Criminalization of Sanctions Violations: Legal Analysis and Risks for the Ukrainian Legal System

In recent years, Ukraine’s sanctions policy has been actively evolving as a tool for responding to threats to national security and breaches of the international order. However, the issue of the clear legal status of sanctions within the national legal system remains unresolved.

State authorities have repeatedly emphasized that sanctions are not a form of legal liability in the context of criminal or administrative law. According to their position, sanctions are not a form of punishment but a special type of restrictive measure intended to influence the behavior of individuals or states that pose a threat to national interests. This approach effectively prevents the application of procedural safeguards provided under criminal or administrative legislation to sanctions.

Nonetheless, despite the declarative separation of sanctions from criminal liability, the legal nature of sanctions in Ukraine remains insufficiently regulated. There is no unified legal definition of sanctions, nor is there a clear procedure for their imposition or appeal. This leaves ample room for arbitrary interpretation and politically motivated decisions.

In this context, concern arises regarding Draft Law No. 12406, adopted by the Verkhovna Rada of Ukraine in its first reading on June 3, 2025. The bill, initiated by the President, proposes amendments to the Criminal Code of Ukraine, the Criminal Procedure Code of Ukraine, and the Law of Ukraine “On Sanctions” to establish criminal liability for violations of the sanctions regime.

Key Provisions of the Draft Law:

• Criminal liability for violation or deliberate circumvention of sanctions — a fine ranging from UAH 425,000 to UAH 2.04 million or imprisonment from 2 to 10 years;

• Mandatory disqualification from holding certain positions or engaging in certain activities for a period of 10 to 15 years;

• Property confiscation — for specific categories of offenses;

• Legal entities may be held criminally liable — through fines, confiscation of assets, or liquidation;

• Criminal liability applies not only to sanctioned individuals but also to officials, public service providers, and third parties facilitating the violation of sanctions.

At first glance, this initiative appears to be an effort to enhance the effectiveness of the sanctions mechanism. However, within the current legal framework, it poses several serious threats to the rule of law and constitutional guarantees.

Can Sanctions Be Considered a “Criminal Charge”?

According to established case law of the European Court of Human Rights, the nature of a charge (criminal or otherwise) is determined by the so-called “Engel Criteria” (Engel and Others v. the Netherlands, 1976). These include:

1. The legal classification of the offense under national law;

2. The nature of the offense — whether the act is socially dangerous or harmful to the state or society;

3. The severity of the potential penalty.

Even if the first criterion — the formal classification — does not classify sanctions as criminal under domestic law, the second and third (alternative) criteria point to the punitive and repressive nature of sanctions, qualifying them as “criminal charges” within the meaning of the European Convention on Human Rights.

Provisions of the Law “On Sanctions” Echo the Criminal Code of Ukraine

According to Paragraph 1, Part 1, Article 3 of the Law of Ukraine “On Sanctions,” the grounds for their application include actions that pose a threat to national security, support terrorist activity, violate human rights and freedoms, contribute to occupation, or cause economic damage. These grounds closely mirror the elements of offenses defined under the Criminal Code of Ukraine.

Therefore, the absence of a proper criminal-law classification of a sanctioned act — in the context of introducing criminal liability for its violation — creates a dangerous precedent of holding individuals accountable without the safeguards of criminal proceedings, particularly the presumption of innocence, adversarial procedure, and the right to defense.

Legal Uncertainty and the Risk of Arbitrariness

Introducing criminal liability for sanctions-related violations without a comprehensive legislative reform:

• Creates a legal conflict between sanctions law and criminal law;

• Increases discretionary powers of state authorities, which, in the absence of independent judicial oversight, may lead to arbitrary enforcement;

• Undermines trust in Ukraine’s legal system, particularly in the eyes of international partners.

What Should Be Done Instead?

Before introducing criminal liability for sanctions violations, lawmakers must:

1. Clearly define the legal nature of sanctions;

2. Regulate the mechanism for their imposition, appeal, and oversight;

3. Harmonize the Law “On Sanctions” with the Criminal Code and the Criminal Procedure Code of Ukraine;

4. Avoid broad interpretations of the sanctions regime without appropriate procedures and evidentiary standards.