A new era of regulating EU sanctions compliance: a fragmented framework

The EU has introduced explicit compliance obligations in its 14th Russia sanctions package, marking a shift from just prohibiting certain economic activities to also mandating how businesses must ensure compliance. Previously, operators had to adhere to sanctions but were not given clear regulatory requirements on implementation within the regulations. The evolving framework extends beyond sanctions regulations to broader EU legislation, including anti-money laundering (AML), instant payments, and crypto-asset transactions. This fragmented approach risks resulting in overlapping yet incomplete obligations, uncertainty, and administrative complexity. Financial institutions face multiple layers of compliance rules, while other sectors remain underregulated. The article examines these regulatory developments, their scope and their impact on businesses. To improve enforcement and prevent circumvention, a more unified EU compliance framework is necessary. A risk-based, harmonised appr...

Verder in dit artikel:

1. Introduction

2. Why regulating sanctions compliance is necessary

3. Key regulatory developments and their applicability

3.1. Transfer of funds regulation and EBA guidelines

3.2. Two EBA guidelines

3.3. Targeted financial sanctions in the AML-package

3.4. Instant Payments Regulation and Commission clarification

3.5. Best efforts and due diligence requirements in the 14th Russia sanction package

3.6. An overview of sanctions compliance rules

4. How to proceed regulating the sanction compliance framework

5. Conclusion