III Annual Sanctions Conference: ILI Project Manager Andrii Klymosiuk presented interim findings of a study on permits for sanctioned persons
Ukraine still lacks a mechanism for granting permits for actions prohibited under sanctions, despite the fact that this tool is widely used in the EU, the United States, and the United Kingdom. This was stated by ILI Project Manager Andrii Klymosiuk during the III Annual Sanctions Conference “Ukrainian Business with Russian and Sanctioned Owners: State, Challenges, Solutions.” The expert presented interim results of the project “Democratization and Integration of Sanctions Policy with the EU through the Introduction of a Permits Mechanism,” implemented with the support of the European Union and the International Renaissance Foundation.
“The absence of permits makes it impossible to use frozen assets for humanitarian needs, payment for legal assistance, protection of property rights, or minimizing harm to businesses. Because of this, Ukraine violates human rights and its European integration commitments, as was explicitly noted during the latest screening. In addition, this provokes lawsuits from sanctioned persons in international courts and creates additional risks for the effectiveness and transparency of sanctions policy,” Andrii Klymosiuk explained.
He added that the absence of a formal permits system does not mean it does not exist informally. At the same time, the development and operation of shadow mechanisms create opacity, lack of oversight, and related risks.
“These two factors not only discredit sanctions policy but also undermine trust in national security instruments, opening the door to their use as tools of political pressure or persecution,” the ILI expert noted.
Andrii Klymosiuk also emphasized the need for Ukraine to implement into its legislation provisions on criminal liability for sanctions evasion, as required by the European Commission. The rights and obligations of participants in the sanctions process must also be more clearly defined.
“Thus, the need to introduce a permits mechanism becomes particularly relevant in the context of the adoption of draft law No. 12406 on the criminalization of sanctions violations and circumvention. The document is aimed at addressing this issue, and the Institute of Legislative Ideas was involved in its development,” the expert explained.
According to him, the draft law is currently being prepared for a second reading vote. For its part, ILI is actively advocating for amendments introducing a permits mechanism.
“Systemic changes to sanctions legislation are also being developed by a dedicated working group under the relevant parliamentary committee. Therefore, the creation of a sanctions permits mechanism is already one of the key directions for the development of state sanctions policy,” Andrii Klymosiuk said.
He noted that draft law No. 12406 will establish a legal framework for a flexible sanctions mechanism. It will not violate human rights, will minimize risks of abuse, legal uncertainty, and arbitrary application of sanctions, and will bring Ukraine’s sanctions policy closer to European standards.
“Sanctions are an important tool of pressure on the aggressor state, its accomplices, and other individuals who pose threats to national security. However, their application without a flexible and transparent system of exemptions can lead to negative side effects for individuals, businesses, and society as a whole,” Andrii Klymosiuk concluded.
This publication was compiled with the support of the European Union and the International Renaissance Foundation within the framework «Whole-of-Society Accession» project. Its content is the exclusive responsibility of the authors and does not necessarily reflect the views of the European Union and the International Renaissance Foundation.