Sanctions are a powerful foreign policy tool. However, when it comes to matters of corruption, the European Union (EU) still lacks a consistent policy in order to deter individuals and larger entities from abusing their power. Nevertheless, the EU is currently working on a directive meant to strengthen its anti-corruption practices, both within Europe and beyond, to foster transparency, accountability, and sustainable economic growth. This article sheds light on the current issues faced by the EU in applying effective sanctions, nonetheless expressing optimis about the potential impact of the Union’s ongoing initiatives for improvement.
Sanctions are among the most powerful foreign policy tools that governments and international organizations can use to determine individuals, private entities, and even entire regimes to change their behavior. These restrictive measures are usually used in cases where the respective actor violates human rights, wages war, or endangers international peace and security.1 The European Union (EU) is no exception. Throughout its existence, it has implemented, either on its own initiative, or together with the UN Security Council, a number of sanctions against individuals and entities that went against its objectives and values.2
Most of the focus of the EU in terms of applying sanctions has been placed on human-rights-related issues. The best-known instances in which the EU imposed sanctions are related to violations that have occurred in Iran, North Korea, Russia, and Belarus. The restrictive measures which were imposed in these instances range from individual sanctions to economic or diplomatic measures, meant to persuade the governments to comply with their international obligations and discontinue their destructive activities.3 The EU sanctions are never punitive, and the organization makes a sustained effort not to target entire countries or the civilian population but rather specific policies or activities and those who are responsible for them, with the ultimate goal to achieve a political dialogue.4 Its measures targeting those who aid and support Russia’s aggression launched against Ukraine since the annexation of Crimea in 2014 and up to the war started in 2022 have launched an unprecedented opportunity for the EU to develop a more robust framework for sanctions, including putting in place measures to fight crimes and freezing and confiscating assets of those who are involved in the commission of crimes on but also beyond the EU territory.5
One area which necessitates a more specific sanction regime is the realm of grand corruption. Grand corruption refers to high-level corruption which involves the abuse of power by government officials or others in positions of authority. This type of corruption involves large sums of money which are, for instance, laundered, embezzled, used in acts of bribery or in various other illicit activities. As such, this type of corruption significantly impacts the economy and society of the countries affected, going as far as altering the enjoyment of human rights and weakening international cooperation.6
One of the most ambitious steps taken in this direction is the establishment of the European Public Prosecutor’s Office (EPPO) as an independent body responsible for investigating, prosecuting, and bringing to justice those who have affected the EU’s financial interests in fraudulent and corrupt ways.7 Similarly, the EU has also taken steps to address the issue of non-repatriation of funds of illicit origin. Since 1990, it has adopted six Anti-Money Laundering Directives, which require Member States to implement measures to prevent money laundering, and the financing of terrorism, also mandating banks and other financial institutions to perform due diligence and report any suspicious transactions to the responsible authorities.8 However, this is not enough to effectively combat corruption, particularly when it extends beyond the Union’s borders. So far, there is no union-wide understanding of how to proceed in terms of freezing and confiscating assets and how to use these assets in the aftermath. Moreover, as the EU does not have any competency in the realm of criminal law, it is entirely dependent on the proactivity of the member states and their willingness to implement anti-corruption measures into their own criminal code.9 Additionally, certain member states, as is the case of Hungary, constantly refuse to implement the measures agreed upon by the EU and regularly veto key priorities of the organization in order to fight corruption.10 As a result of the structural issues faced by the EU, there are many missed opportunities for sanctioning states, entities, and individuals who abuse their power. One instance of this kind is the EU’s tardy response to Vladimir Plahotniuc’s corruption and election interference allegations in Moldova. Only five-and-a-half months after the United States declared its support for countering corruption in the country,11 has the European Parliament adopted a resolution that called for sanctions against Plahotniuc.12 Thus, there are many missed opportunities for the EU to contribute to the global fight against corruption.
Going forward, the EU needs to continue to develop and refine its sanctions measures in order to maximize their effectiveness. Problems of grand corruption remain a significant challenge for the international community. Criminals persistently employ sophisticated methods to launder money and evade detection, while many countries still lack the necessary resources and expertise to effectively combat these challenges. Therefore, international cooperation is crucial in sharing information, establishing uniform legal frameworks, and developing effective enforcement mechanisms.13 Until there is uniformity in the international approaches towards grand corruption, the economic developments of many countries suffer as significant amounts of money are no longer available for local investment in business and infrastructure, impeding sustainable economic growth and affecting the lives of many people by exacerbating poverty. Moreover, the failure to tackle issues of grand corruption undermines the rule of law in the affected countries, as certain individuals or entities circumvent the legal system, and thereby erode the trust in the governments’ abilities to effectively tackle situations in which the wealthy and powerful operate outside the boundaries of the law.14 At the moment, the EU, upon a proposal of the EU Commission, is working on a directive on fighting corruption meant to cover “misappropriation, trading in influence, abuse of functions, as well as obstruction of justice and illicit enrichment related to corruption offences, beyond the more classic bribery offences”.15 Nonetheless, the true effectiveness of this directive in strengthening and changing the existing anti-corruption practices can only be gauged with time. However, there is still room for optimism regarding its potential impact in bettering practices not only in Europe but also beyond its borders.
1 Government of the Netherlands, ‘Sanctions’, <https://www.government.nl/topics/international-peace-and-security/compliance-with-international-sanctions> accessed 3 May 2023; Department of Foreign Affairs, Ireland, ‘Restrictive Measures (Sanctions)’ <https://www.dfa.ie/our-role-policies/ireland-in-the-eu/eu-restrictive-measures/> accessed 3 May 2023.
2 European Council, ‘How and when the EU adopts sanctions’, <https://www.consilium.europa.eu/en/policies/sanctions/different-types/> accessed 3 May 2023.
4 The Diplomatic Service of the European Union, ‘European Union Sanctions’ (7 October 2021) <https://www.eeas.europa.eu/eeas/european-union-sanctions_en> accessed 3 May 2023.
5 Transparency International EU, ‘Guide to Strengthening the EU’s asset recovery framework’, <https://transparency.eu/wp-content/uploads/2022/12/Asset_recovery_briefing_2022.pdf> accessed 3 May 2023.
6 United Nations Human Rights Council, ‘The negative impact of the non-repatriation of funds of illicit origin to the countries of origin on the enjoyment of human rights, and the importance of improving international cooperation’ (2019) A/HRC/RES/40/4.
7 EPPO, ‘Mission and Tasks’ <https://www.eppo.europa.eu/en/mission-and-tasks> accessed 3 May 2023.
8 Lukas Martin Landerer, ‘The Anti-Money-Laundering Directive and the ECJ’s Jurisdiction on Data Retention’ (2022) 1 eucrim <https://eucrim.eu/articles/the-anti-money-laundering-directive-and-the-ecjs-jurisdiction-on-data-retention/> accessed 3 May 2023.
9 European Commission, ‘How the EU helps Member States fight corruption’ <https://home-affairs.ec.europa.eu/policies/internal-security/corruption/how-eu-helps-member-states-fight-corruption_en> accessed 3 May 2023; Global Legal Insights, ‘Bribery and Corruption Laws and Regulations 2023 | Germany’ <https://www.globallegalinsights.com/practice-areas/bribery-and-corruption-laws-and-regulations/germany> accessed 3 May 2023.
10 Eszter Zalan, ‘EU Commission to keep Hungary’s EU funds in limbo’ (euobserver, 24 November 2022) <https://euobserver.com/rule-of-law/156464> accessed 3 May 2023.
11 Antony J. Blinken, ‘Response to Corruption and Election Interference in Moldova’ (US Department of State, 26 October 2022) <https://www.state.gov/response-to-corruption-and-election-interference-in-moldova/> accessed 3 May 2023.
12 IPN Press Agency, ‘European Parliament adopts resolution calling for sanctions against Plahotniuc and Șor’ (20 April 2023) <https://www.ipn.md/en/european-parliament-adopts-resolution-calling-for-sanctions-against-plahotniuc-a-7965_1096461.html> accessed 3 May 2023.
13 UNHRC (n 6).
14 Alina Mungiu-Pippidi, ‘The post-truth about corruption in the European Union’ (Verfassungsblog, 20 December 2022) <https://verfassungsblog.de/the-post-truth-about-corruption-in-the-european-union/> accessed 3 May 2023; Christine Lagarde, ‘There’s a reason for the lack of trust in government and business: corruption’ (The Guardian, 4 May 2018) <https://www.theguardian.com/commentisfree/2018/may/04/lack-trust-government-business-corruption-christine-lagarde-imf> accessed 3 May 2023.
15 European Commission, ‘Questions and Answers: Stronger rules to fight corruption in the EU and worldwide’ <https://ec.europa.eu/commission/presscorner/detail/en/qanda_23_2517> accessed 3 May 2023.