In the near future, the Verkhovna Rada of Ukraine may adopt as a whole the draft law No. 12406, which should become a key step in strengthening the state's sanctions policy
Thanks to the joint efforts of Ukraine and its partners, sanctions have become a key tool for putting pressure on the aggressor. Draft law No. 12406, adopted in the first reading, has created the basis for effective prosecution of sanctions violations and adaptation to EU Directive 2024/1226. This draft law is the result of a year of work by more than 10 state bodies and the non-governmental sector. With some minor amendments in Parliament, the draft law could have fully taken into account the requirements of the recently adopted EU Directive and best international practices.
However, during the revision process prior to the second reading, amendments were made to the document that significantly reduce its effectiveness and contradict Ukraine's international obligations (for more details, see here):
- Liability is established only for intentional non-compliance or obstruction of sanctions, whereas the previous version provided for liability for negligent violations of sanctions (amendment No. 26).
EU Directive 2024/1226 in Part 3 of Article 3 clearly states that ‘Member States shall ensure that the acts listed in point (e) of paragraph 1 of this Article also constitute a criminal offence when committed with serious negligence’, and §4 of the preamble states that ‘Certain conduct should constitute a criminal offence even if committed with serious negligence.’
Thus, the proposed approach would directly contradict the EU Directive. Finally, the absence of criminal liability for negligent violations of sanctions will significantly complicate the burden of proof and make Ukrainian legislation one of the weakest among partner countries. After all, negligence is criminalised in Germany, Austria, Sweden, Denmark, Croatia, Norway, Switzerland and Lithuania.
- This creates a loophole for the withdrawal of assets of sanctioned persons with the help of lawyers (amendment No. 363).
It is proposed to supplement the Law with an ‘exception’ from sanctions, which will apply to the conclusion and execution of a contract for the provision of legal assistance to a person subject to sanctions, while the procedure for payment for such services and the method of calculating the amount of remuneration for lawyers will be established at the sub-legislative level. In general, such changes are necessary in the context of ensuring the right of individuals to professional legal assistance, but it should be explicitly stated that the ‘exception’ applies only to services that correspond to a specified amount of remuneration. If the lawyer's fee exceeds this amount, it should be classified as a violation of sanctions.
- In its current version, the draft law does not provide for a system of exemptions from sanctions, except in cases of legal aid. This contradicts the approach of the EU, the US, the UK and other countries in the sanctions coalition, where such a system is standard. The absence of permits:
- violates the requirements of the EU acquis (as noted in the screening reports),
- creates risks for human rights (medicine, education, livelihood, etc.),
- threatens Ukraine's reputation and leads to potential ECHR decisions not in its favour.
Currently, permits are effectively issued by changing sanctions (e.g. the case of Freedom Finance Ukraine). A transparent and regulated procedure would prevent abuse and make the sanctions policy flexible, predictable and consistent with security and economic interests.
This issue could be partially resolved by taking into account amendments 405, 407 and 408, which exclude liability for circumventing sanctions provided that permission has been obtained. However, the Committee rejected these amendments.
In view of the above, Ukrainian civil society organisations call on the Verkhovna Rada of Ukraine not to support amendments 26 and 363 in the vote on individual articles, to take into account amendments 405, 407 and 408 to draft law 12406, in order to strengthen the state sanctions policy, bring it into line with EU approaches and increase pressure on those who aid and abet aggression!
Signatories:
- Analytical Center Institute of Legislative Ideas
- Economic Security Council of Ukraine
- Center for Global Studies Strategy XXI
- NGO Ukrainian Analytical Center U8
- NGO Razom We Stand
- NGO Anti-Corruption Headquarters
- Analytical Center State Watch
- Transparency International Ukraine
- NGO Liberal Democratic League of Ukraine
- Kharkiv Anti-Corruption Centre
- Regional Human Rights Centre
- Independent anti-corruption commission (NAKO)
For more details on all the risks of draft law No. 12406 and recommendations for its improvement, please see the analytical note.