Liability for circumventing EU sanctions should extend not only to direct violators, but also to the entire chain of involved individuals and companies, including intermediaries and entities from third countries, if their culpability and awareness are clearly established.
This was stated in a comment to Guildhall by Karolis Neimantas, a member of the Lithuanian Seimas.
According to the Lithuanian side, “liability should extend to the entire chain of related individuals and companies, but with clearly defined thresholds of culpability.” It was emphasized that “an effective sanctions regime is impossible if liability is limited only to direct violators,” since in practice “sanctions circumvention is most often carried out through multi-layered structures involving intermediaries, financial instruments, and jurisdictions of third countries.”
At the same time, as noted, “the principles of proportionality and legal certainty must be preserved” when such liability is expanded. In particular, “liability should be linked to a breach of due diligence obligations or to intentional participation,” while “entities that have carried out all reasonable verification procedures should not automatically be subject to criminal prosecution.”
It is also emphasized that “clear guidance is needed as to what the standard ‘knew or should have known’ means, in order to avoid legal uncertainty.” Overall, according to the position of the Lithuanian side, “expanding the chain of liability is necessary, but it must be based on clear criteria of culpability, awareness, and breach of obligations; otherwise, there is a risk of both overregulation and selective enforcement.”
Earlier, members of the European Parliament proposed creating a single EU prosecutor for investigations into sanctions circumvention. Czech MEP Markéta Gregorová stated that national prosecutors often lack resources and specialized units, while sanctions circumvention cases themselves are complicated by the need to prove intent and collect evidence in third countries.
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