Russian sanctions: Unpleasant criminal consequences possible!

Published on 06. October 2022

In response to the war of aggression against Ukraine, the EU has imposed far-reaching sanctions against Russia since February 2022. As is well known, these include import and export restrictions (e.g. high technology, goods for the energy, aviation and aerospace industries, dual-use goods, luxury goods, oil), capital and financial market sanctions (e.g. exclusion of various banks from the SWIFT system) and restrictive measures against individuals and organisations.

It is less well known that violations of the Russian sanctions in Austria are comprehensively threatened with judicial punishment. The restrictive measures are issued by the EU as regulations and are therefore directly effective in the member states. To make violations punishable, it is therefore sufficient for Austrian law to refer to these regulations in their respective applicable version. In this way, according to the central penal provision (Section 79 of the Foreign Trade and Payments Act), intentional sanctions violations can be punished with imprisonment of up to 3 years; if the perpetrator acts commercially or through deception (e.g. forged documents), he or she may even be imprisoned for up to 5 years.

But be careful! Even those who only negligently violate the Russia embargo, for example by not familiarising themselves with the relevant regulations, even though obliged to do so under the circumstances (e.g. sale of luxury goods worth more than EUR 300 each for use in Russia), can be imprisoned for up to 1 year or fined (Section 79 para 3 Foreign Trade and Payments Act).

If the perpetrator is a decision-maker or employee of a company, the company would also be subject to a corporate fine (Section 3 of the Act on Corporate Criminal Liability).

The Russian sanctions are mainly regulated in Regulations 833/2014/EU (sectoral measures) and 269/2014/EU (lists of persons). These two basic regulations are frequently supplemented and updated by amending and implementing regulations. In addition, there are accompanying regulations such as the sanctions against the Republics of Luhansk and Donetsk (Regulation 263/2022/EU) and the Republic of Crimea (Regulation 692/2014/EU). As a result, the Russian sanctions constitute an extremely complex, constantly changing legal matter.

If the law enforcement authorities learn of a suspected violation of the embargo (e.g. through the seizure of registered goods during export at the border or an anonymous report), they must initiate an investigation ex officio (Section 2 para 1 Code of Criminal Procedure). Even the initiation of preliminary proceedings is extremely unpleasant for the persons and companies concerned. They have to justify themselves and spend time and money on doing so. In addition to being questioned as the accused, in the worst case, coercive measures such as a house search or even an indictment in court are threatened. In recent months, criminal proceedings on suspicion of violating the Russia sanctions have increased.

Against this background, the utmost care is advised. Companies with business contacts to Russia or with Russian customers must comprehensively integrate the Russian sanctions into their internal compliance programme, continuously analyse specific risks, implement appropriate technical, organisational and personnel measures (e.g. review of the legal situation, use of auditing software, process organisation, internal directives, training) and monitor the implementation of these measures.

In this way, sanctions violations can be prevented and, in the event of criminal proceedings, companies can document that all necessary and reasonable measures had been taken to prevent sanctions violations. This documentation can be decisive in convincing the public prosecutor's office to discontinue an ongoing investigation without indictment (Sections 190, 191 Code of Criminal Procedure).