the UK was part of the EU, OFSI £10,000  monetary penalty against Raphaels Bank for breach of EU sanctions against Egypt (Click here)
Interpretation in the EU 
​The general courts of the EU Member States are responsible for the interpretation of EU law. Law relating to sanctions in the EU falls within the Common Foreign and Security Policy (CFSP) and therefore forms part of EU law. Accordingly, the general courts of the Member States have jurisdiction to interpret such law.

When the general courts of the Member States are in doubt about the interpretation or validity of EU law, they may request clarification from the Court of Justice of the European Union (CJEU). The CJEU, via a preliminary ruling, then interprets the relevant EU instrument (Decisions or Regulations in sanctions matters). In doing so, the CJEU seeks to ensure that the purpose of the instrument is achieved and takes into account the overall spirit and scheme of the Treaties.

However, it is worth noting that the jurisdiction of the CJEU to interpret EU instruments in the CFSP domain is neither straightforward nor entirely clear.

While Article 24(1) of the Treaty on European Union states:

The Union's competence in matters of common foreign and security policy shall cover all areas of foreign policy and all questions relating to the Union's security, including the progressive framing of a common defense policy that might lead to a common defense. The common foreign and security policy is subject to specific rules and procedures. It shall be defined and implemented by the European Council and the Council acting unanimously, except where the Treaties provide otherwise. The adoption of legislative acts shall be excluded. The common foreign and security policy shall be put into effect by the High Representative of the Union for Foreign Affairs and Security Policy and by Member States, in accordance with the Treaties. The specific role of the European Parliament and of the Commission in this area is defined by the Treaties. The Court of Justice of the European Union shall not have jurisdiction with respect to these provisions, with the exception of its jurisdiction to monitor compliance with Article 40 of this Treaty and to review the legality of certain decisions as provided for by the second paragraph of Article 275 of the Treaty on the Functioning of the European Union.

Article 275 of the Treaty on the Functioning of the European Union reads as follows: 

The Court of Justice of the European Union shall not have jurisdiction with respect to the provisions relating to the common foreign and security policy nor with respect to acts adopted on the basis of those provisions.

However, the Court shall have jurisdiction to monitor compliance with Article 40 of the Treaty on European Union and to rule on proceedings, brought in accordance with the conditions laid down in the fourth paragraph of Article 263 of this Treaty, reviewing the legality of decisions providing for restrictive measures against natural or legal persons adopted by the Council on the basis of Chapter 2 of Title V of the Treaty on European Union.

Reading these two articles together, one would understand that the jurisdiction of the CJEU in CFSP matters is quite limited, with sanctions being one such area. The only instances in which the CJEU may exercise jurisdiction relate to questions concerning compliance with Article 40 of the Treaty on European Union and the legality of decisions adopted by the Council providing for restrictive measures against natural or legal persons.

In a 2016 opinion, the CJEU addressed the question of its jurisdiction. In essence, the Court held that whether it has jurisdiction depends on the nature of the restrictive measure. If the measure is of general application, the CJEU lacks jurisdiction; however, if it is intended to target specific individuals, the CJEU has jurisdiction under Article 275 of the Treaty on the Functioning of the European Union.

For detailed reasoning, please refer to paragraphs 32 to 93 of the Court’s opinion.

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