EU Sanctions Enforcement in the Netherlands: An Assessment of Enforcement Strategies in View of the Dutch Guidelines on Self-Reporting and the EU Directive on the Criminalisation of Sanctions Violations

Introduction

Since the start of Russia’s invasion of Ukraine in 2022, the EU has adopted a wide range of sanctions targeting individuals, entities and entire sectors, with the aim of disincentivising Russia’s continued war efforts. While these sanctions are adopted unanimously by all EU member states, their enforcement remains largely the responsibility of the member states themselves. While initiatives such as co-operation between national enforcement bodies and Eurojust and Europol are well under way, the current decentralised enforcement model presents several challenges. These include limited co-ordination between national enforcement bodies and the risk of a fragmented approach, where similar violations are met with differing penalties depending on the jurisdiction. This “enforcement patchwork” may undermine the overall effectiveness of the sanctions regime.

A further key question is whether sanctions violations are being actively investigated and prosecuted across member states and, if so, to what extent. It also remains to be seen how and if individuals or entities under investigation can benefit from co-operating with national competent authorities, and how such co-operation is assessed across different legal systems. In 2024, the EU adopted Directive (EU) 2024/1226, which aims to address these questions by harmonising the enforcement of sanctions violations. This initiative is intended to support a more uniform approach to the enforcement of EU sanctions legislation, and to enhance co-ordination across the EU. In parallel, the Dutch government has published guidelines on voluntary self-disclosure in relation to criminal offences, including sanctions violations.

This article will examine both developments in turn. It will also analyse how the EU Directive and the Dutch guidelines may (or may not) complement one another, and what this means for the national enforcement of EU sanctions violations in the Netherlands.

EU Directive

On 24 April 2024, the European Parliament and the Council adopted Directive 2024/1226 on the definition of criminal offences and penalties for the violation of EU restrictive measures (the “Directive”). In this section, the authors will first outline the preparatory work that enabled the EU to legislate on the definition of criminal offences related to sanctions violations, before analysing the key provisions of the Directive itself.

The EU took the initial step of defining violations of EU sanctions measures as criminal offences falling within its legislative competence under Article 83(1) of the Treaty on the Functioning of the European Union (TFEU) through Council Decision 2022/2332. This is a significant decision because the crimes already covered under this competence include serious cross-border offences such as terrorism, human trafficking, sexual exploitation of women and children and illicit drug trafficking. Including sanctions violations alongside these crimes highlights the importance the EU places on enforcing sanctions, especially in the current political climate.

Once a criminal offence is established as falling within the EU’s legislative competency, the EU can establish minimum rules concerning the definition of the criminal offences and the related penalties for violations. Article 82(2) of the TFEU provides that minimum rules are to take into account the “differences in the legal traditions and systems of the Member States”. Specifically, such minimum rules are to concern:

• mutual admissibility of evidence between member states;
• the rights of individuals in criminal procedure;
• the rights of victims of crime; and
• any other specific aspects of criminal procedure that the Council has identified in advance by a decision; for the adoption of such a decision, the Council shall act unanimously after obtaining the consent of the European Parliament.

Member states are, of course, within their right to exercise their national discretion and build upon the minimum rules in their own legislation, at least in the field of procedural criminal law. However, they must remain cognisant of the fact that the minimum rules are established with the goal of facilitating mutual recognition and cross-border co-operation in criminal matters. As such, member states, in establishing national provisions, must ensure that such provisions remain in line with the objectives established by the EU.

Returning to Directive 2024/1226, it essentially establishes a comprehensive minimum harmonised framework criminalising sanctions violations and establishing accomplice liability. The Directive also sets out minimum penalties for both natural and legal persons in Articles 5 and 7, along with scenarios pertaining to aggravating and mitigating factors in Articles 8 and 9. Furthermore, it outlines investigative powers and expectations regarding co-ordination between authorities. Below, the authors will briefly discuss each of these aspects in turn.

In Article 13, the Directive explicitly allows member states authorities’ to, where appropriate, use tools that are typically used as part of serious criminal investigations such as wiretapping, surveillance and financial tracking. This is notable as the suggestion that such tools may be proportionate in certain circumstances demonstrates how serious it believes sanctions violations are in light of the foreign policy objectives set by the EU.

Notably, in Article 15, the EU legislates that member states should increase the co-ordination between their respective enforcement bodies, Europol, Eurojust and the European Public Prosecutor’s Office. In Recital 35, it argues that this is to ensure effective investigation and prosecution. This is understandable as sanctions violations may involve activities and entities across multiple member states.

The Directive allows member states to derogate from defining some conduct as a criminal offence when the goods or services involved have a value of less than EUR10,000. This discretion applies to six types of conduct, as defined in Article 3, paragraph 1 of the Directive, which include, among others: making funds or economic resources available to a designated person or entity; failing to freeze funds or economic resources belonging to or owned by a designated person or entity; and breaching or failing to fulfil conditions under authorisations granted by competent authorities to carry out certain activities. This framework allows member states to establish a severity threshold when defining specific criminal violations of sanctions measures, whereby conduct involving funds, economic resources, goods or services valued below EUR10,000 may be excluded from criminal liability.

Under Article 9, the Directive also provides for member states to implement structures that allow mitigating factors to be taken into consideration specifically in instances in which the offender provides the national authorities with information that they would otherwise not have been able to obtain. The obligation to provide for voluntary self-disclosure is not explicitly mentioned in the Directive. This is likely in consideration of national legal rules in respect of criminal investigations. For instance, while self-reporting for regulatory offences pertaining to sanctions was previously possible in Germany, this avenue is not available to criminal offences under German law.

National enforcement in view of the EU Directive

In determining criminal offences for sanctions violations, each member state is now subject to harmonisation requirements under the Directive, while retaining the discretion to implement a severity threshold. For example, under current French law – as set out in Article 459 of the Code des douanes (Customs Code) and Article L.574-3 of the Code monétaire et financier (Monetary and Financial Code) – there is no severity threshold excluding certain conduct from criminal liability based on the monetary or economic value involved. Furthermore, Directive No 2025-470 of 28 May 2025, which transposes the Directive into French law, does not adopt the severity threshold option provided under the Directive.

Insofar as German law is concerned, most of the violations outlined in the Directive have already been implemented in the Außenwirtschaftsgesetz (Foreign Trade and Payments Act). Nevertheless, a number of amendments are required. This includes implementing the provision of technical assistance, legal services, accounting and tax services in violation of EU sanctions as a criminal offence. In addition, circumvention of EU sanctions is now to be regarded as a crime. This also concerns the violation of the best-efforts obligation, which previously was defined as a misdemeanour under German law. Violations with respect to military and dual-use items under paragraph 19 are also to be regarded as criminal offences. The maximum fines to be imposed against legal entities need to be adjusted as well. Pursuant to the Ordnungswidrigkeitengesetz (Act on Regulatory Offences), the maximum is currently set at EUR10 million. According to the Directive, it is up to the German legislation whether to make the fine contingent on the global turnover of the company concerned or whether to set a maximum penalty of EUR40 million.

German law, similarly to French law, does not set any severity thresholds for violations of sanctions. As the Directive has not yet been transposed into German law, it remains to be seen whether national legislators there will make use of the severity threshold provision.

On 28 April 2025, the Dutch Minister of Justice and Security announced the publication of the implementation of Directive 2024/1226 into Dutch legislation. No substantive changes were needed to implement the Directive into Dutch law.

In brief, the requirement to establish criminal offences for violations of EU sanctions, as set out in the Directive, has already been met by the Dutch Economic Offences Act. Similarly, the definitions in Article 2 of the Directive are already reflected in the Dutch Sanctions Act 1977. The Directive does not require member states to replicate these definitions verbatim in their national legislation.

According to the Dutch transposition announcement, the Directive’s exemptions from criminal liability for humanitarian assistance – provided in accordance with the principles of impartiality, humanity, neutrality and independence – are already incorporated into the Sanctions Act 1977. Similarly, regarding penalties applicable to natural persons, while the Directive mandates prison terms for violations involving amounts exceeding EUR100,000, Dutch law already provides for imprisonment for sanctions violations, with a maximum sentence of six years’ imprisonment or a fine of up to EUR1,030,000.

Meanwhile, for legal entities, the Dutch legislation already included the ability to hold legal persons liable for sanctions violations, as well as providing judges with the possibility to impose certain penalties such as a fine amounting to 10% of annual turnover or the dissolution of the entity, which exceeded the minimum fine of 1% or 5% (depending on the type of violation) of annual turnover set by the Directive.

Whilst the Directive provided the option for member states not to criminalise conduct for certain violations involving goods or resources with a maximum value of less than EUR10,000, the Dutch legislation does not include this.

Finally, the Dutch limitation period for sanctions violations already far surpasses the five-year minimum required by the Directive, at 12 years. All other articles of the Directive not directly mentioned here were also deemed to be in accordance with existing Dutch legislation.

Dutch sanctions enforcement: the Damen investigation

In terms of violations of EU sanctions, enforcement has become more prominent in the Netherlands. Importantly, the Dutch Public Prosecution Service retains discretion particularly with regard to the severity and intentionality of any offence. The Dutch authorities recognise their role in the enforcement of EU sanctions given the country’s economic position in terms of its major port, and its popularity when it comes to establishing holding companies.

The Dutch Public Prosecution Service’s announcement in April 2025, in which they disclosed the criminal prosecution of Dutch shipbuilder Damen, was seen as a significant development. The allegations concerned, among other things, a violation of the Sanctions Act 1977 over a period of several months in the second half of 2022. The investigation concerns goods and technology that are said to be contributing to the military and technological strengthening of Russia, and to the development of its defence and security sector.

Other allegations of sanctions violations were brought to light in an investigation by the Dutch public broadcaster in December 2024. Here, it was reported that European parts for a shipbuilding project called Project 5712, designed by Damen before the start of the war, ended up in Russia despite the sanctions in place. According to news reports, shipyards in Russia managed to obtain these parts via entities in Turkey and Hong Kong, and at least some of the parts appear to have come from Damen itself. The news report further noted that many of the Harmonized System (HS) codes for products sent fell under Article 3 of Council Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions in destabilising the situation in Ukraine. Its review of the Russian import databases indicated that many products for Project 5712 remained the same both before and after the implementation of the relevant sanctions, and only the shipper changed. The Dutch Public Prosecution Service announced that the criminal case will likely be initiated in the second half of 2025 with a pre-trial hearing. Seeing that the Dutch Public Prosecution Service approaches investigations into sanctions violations fairly rigorously at this stage after many rounds of EU sanctions packages and continued efforts to close remaining loopholes, companies may be incentivised to self-report in order to avoid steep fines and reputational damage.

Dutch Guidelines

On 22 November 2024, the Dutch Public Prosecution Service introduced guidelines for self-reporting, co-operation and self-investigation in cases of criminal offences (the “Guidelines”) which came into effect on 1 January 2025.

According to the Dutch Public Prosecution Service, the motivation for the Guidelines lies in the “great value” that self-reporting can bring in the detection and prosecution of criminal offences. It is also acknowledged that self-reporting allows for criminal offences to come to light that might have otherwise remained undetected, and that co-operation between the reporting party and the Dutch Public Prosecution Service can, for instance, improve the quality of available information and the efficiency of any investigation conducted. It is further explained that better insight into the unlawful conduct may also aid the prevention of similar criminal offences from being committed within the sector in question.

The justification of the Guidelines reflects the practical approach with which the Dutch Public Prosecution Service approaches investigations of economic financial criminal offences. In view of the fact that these sorts of crimes often indeed go undetected, the Dutch Public Prosecution Service offers an incentive for legal entities to come forward in exchange for the possibility of a reduced sentence. The Guidelines provides instructions on self-reporting, co-operation in a criminal investigation and self-investigation.

If the Dutch Public Prosecution Service considers that self-reporting significantly contributes to the investigation and prosecution, the Dutch Public Prosecution Service may apply a fine reduction of up to 25%. The conditions that must be met to qualify for (part of) the penalty reduction include:

• a complete, clear, and structured written report; and
• full submission of all available data and (source) documents concerning the persons involved, all potential criminal offences, and any (in)direct damages and unlawful profits.

An additional 25% reduction may apply if they fully co-operate with an investigation. Conducting a thorough self-investigation may further support mitigating any punishments, although this will not lead to additional reductions beyond those described above.

With respect to the requirements for qualifying for a fine reduction in connection with co-operation in criminal investigations, the Public Prosecution Service expects nothing less than full co-operation. This entails voluntary, complete and prompt co-operation, demonstrated through a proactive attitude. The Guidelines provide a non-exhaustive list of requirements, which include, for example:

• timely submission of all relevant data – both domestic and foreign – to the Public Prosecution Service, without request; and
• ensuring the availability of current and former employees for questioning, without unnecessarily informing them of the investigation.

In addition to the criminal investigation by the authorities, a legal entity may, prior to, during or immediately after the self-reporting, conduct a self-investigation. The aspects that the Public Prosecution Service will consider include, among others, the contribution of the self-investigation to the overall criminal investigation.

This policy is not a formal “amnesty” regime, and Dutch legislation does not formally provide for a non-prosecution agreement; but in practice, the Dutch Public Prosecution Service may consider entering into settlements or deals (a so-called strafbeschikking) with companies that wish to self-disclose. The Guidelines provide companies with a general understanding of the expectations of the Dutch Public Prosecution Service and the factors it may consider when determining eligibility for a penalty reduction. Although the Guidelines are intended to provide practical instructions for companies on self-reporting, co-operation and self-investigation, it is important to recognise the inherent ambiguity and the high standards they set.

Firstly, the requirements relating to self-reporting, co-operation and self-investigation – and their influence on penalty reduction – are expressed using relatively ambiguous and flexible language. For example, the Guidelines require the legal entity to submit data and (source) documents “relevant to” the criminal investigation, including “all (other indications of) possible” suspected criminal offences. Terms such as “data and (source) documents”, “relevant to” and “all possible criminal offences” lack sufficient clarity and specificity, making it unclear what is precisely expected of the legal entity involved.

Secondly, there is no certainty or clarity regarding whether, and to what extent, self-reporting, co-operation and self-investigation will influence the final penalty to be set. Throughout the Guidelines, it is merely stated that the Public Prosecution Service “may” apply a fine reduction and may refrain from granting any reduction if, in its view, the conditions have not been sufficiently met. This approach does not provide legal entities with a reasonable basis to assess how their co-operation may translate into a penalty reduction. Similarly, a clearly defined starting point for calculating any fines is also not provided. In contrast, violations under US law clearly spell out how fines are to be calculated.

Lastly, the requirements for self-reporting, co-operation and self-investigation are admittedly high and comprehensive for legal entities. The Public Prosecution Service expects nothing less than a voluntary, complete, clear and structured written report. Co-operation entails providing all relevant data – both domestic and international – including any available underlying documentation, as well as making all relevant employees and, where possible, former employees from both home and abroad available for questioning. This can impose significant costs on legal entities, particularly in the absence of clear practical and operational guidance. Additionally, the issue of self-incrimination is not discussed. Further, current and former employees being entangled in such an investigation could have far-reaching effects within a company’s environment without clear guidance and safeguards.

Trends and conclusion

The Dutch Public Prosecution Service and other bodies have been fairly proactive in terms of sanctions enforcement. The Dutch Public Prosecution Service has previously announced that it would make the enforcement of EU sanctions a priority. In multiple proceedings, it requested that prison sentences should be imposed while also requesting the dissolution of a company in another case. In its annual report of 2024, the Fiscal Intelligence and Investigation Service (Fiscale inlichtingen- en opsporingsdienst) indicated that it has increased the time spent on sanctions enforcement, focusing on the port of Rotterdam considering its role as “a logistics hub in Europe”.

Sanctions enforcement in the Netherlands has been very proactive compared to other EU member states. In France, there have been no criminal convictions to speak of so far, and investigations have been limited in number. Similarly, in Belgium only a small number of enforcement actions have been initiated. The fact that the Dutch legislator did not require amendments to its Sanctions Act following the Directive speaks to the fact that sanctions enforcement was always regarded as a serious offence. Enforcement unsurprisingly picked up after Russia’s invasion of Ukraine, and the Dutch authorities acknowledge their position as a popular country for economic actors.

While the Dutch authorities go after sanctions violations in a rigorous manner, which is reflected in steep fines and the imposition of prison sentences, they also acknowledge the fact that, with the number of transactions occurring regularly and the multitude of stakeholders involved, it is not possible to detect and investigate every sanctions violation, irrespective of the severity of the offences. The Guidelines on self-reporting were therefore adopted to tackle this issue in a practical manner. Accepting that some cases might otherwise not come to light, the Guidelines aim to offer instructions for companies to come forward and co-operate during the investigation. However, it is important to recognise the shortcomings of the Guidelines in their current form. While their stated objective is to provide legal entities with incentives on self-reporting, co-operation and self-investigation – thereby enhancing the information position of the Public Prosecution Service and, more broadly, contributing to the efficiency of investigations and prosecutions – the Guidelines remain ambiguous, uncertain and potentially costly for legal entities. Whether – and to what extent – the Guidelines on self-reporting, co-operation and self-investigation will provide practical guidance to legal entities and incentivise them to self-report and co-operate remains to be seen in practice.

Note: The authors express their gratitude to Alfredo Garcia Sanchez for his research and assistance in drafting this article.