Intensification of the enforcement of EU and UN restrictive measures

Law 97/2017 now expressly provides for a concept of obliged entities, which corresponds to entities subject to the Anti-Money Laundering and Terrorist Financing (Law No. 83/2017, of 18 August).

In addition to the conduct already described in the original version of Law 97/2017, penalties are now imposed on anyone who, in violation of a restrictive measure:

• Fails to comply with the freezing of funds or economic resources;
•  Enters into or continues transactions with a third State, or bodies of a third State, including the award or continued execution of public or concessions contracts;
• Trades, including transiting or transporting goods and technical assistance or other services related to those goods;
• Provides financial services or performes financial activities or provides any other services prohibited by a restrictive measure.

Penalties are now also imposed on anyone who carries out certain acts with the intention of preventing the effects of a restrictive measure. These acts include:

• Using funds/economic resources of a sanctioned person/entity that should be frozen under restrictive measures with a view to concealing them; and
• Providing false or misleading information to conceal the fact that a sanctioned person/entity/body is the owner or ultimate beneficiary of funds/economic resources to be frozen under a restrictive measure.

• In the case of trade involving products included in the Common Military List of the European Union or dual-use items listed in Annex I and IV to Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021, the conduct (which was punishable by imprisonment from 1 up to 5 years) shall now be punishable by imprisonment from 5 up to 8 years, regardless of the value of the items concerned;
• In the case of negligence, the conduct (which was punishable by a fine of up to 600 days) is now punishable by imprisonment from 6 months up to 2 years and 6 months;
• Violation of restrictive measures perpetrated by legal persons (which was punishable by a maximum fine of 600 days, or a maximum of 6 million euros) will now be punishable by a fine of up to 5% of their total worldwide turnover in the financial year immediately preceding the offence (if this turnover cannot be determined, certain offences may be punishable by a fine of up to 40 million euros).

• Aggravated offences: more severe penalties for perpetrators who are officials or who have committed the acts as part of a criminal organisation;
• Mitigating circumstances: active cooperation by the perpetrator until the conclusion of the trial.

Natural persons who report violations of restrictive measures are entitledto the whistleblowers’ protection regime provided for in Law No. 93/2021 of 20 December. 

• Exemption of lawyers and solicitors from the duty to report violations of restrictive measures when acting in legal consultation or in the defence/representation of clients.

•  Introduction of a humanitarian aid clause, which excludes the unlawfulness of acts classified as offences when carried out in the context of humanitarian assistance for persons in need or activities in support of basic human needs, provided in accordance with the the principles of impartiality, humanity, neutrality and independence and, where applicable, international humanitarian law.

The investigation of crimes related to the violation of restrictive measures now benefits from a special regime for the collection of evidence, the breach of professional secrecy, and the forfeiture of assets to the State, usually reserved for investigating more serious and/or complex crimes.

The RAR recommends the creation of specialised units within the security forces and services and the Public Prosecution Office to investigate and prosecute offences relating to the violation of restrictive measures, as well as the articulation, coordination and cooperation of the entities responsible for supervision and enforcement of compliance under with Law 97/2017.

The RAR recommends strengthening the compliance and reporting duties of financial and non-financial entities, particularly for banking, insurance, transport, energy, port operators, and sectors exposed to international trade chains.