Sanctions update 1/2025

A new Swedish Sanctions Act – does it meet EU requirements?  

On 20th May 2025, a new sanctions Act entered into force in Sweden. The purpose of the Act is to implement Council Regulation 2024/1226 which imposes obligations on Member States to inter alia criminalize sanctions breaches. The final text of the new Act mirrors the legislative proposal, which we previously have reported on (see Sanctions update 3/2024). In particular, the following changes from the old Act may be noted:

• Increased penalties: With the new Act, the maximum penalty for a breach is increased from two to three years and maximum penalty for a gross breach is increased from four to six years, with fines excluded as an option  
• Minor breaches (the value of the goods and other circumstances are relevant) are criminalized and can result in a fine, or maximum six months imprisonment. Breaches will however only be prosecuted if there is a public interest to do so
• Recurring breach is a new type of crime which can lead to maximum six years imprisonment
• Attempted breach, as well as instigation and aiding, is criminalized 
• Agencies must report suspected breaches to the enforcement agencies
• It will be possible to forfeit property even if the property does not belong to the wrongdoer

Interestingly, the new Act does not contain any provisions regarding corporate liability since, apparently, the Swedish government is of the opinion that the Swedish system for corporate fines satisfies the Regulation’s requirement for minimum penalties for legal persons, which for some breaches is a percentage of global turnover (1% or 5%) or a penalty level of MEUR 40.

However, the maximum corporate fine in Sweden for smaller companies is only MSEK 10, furthermore, neither the new Act nor the provisions pertaining to corporate fines make any reference to a company’s turnover for the calculation of fines. It is therefore not clear how the minimum levels set out in the Regulation will apply in Sweden.

Notably, under Swedish law, only natural persons can commit a crime. Hence, a corporate fine is strictly speaking not a remedy for a company committing a crime but instead a so called special legal effect of a crime (SW: särskild rättsverkan av brott).

One further aspect should also be mentioned. A corporate fine in Sweden can only be imposed if a crime has been committed in conjunction with the pursuit of the company’s business activities, which according to the Swedish Prosecutor’s Office is understood to mean in the exercise of the activities for which the undertaking should be responsible [1]. The Regulation, on the other hand, refers to crimes that have been committed to the benefit of the company i.e.  potentially a broader area.  

[1] See The Public Procecutor’s publigation “Företagsbot, Handbok” page 9.

EU adopts 17th sanctions package and increases usage of secondary sanctions

On 20 May 2025, EU adopted a 17th sanctions package against Russia comprising of:

• sanctions against 17 individuals and 58 entities, including Surgutneftegas
• a ban on port access and on providing services related to maritime transport for a additional 189 vessels (total number now 342 vessels) originating from third countries that are part of Russia’s shadow fleet
• export restrictions on dual-use goods and technologies for 31 new entities, some of which are located in third countries
• further export restrictions on goods which contribute to Russia’s military and technological enhancement, including chemical precursors to energetic materials and spare parts for machine tools

Notably, sanctioned entities are located in the United Arab Emirates, Türkiye, Serbia, Vietnam, Uzbekistan mainland China and Hong Kong. Although, technically, EU sanctions do not apply to these entities, they are sanctioned for being so called enablers or participating in sanctions circumvention schemes. Regarding sanctioned vessels, the argument for stretching EU jurisdiction is that they are engaged in dangerous practices at sea while transporting Russian oil. The shadow fleet vessels are generally perceived to be of sub-standard quality, lack proper liability insurance (P&I) and engaged in unlawful activities such as interrupting the AIS transmission. It is nevertheless interesting to note that in the area of sanctions, EU appear to increasingly apply its law beyond its territorial borders.

Furthermore, on 2nd June 2025, EU announced that it is preparing a 18th sanctions package, targeting Russia's energy revenues, including the Nord Stream pipeline infrastructure and Russia's banking sector. In addition, the Commission has proposed to lower the oil price cap [2] from USD 60 per MT to USD 45 per MT.

[2] The oil price cap refers to a maximum price for Russian oil of certain HS codes as agreed by the G7 price cap coalition. EU companies are prohibited to provide services to vessels shipping Russian such oil above the price cap. Notably, it is  generally prohibited to import Russian oil into the EU even if purchased below the price cap.   

New Rules in Sweden to target Russia’s shadow fleet

The Swedish government has announced that starting July 1 2025, it will be enforcing new rules on ships that pass through Swedish territorial waters or the Swedish economic zone – not just those that call at a port. It joins other Member States, including Estonia and Finland, and the European Union which have also introduced new monitoring efforts, including verification of proof of insurance for vessels sailing through the Baltic sea. Sweden’s action follows an initiative by the European Commission which earlier this year adopted a requirement that all vessels, including those merely passing through EU waters without entering an EU port, must provide proof of insurance.

Report on sanctions compliance in Sweden

Sanctions enforcement is increasing throughout the EU, but Sweden appears to lag behind. As of October 2024, reportedly only 3 criminal investigations had been commenced  when at the same time more than 600 investigations had been commenced in our neighboring country Finland. A multi-agency position paper on sanctions compliance issued at the end of 2024[3], makes the following observations:

• Nine different agencies are assigned various tasks in relation to supervision of sanctions compliance but no agency has the overall responsibility
• There are clear signs of sanctions circumvention when analyzing trade statistics
• The Prosecutor’s office has allocated investigations to two different departments depending on which other agency that is involved in the investigation, i.e. work is not streamlined
• As to high-risk countries and modus operandi of sanctions evaders, Swedish agencies see three different type scenarios regarding sanctions evasion:
  
  

- Use of world-wide Russian procurement network
- EU multi-national companies having subsidiaries or branches in third countries
 - Swedish companies exporting products without knowing that the products are re-exported to Russia

 Companies exporting products subject to Russian sanctions are recommended to review their supply chains and, if necessary, the beneficial owner of the participating companies, in order to ensure they are not unknowingly participating in a sanctions evasion scheme.

[3] The Swedish Economic Crime Authority, the Swedish Financial Supervisory Authority, the Swedish Inspectorate for Strategic Products, the National Board of Trade, the Swedish Police Authority, the Swedish Tax Agency, the Swedish Security Service, the Swedish Customs and the Swedish Prosecution Authority - Ju2024/01094

EU sanctions helpdesk

The European Commission has launched the EU Sanctions Helpdesk, an on-line support service for small and medium sized companies and organizations (SMEs) in the EU providing personalized assistance in relation to EU sanctions. According to the website, the Helpdesk’s role is to help locate certain information and to advise SMEs of potential risks (but not to assess those risks). The European Commission does not take responsibility or accept liability for any of the activities of the Help Desk. 

US and EU revoke sanctions against Syria

On 28 May 2025, The EU Council reported that  it had adopted legal acts lifting all economic restrictive measures on Syria, with the exception of those based on security grounds.

The action aims at supporting the rebuilding of Syria. As part of the same approach, the Council has also removed 24 entities from the EU sanctions list, including the Central Bank of Syria and companies operating in key sectors for Syria’s economy, such as oil production and refining, cotton, and telecommunications.

A few days earlier, the US Department of the Treasury issued Syria General License 25 providing immediate sanctions relief for Syria. 

As a result of the above measures, trade with Syria has become much easier but significant compliance risks remains so extensive due diligence is still required.