The 'proof' problem with EU sanctions — and how to fix it

One of the ways to tackle this is for the EU to adopt a strong framework of anticorruption sanctions without delay.

On 7 December 2020, the European Council adopted the EU Global Human Rights Sanctions Regime (GHRSR), a framework for targeting those involved with serious human rights violations worldwide.

The punishments include asset bans and travel freezes along the lines of the US Global Magnitsky Act.

The first recipients were Russian officials accused of human rights violations against opposition leader Alexei Navalny, Chinese entities and individuals associated with the persecution of Uyghurs in Xinjiang.

EU sanctions policies have one notable omission — they do not include corruption as an offence warranting restrictive measures.

The European Parliament has been calling for its inclusion for some time but so far in vain. As such, the EU currently risks acting as a loophole for assets to be hidden after falling foul of other jurisdictions' sanctions regimes.

It is now time for the EU to join its allies in the US, UK, Canada, and Australia in doing so and recognise that the fight against corruption is a national and global security issue as US and UK have done in recent years.

A robust framework of sanctions can remove the strands of the corrupt webs that strangle free societies. Coordinated imposition (ie multilateralisation) of sanctions enables jurisdictions to share information and coordinate actions so that the restrictive measures will have a wider impact.

It is sometimes claimed that sanctions are useless at changing behaviour and can be easily dodged. But though they may not convince actors to renounce corruption, they can help alter the calculus of kleptocrats and a joined-up global effort can further limit their operating space.

Following the Russian invasion of Ukraine, the EU notably sanctioned several Russian oligarchs with asset freezing and potential seizures.

The problem of 'proof'

Though morally justified, enacting measures due to association with the war may be problematic if proof of their involvement is difficult to evidence. A strong legal framework of anticorruption sanctions seemingly would have been equally appropriate and may have avoided potential clashes at the European Court of Justice down the line.

The EU has formed sanctions regimes to counter various threats.

In January 2019, sanctions in relation to the proliferation and use of chemical weapons were triggered after the Novichok attacks in Salisbury by Russian agents. In July 2020, Russian, Chinese, and North Korean individuals were hit by asset freezes and travel bans after several high-profile cyberwarfare incidents against the bloc. Corruption is an equally serious security threat — it destabilises economies and societies leaving them vulnerable to deprivation and unrest — and should be treated as such.

There are other benefits of an comprehensive sanctions regime, rather than the pre-existing national measures. By targeting individual wrongdoers, it grants flexibility in circumstances of political sensitivity by detaching itself from national attribution.

In October, the US Treasury targeted corrupt oligarchs trying to destabilise Moldova. If Brussels had an anticorruption sanctions framework in place it could have quickly followed suit, which would have been a powerful symbol of solidarity towards an EU candidate country.

Defining 'corruption'

The EU already has quite good anti-money laundering and counter-terrorism measures to tackle illicit money flows.

However, good legislation and effective investigations are hampered by lack of resources and capacity in the law enforcement agencies, the absence of public registers for beneficial ownership and poor coordination between government departments and the banking sector.

This is why the EU needs a strong legal framework on anti-corruption sanctions. While the offices of investigators continue to be understaffed and investigations are lengthy processes, sanctions like asset freezes can act fast to prevent capital flight.

Though urgent, this cannot be done gung-ho.

The definition of corruption must be clear and consistent with other existing regulations, like the United Nations Convention Against Corruption (UNCAC). There must be a strong evidentiary threshold to delineate between individuals, a group, or associated entity. Concerns over political bias and due process must be answered with strong safeguards consistent with upholding fundamental rights. All of this should be done in close collaboration with civil society organisations with a good track record of evidence gathering.

The first step is for Josep Borrell, the EU foreign affairs high representative, to give an official mandate to the European Council to start working on an anticorruption framework. Creating a dedicated working party within the council focusing on anticorruption matters will be a useful addition as will facilitate discussions with experts.

The sanctions unit within the European Action Service will also need beefing up in terms of capacity, financing, and human resources. The International Anti-Corruption Day on 9 December seems a highly-suitable date for this announcement to get the ball rolling.

Corruption has a corrosive impact on Western societies, chipping away at governance and the rule of law, and kleptocrats form strong transnational Hydra-like networks.

Sanctions are most effective when coordinated with other states, and a solid framework would help short circuit these networks, constrain criminals' actions, and protect the integrity of Western domestic institutions. The EU's closest allies agree, and it's now down to the council to get to work.