Practical and legal implications in Spain following the EU harmonization of enforcement and penalties for sanctions violations

On 24 April 2024, the EU adopted a new directive (Directive (EU) 2024/1226 of the European Parliament and of the Council) which establishes EU-wide rules for defining criminal offences and penalties related to the violation of EU sanctions (the "Directive"). Member States are required to implement the Directive into national law by 20 May 2025.

The Spanish sanctioning regime for the violation of EU sanctions of the EU is comparatively vague and fragmented in different laws depending on the nature of the measures.

Spanish law distinguishes between EU sanctions of a financial nature and EU sanctions of a sectoral nature. Criminal offences are only in place to punish violations of the latter, while violations of the former can only constitute administrative offences.

In our experience, the intensity of sanctions enforcement in Spain is comparatively low. Therefore, the degree of effort required for implementation in Spain can be considered high.

In detail:

The sanctioning regime for violations of EU sanctions of a financial nature is set out in Law 10/2010 of April 28, 2010 on the prevention of money laundering and the financing of terrorism ("Law 10/2010"). So far, Spanish law does not refer entirely to the Directive infringements, but only includes three types of criminal offences under the terms provided for in Article 3 of the Directive: (i) non-compliance with the obligation to freeze funds, financial assets or economic resources of listed persons; (ii) failure to comply with the prohibition to make funds, financial assets or economic resources available to listed persons; and (iii) failure to comply with obligations of communication and information to the competent authorities. (See Articles 51.2 and 52.4 of the Law 10/2010). However, there are types of conduct conspicuous by their absence in the Spanish provisions – such as the prohibitions on circumvention – and therefore the Legislator will have to make the effort to broaden its catalogue of offences in this sense and in particular to address them as criminal offences and not only as administrative offences.

Another sign of the inadequacy of the Spanish provisions regarding violations of EU sanctions is that Law 10/2010 has a subjective scope much more limited than that of the Directive (See Articles 1 and 2 of the Law 10/2010), which may undoubtedly affect the effectiveness of the sanctioning regime for EU sanctions in Spain right from its design.

On the other hand, sanctions for violations of EU sanctions of a sectoral nature are set out in Organic Law 12/1995 of December 12, 1995 for the Repression of Smuggling ("Organic Law 12/1995"). This law does include as a criminal offence the import or export of goods subject to commercial policy measures without complying with the applicable provisions in force provided that the value of the goods is equal to or exceeds EUR 150,000. However, in case the value of the goods is below EUR 150,000 or the conduct is not willful smuggling it is treated just as an administrative offence and sanctions will vary in accordance with the specific value.
Although it is clear that there is a real need for implementation in Spanish criminal law especially with regard to the catalogue and definition of offences, Spanish law has comparatively comprehensive sanctions in place to punish violations of EU sanctions. In particular, Spanish law provides sanctions for both natural and legal persons which, in addition to fines, include the prohibition to obtain subsidies and public aid to contract with public administrations and to enjoy tax or social security benefits and incentives or the foreclosure and seizure of instruments and proceeds of crime.

In conclusion the Spanish legislator will have to transpose the Directive and make an effort to tighten the Spanish criminal law with regard to EU sanctions and national authorities should become more aware of EU sanctions issues.

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