Tetyana Khutor spoke about the draft law that would criminalize the violation and circumvention of sanctions in an interview with Hromadske Radio

On 14 January, the Verkhovna Rada of Ukraine registered a draft law that would criminalize the violation and circumvention of sanctions. The document aims to eliminate legislative gaps since 2014 and provide effective mechanisms for punishing violators of the sanctions regime. In her commentary for Hromadske Radio, Tetyana Khutor, Chair of the Institute of Legislative Ideas, stressed that the new draft law aims to create transparent conditions for bringing violators to justice.

‘This is an important step because today the circumvention of sanctions poses a serious threat to our national security. It is important to ensure accountability not only for intentional but also for negligent violations,’ said the Head of the Institute.

The draft law provides for: 

• Introduction of criminal liability for violation of sanctions, including negligent cases;
• Penalties for all persons involved in sanctions evasion, including entrepreneurs, officials, and other participants in the process;
• Creating conditions for more effective cooperation with international partners in asset tracing and recovery;
• Setting a threshold for financial violations of EUR 3,000, after which criminal liability is triggered;
• Strengthening sanctions control over the registration of companies that may be subject to restrictions;
• Introduction of mechanisms for extradition of persons evading sanctions restrictions.

The document also provides for a gradation of penalties: from fines to imprisonment for up to 10 years, depending on the severity of the violation. At the same time, liability is triggered only if a certain financial threshold is exceeded, which is in line with European standards. It is also important to note that the new law only covers violations of sanctions imposed by Ukraine. 

‘Each country independently determines what threatens its national security and makes appropriate sanctions decisions. Our law is specifically about Ukrainian sanctions,’ emphasized Tatyana Khutor.

The draft law creates new opportunities to combat sanctions evasion through re-registration schemes. According to Tatyana Khutor, previously, those who facilitated the circumvention of sanctions could avoid serious liability. For example, notaries who registered such companies were subject to only minimal fines or short-term administrative restrictions. The new draft law provides for harsher penalties for such actions. It also provides for mechanisms to control businesses that may accidentally violate sanctions restrictions. Importantly, sanctions will be applied only to violators who deliberately or recklessly circumvent the restrictions.  Tetyana Khutor emphasized that the adoption of this draft law is crucial for ensuring real control over the sanctions policy. 

‘Ukraine should not only impose sanctions but also guarantee their implementation. This is the key to strengthening the international community's trust and stabilizing the economy,’ the expert concluded.

The adoption of this law will be an important step in the fight against those who facilitate the circumvention of sanctions and will help Ukraine to increase sanctions pressure on the aggressor. It is expected that the Verkhovna Rada will soon consider this draft law, as it is defined as urgent. Read more from the interview here.