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(2) Union restrictive measures, such as measures concerning the freezing of funds and economic resources, the prohibitions on making funds and economic resources available and the prohibitions on entry into or transit through the territory of a Member State, as well as sectoral economic and financial measures and arms embargoes, are an essential tool for the promotion of the objectives of the Common Foreign and Security Policy (CFSP), as set out in Article 21 of the Treaty on European Union (TEU). Those objectives include safeguarding the Union’s values, security, independence and integrity, consolidating and supporting democracy, the rule of law, human rights and the principles of international law and preserving peace, preventing conflicts and strengthening international security in accordance with the aims and principles of the United Nations Charter.

(3) To ensure the effective application of Union restrictive measures, it is necessary that Member States have effective, proportionate and dissuasive criminal and non-criminal penalties in place for the violation of those Union restrictive measures, including obligations, such as that of reporting, established therein. It is also necessary that those penalties address the circumvention of Union restrictive measures.

(4) The effective application of Union restrictive measures necessitates common minimum rules concerning the definitions of criminal conduct violating Union restrictive measures. Member States should ensure that such conduct constitutes a criminal offence when it is intentional and in violation of a prohibition or an obligation that constitutes a Union restrictive measure or that is set out in a national provision implementing a Union restrictive measure, where national implementation of that measure is required. Certain conduct should constitute a criminal offence also if carried out with serious negligence. With regard to the criminal offences defined in this Directive, the notion of ‘serious negligence’ should be interpreted in accordance with national law, taking into account relevant case law of the Court of Justice of the European Union. Member States should be able to decide that violations of Union restrictive measures involving funds, economic resources, goods, services, transactions or activities of a value of less than EUR 10 000 do not constitute criminal offences. The exclusion of certain violations from the scope of this Directive does not affect any obligations laid down in acts setting out Union restrictive measures to ensure that violations are punishable by effective, proportionate and dissuasive criminal or non-criminal penalties.

(5) Acts setting out Union restrictive measures can provide for exceptions from the prohibitions laid down therein in the form of exemptions or derogations. Conduct either covered by an exemption provided for in an act setting out Union restrictive measures or authorised by the competent authorities of the Member States by means of a derogation in accordance with the acts setting out Union restrictive measures should not be regarded as a violation of a Union restrictive measure.

(6) In particular, the effective application of Union restrictive measures necessitates common minimum rules for the violations of measures consisting in freezing funds or economic resources as laid down in the relevant Council Regulations. Those measures include the prohibition to make funds or economic resources available, directly or indirectly, to or for the benefit of natural or legal persons, entities or bodies subject to measures consisting in freezing funds or economic resources, as well as the obligation to freeze all funds and economic resources belonging to, owned, held or controlled by the same persons, entities or bodies.

(7) Union restrictive measures include restrictions on admission (travel bans) which should be covered by this Directive. Such measures, usually laid down in a Council Decision adopted on the basis of Article 29 TEU and implemented by means of national law, require Member States to take the necessary measures to prevent the designated persons from entering into, or transiting through, all zones of the territory of a Member State.

(8) Member States are encouraged to pay particular attention to the mechanisms for granting nationality and residence, in order to prevent individuals subject to Union restrictive measures from using those mechanisms for violating such Union restrictive measures.

(9) Entering into or continuing any form of transaction, including financial transactions, as well as the award or continued execution of any public or concession contract falling within the scope of Directives 2009/81/EC , 2014/23/EU , 2014/24/EU or 2014/25/EU of the European Parliament and of the Council, with a third State, bodies of a third State or entities and bodies directly or indirectly owned or controlled by a third State or bodies of a third State, should constitute a criminal offence, where the prohibition or restriction of that conduct constitutes a Union restrictive measure.

(10) Union restrictive measures include the prohibition of trading, importing, exporting, selling, purchasing, transferring, transiting or transporting goods or services. The violation of such prohibitions should constitute a criminal offence, including where the goods are imported or exported from or to a third country in order to have them transferred to a destination in regard to which the prohibition to import, export, sell, purchase, transfer, transit or transport those goods constitutes a Union restrictive measure. The provision, directly or indirectly, of technical assistance, brokering services, insurance, and any other service related to those goods or services, should also constitute a criminal offence. For that purpose, the notion of ‘goods’ includes items, such as military technology and equipment, goods, software and technology, which are included in the Common Military List of the European Union adopted by the Council on 20 February 2023 or are listed in Annexes I and IV to Regulation (EU) 2021/821 of the European Parliament and of the Council .

(11) Union restrictive measures include sectoral economic and financial measures on the provision of financial services or the performance of financial activities. Such financial services and activities include but are not limited to financing and financial assistance, providing investment and investment services, issuing transferable securities and money market instruments, accepting deposits, providing specialised financial messaging services, dealing in banknotes, providing credit rating services, and providing crypto-assets and wallets. The violation of those sectoral economic and financial measures should constitute a criminal offence.

(12) Union restrictive measures include sectoral economic and financial measures on the provision of services other than financial services. Such services include but are not limited to the provision of legal advisory services, trust services, public relations services, accounting, auditing, bookkeeping and tax consulting services, business and management consulting, IT consulting, broadcasting, architectural and engineering services. The violation of those sectoral economic and financial measures should constitute a criminal offence.

(13) None of the provisions of this Directive should be understood as imposing any obligations on natural persons that would prejudice the right not to incriminate oneself and to remain silent, as enshrined in Article 7 of Directive (EU) 2016/343 of the European Parliament and of the Council , for the Member States bound by it, and in Article 48 of the Charter of Fundamental Rights of the European Union (the ‘Charter’).

(14) The effective application of Union restrictive measures necessitates common minimum rules concerning the definition of criminal offences consisting of conduct circumventing Union restrictive measures.

(15) An example of conduct circumventing Union restrictive measures that is increasingly widespread is the practice by designated persons, entities and bodies of using, transferring to a third party or otherwise disposing of funds or economic resources directly or indirectly owned, held or controlled by those designated persons, entities or bodies in order to conceal those funds or economic resources. Furthermore, the practice of providing false or misleading information, including incomplete relevant information, in order to conceal that a designated person, entity or body is the ultimate owner or beneficiary of funds or economic resources subject to Union restrictive measures also amounts to a circumvention of Union restrictive measures. Therefore, that conduct circumventing Union restrictive measures should constitute a criminal offence under this Directive.

(16) Failure to comply with an obligation to report to the competent administrative authorities laid down by acts setting out Union restrictive measures should constitute a criminal offence under this Directive.