EU Seeing 'Unprecedented' Rise in Sanctions, Export Control Enforcement, Lawyer Says
European nations are seeing a sharp uptick in export control and sanctions enforcement this year, raising risks for companies doing business in the EU, said Mark Handley, a lawyer with Duane Morris.
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Handley, speaking during a virtual event this week hosted by the Sanctions Center, said data compiled by his law firm shows that European nations have successfully completed 80 sanctions or export control enforcement actions so far this year, an increase from about 50 in 2023, about 45 in 2022 and just under 20 in 2021. He also said those countries have issued more than 80 million euros, or about $85 million, worth of fines this year, more than four times the roughly 20 million euros' worth of fines issued last year.
He called this rise in enforcement “really quite remarkable and unprecedented,” noting that the U.S. Office of Foreign Assets Control, in comparison, has issued just five penalties this year for a combined $32 million in fines. If the agency doesn’t issue more penalties this year, that would rank as the lowest number of OFAC penalties in more than two decades and the lowest amount of fines since the agency issued about $23 million in combined penalties in 2020.
Handley said the increase in European enforcement is a “significant change from earlier times,” when companies “could see very little sanctions enforcement at all.”
“The number one compliance lesson to learn from all of that is that there is enforcement going on,” he said. “There is a risk that if you step on the wrong side of the law, accidentally or deliberately, that you will get caught.”
Other data compiled by the law firm shows that European nations have about 3,800 active criminal and regulatory sanctions investigations that were begun as of the beginning of 2022. Those numbers are based only on publicly available information, so “the real number may well be quite a lot higher,” Handley said. That’s “unrecognizable from any sort of figure that you would have been able to get hold of prior to 2022.”
Handley noted that he hasn’t found any public sanctions enforcement actions from four European countries dating back to 2017: Hungary, Portugal, Slovakia and Slovenia.