14th EU sanctions package strengthens enforcement measures and highlights the importance of due diligence

29 Jun 2024, 42 mins ago

The 14th EU sanctions package against Russia emphasised the importance of due diligence and further enforcement of restrictive measures.

Both, individuals and entities should undertake their best efforts to ensure that their foreign subsidiaries do not violate sanctions. Measures taken shall take into consideration the nature and size of non-EU subsidiary, the degree of effective control the EU parent has over its subsidiary and other specific circumstances. It is important to highlight that due diligence obligations apply to all companies irrespective of their operations in the Russian market.

The EU reminds companies that they should consider publicly or readily available information when carrying out their due diligence. The protection against liability that is granted to companies if they did not know and had no reasonable cause to suspect that their actions would violate EU restrictive measures cannot be invoked where there is a failure to carry out appropriate due diligence. Therefore, if a company is accused of breaching EU sanctions, it cannot rely on EU protection if it has failed to carry out simple checks or inspections.

Where an individual or an entity voluntarily, completely and in due time disclose a violation of EU sanctions, national competent authorities may take the voluntary self-disclosure into account as a mitigating factor, in accordance with administrative law or other relevant national laws of member states.

The EU expects their member states to lay down the rules on penalties, including criminal penalties and take all measures necessary to ensure that they are implemented.

To increase awareness of enforcement action, it is expected that member states will report about penalties imposed for violation of EU restrictive measures.

With ever continuously increasing pressure on companies to operate with a strict compliance with sanctions legislation, we recommend reviewing your compliance programmes and systems to prevent the risk of breaches. Gherson has deep experience advising on all aspects of sanctions laws and developing sanctions and compliance programmes and will be happy to assist you in this journey.

Gherson can help you to navigate a complex set of laws and regulations and can assist in developing your company’s sanctions and compliance policies. Please do not hesitate to contact us for advice, or send us an e-mail. Don’t forget to follow us on XFacebookInstagram, or LinkedIn to stay-up-to-date.

The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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