WorldECR (the journal of export controls and sanctions) has published the article “Anti-corruption sanctions: Is the EU to play catch-up?“, written by BenninkAmar experts Sarah Reilly, Frederik van Til and Sebastiaan Bennink.
The article discusses the potential introduction of a European anti-corruption sanctions regime. While several countries, such as the United Kingdom (“UK”) and the United States (“US”), already have a sanctions regime in place addressing corruption, the European Union (“EU”), as of yet, does not. In this context, the European Parliament has recently criticised this void, calling for an anti-corruption sanctions regime to be established. In this context, the article breaks down the applicable anti-corruption sanctions regimes in the United States and the United Kingdom, analyses the alternative options for a potential European anti-corruption sanctions regime and highlights the expected business implications for EU operators.
A few takeaways from the article:
- Integrating corruption in the EU Global Human Rights Sanctions Regime: A first option would be for the EU to integrate corruption as a ground for imposing sanctions under the EU Global Human Rights Sanctions Regime (“EU GHRSR”). Combining human rights and corruption in a single comprehensive regime would mirror the approach taken by the US in its Global Magnitsky Human Rights Accountability Act (“US Magnitsky Act”). Because the EU GHRSR only targets individuals, entities and bodies, a corrupt country could not be targeted in its entirety under the EU GHRSR.
- Introducing a standalone anti-corruption sanctions regime: Another option would be to adopt a standalone European anti-corruption regime, allowing for greater flexibility in drafting the regime and attaching more political weight to corruption as an independent sanctionable offence. In this regard, the recently adopted UK Global Anti-Corruption Sanctions Regime 2021 (“UK Anti-Corruption Sanctions Regime”) could serve as an example. However, introducing an entirely new sanctions regime exclusively dedicated to corruption could prove to be a time-consuming effort.
- Financial sanctions: The EU GHRSR, the US Magnitsky Act and the UK Anti-Corruption Sanctions Regime all include financial sanctions targeting those held responsible for corruption. Likewise, under a European anti-corruption regime, EU operators would presumably be obliged to freeze financial funds and economic resources belonging to, owned, held or controlled by a sanctioned person. In addition, EU operators would be prohibited from making funds and economic resources available to those considered responsible for corruption.
- Compliance implications for business: In case an anti-corruption regime is introduced, EU operators will be bound by more stringent compliance rules, because more entities and individuals will be likely to appear on EU sanctions lists related to corruption. EU operators will furthermore have to update their internal compliance programmes, review their screening procedures and train personnel according to the updated rules to stay compliant and ahead of the game.
If you want to read the full article and other contributions in the WorldECR issue, please click here.
Did you notice that you could use a hand with conducting screenings into your business relations or re-evaluating your internal risk rating systems? Please get in touch with the EU and US trade law specialists of BenninkAmar Advocaten. You can reach us by telephone at +31 20 308 5918 and by e-mail info@batradelaw.com.