Criminal offences
Under the Directive, the following conduct constitutes a criminal offence when committed intentionally and in violation of restrictive measures or a national provision implementing restrictive measures:
- making funds or economic resources available directly or indirectly to, or for the benefit of, a designated person, entity or body;
- failing to freeze funds or economic resources belonging to or owned, held or controlled by a designated person, entity or body;
- enabling designated natural persons to enter into, or transit through, the territory of a EU member state;
- entering into or continuing prohibited transactions with a third state, bodies of a third state or entities or bodies owned or controlled by a third state or by bodies of a third state;
- trading, importing, exporting, selling, purchasing, transferring, transiting or transporting prohibited goods, as well as providing brokering services, technical assistance or other services relating to those prohibited goods;
- providing prohibited financial services (e.g. financing, financial assistance, investment services, etc.);
- providing other prohibited services (e.g. legal advisory services, accounting, auditing, consulting, etc.); and
- circumventing EU restrictive measures.
In addition, inciting, aiding, and abetting the above offences is also punishable as a criminal offence.
Penalties
Under the Directive, natural persons violating EU restrictive measures are subject to one-to-five-year imprisonment as well as fines, depending on the seriousness of the offence. Legal persons may be held liable for criminal offences, committed for the benefit of the legal person, relating to the violation of EU restrictive measures if:
- such offences have been committed by any person who has a leading position within the legal person, acting either individually or as part of an organ of the legal person;
- the lack of supervision or control by a person, who has a leading position within the legal person, has made it possible for a person under its authority to commit such a criminal offence.
Furthermore, legal persons may incur a fine of up to 5% of their total worldwide turnover or EUR 40 million, depending on the criminal offence. Legal persons may also incur non-criminal penalties, such as disqualification from the practice of business activities, withdrawal of permits and authorisations to pursue activities that resulted in committing the offence, placement under judicial supervision, judicial winding-up or the closure of establishments, which have been used for committing the criminal offence.
Hungarian legislation in force and expected changes
Under Hungarian law, persons in violation of international sanctions are currently subject to a maximum fine of HUF 10 million (EUR 25,342). Furthermore, all intentional sanctions violations are qualified as criminal acts, and thus subject to penalties under Act C of 2012 on the Hungarian Criminal Code. Article 327 of the Criminal Code states that violations of international economic prohibitions are subject to penalties of between one year and five years imprisonment. Violations of arms embargoes are subject to between five years and ten years imprisonment under the same provision.
With the entry into force of the Directive, the Hungarian legislator will have to review the provisions of the Hungarian Criminal Code, and further amendments will have to be made to ensure compliance with the provisions of the Directive.
Next steps
EU member states must incorporate the Directive’s provisions into national law by 20 May 2025. The full text of the Directive is available here.
The article was co-authored by János Bálint.
For more information on how this Directive could impact your EU-based business, contact your CMS client partner or these CMS experts.
Social Media cookies collect information about you sharing information from our website via social media tools, or analytics to understand your browsing between social media tools or our Social Media campaigns and our own websites. We do this to optimise the mix of channels to provide you with our content. Details concerning the tools in use are in our privacy policy.