The department responsible for overseeing EU sanctions policy has been relocated, following a decision by the new European Commission (EC) team led by President Ursula von der Leyen. The supervision of the preparation and implementation of EU sanctions— until now carried out by the Foreign Policy Instrument (FPI), a small EC service integrated within the external action structure of the EU—has been moved to the Directorate General in charge of financial services. This institutional change, which might seem relatively insignificant at first sight, could announce a more assertive European sanctions policy for the years to come and help reduce discrepancies in sanctions implementation at the Member State level.

The Institutional Setting of Sanctions Policy at EU Level

In the EU system, restrictive measures are agreed by unanimity in the Council of the EU and implemented individually by Member States. Proposals for sanctions are formally made by the EU High Representative, currently Josep Borrell. In practice, the work was until now shared between the European External Action Service (EEAS) and the FPI. The FPI was created to supplement the EEAS in areas where the EEAS, as a non-EC service, could not act (notably management of EU funds and drafting of legislation). With regard to sanctions, the FPI assisted the EEAS in related negotiations, prepared legal texts and was in charge of liaising with Member States and economic operators in order to facilitate implementation.

Soon after taking office, President von der Leyen announced that the unit responsible for sanctions within the FPI would be moved to the EC’s Directorate General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA), led by Executive Vice-President Vladis Dombrovskis. Since the beginning of the year, a new sanctions unit has therefore been integrated into FISMA’s financial systems and crisis management Directorate. This arrangement strengthens the links between the work of the EEAS and the larger EC machinery. The lead role of the EEAS and the High Representative at the proposal stage remains unchanged.

What will change?

President von der Leyen’s objective is to “ensure that the sanctions imposed by the EU are properly enforced, notably throughout its financial system”, according to the mission letter which was sent to Executive Vice-President Dombrovskis. In addition to serving as the EU center of expertise in the field of finance, DG FISMA has the advantage of being able to launch infringement proceedings against Member States that fail to implement EU legislation. This could be a useful tool to address one of the major loopholes of the current EU sanctions policy structure: discrepancies in the implementation of EU restrictive measures between Member States.

New Perspectives for EU Sanctions Policy 

The rearrangement is to be understood as part of a wider effort by the new EC team to strengthen EU sanctions policy. Notably, President von der Leyen’s mandate has an additional objective of ensuring that “Europe is more resilient to extraterritorial sanctions”, i.e. to the extraterritorial application of US restrictive measures. Proposals from Executive Vice-President Dombrovskis aimed at this goal can be expected in a near future. If the new team follows through with these ambitions, the institutional move to DG FISMA could be the first step towards a progressive reform of the EU sanctions policy.