Summary
The European Union has shifted from largely administrative sanctions toward a tougher, criminally enforced model. A recent high-profile arrest in Italy for alleged terrorist financing through a charitable front illustrates this transformation.
Authorities treated sanctions evasion and indirect financial support to a designated terrorist group as serious criminal offenses, backed by cross-border intelligence cooperation with the United States and EU agencies.
This marks a move from freezing assets to prosecuting and dismantling financial networks, signaling that compliance failures—especially in non-profits, charities, and dual-use sectors—now carry real criminal risk across the EU.
For decades, the European Union’s approach to sanctions was often criticized by international partners, particularly the United States, as being “broad in scope but shallow in bite.” While the EU was proficient at drafting lists of sanctioned individuals and entities, the actual enforcement of these measures, specifically the criminal prosecution of those facilitating the flow of funds, was left to the varied and sometimes inconsistent legal systems of individual Member States.
The recent arrest of Mohammad Hanun in Italy, a founder and president of the Association of Solidarity with the Palestinian People, marks a watershed moment in this landscape. Accused of promoting activity for terrorist purposes and laundering funds intended to support Hamas under the guise of charitable aid, Hanun’s case is not merely a localized criminal matter. It is a profound “first sign” that the EU has entered a new era of aggressive, synchronized, and criminalized sanctions enforcement. To understand the significance of Hanun’s arrest, one must look at the historical context of EU sanctions. Historically, being placed on a sanctions list in Europe resulted in frozen bank accounts and travel bans – administrative hurdles that sophisticated actors could often circumvent through shell companies or “hawala” informal transfer systems.
However, following the geopolitical shifts of the early 2020s, the EU moved to criminalize the violation of sanctions. Hanun’s arrest is one of the first high-profile applications of this “hard enforcement” philosophy. By treating the movement of funds to a designated group (Hamas) as a criminal offense of “incitement to commit a crime with the aim of terrorism,” Italian authorities, supported by European intelligence, have moved the goalposts. The message is clear: the EU is no longer content to simply “freeze” assets; it is now prepared to “seize and prosecute.”
The Hanun case highlights a specific vulnerability in the EU’s dual-use and financial ecosystem: the use of non-profit organizations (NPOs) as conduits for illicit transfers. Hanun’s association allegedly served as a bridge between European donors and the financial wings of sanctioned entities.
This enforcement action demonstrates the practical application of the 6th Anti-Money Laundering Directive (6AMLD), which expanded the list of “predicate offenses” to include terrorism and organized crime. Under these rules, even if Hanun claimed the funds were for humanitarian purposes, the lack of transparency in the “last mile” of delivery triggered the enforcement. European prosecutors are now using Enhanced Due Diligence (EDD) requirements not just as a banking standard, but as a prosecutorial tool to dismantle networks that exploit the B2B or B2C charitable sectors to bypass trade and financial blocks.
A critical reason why the Hanun arrest is seen as a “first sign” of broader enforcement is the unprecedented level of cross-border cooperation involved. The investigation did not happen in a vacuum; it was fuelled by a convergence of interests between Italian financial police (Guardia di Finanza), the U.S. Department of the Treasury (which had already sanctioned Hanun), and EU-wide intelligence sharing through Europol.
In the past, an individual sanctioned in the U.S. might still find operational space within certain EU Member States due to differing definitions of “support.” Hanun’s arrest signals that the transatlantic gap in enforcement is closing. The EU is increasingly adopting the “Global Magnitsky” style of pursuit, where being “designated” carries the same weight in Rome or Berlin as it does in Washington. This convergence prevents “jurisdiction shopping” by illicit financiers who previously viewed Europe’s fragmented legal landscape as a safe harbor.
In the world of strategic trade and financial controls, perception is as important as the law itself. For years, the “Red Flag” indicators provided in Commission Recommendation (EU) 2019/1318 were viewed by some companies and associations as mere suggestions.
The high-profile nature of Hanun’s arrest serves as symbolic deterrence. It sends a shockwave through the “brokering” and “charitable” sectors, warning that the “I didn’t know where the money was going” defense is no longer viable. For compliance officers across the EU, the Hanun case is a case study in why Ultimate Beneficial Owner (UBO) verification and End-Use monitoring are critical. If an architect in Italy can be arrested for the downstream destination of funds, any B2B entity transferring dual-use technology or sensitive funds must realize they are under the same microscope.
While the arrest is a milestone, it also reveals the challenges the EU faces in maintaining this momentum. To truly turn this “first sign” into a standard of enforcement, the EU must harmonize penalties, ensuring that a sanctions violator faces the same jail time in the Netherlands as they would in Italy. It must also strengthen the newly established Anti-Money Laundering Authority (AMLA), which must use cases like Hanun’s to create standardized “Red Flag” checklists for all European firms. Furthermore, it must protect the dual-use parameter, as funds are the lifeblood of illicit trade. The enforcement of financial sanctions is the primary defence for keeping dual-use technology (like potentiostats or sensors) out of the wrong hands.
Hanun’s arrest represents the moment the EU’s “paper tiger” of sanctions enforcement grew teeth. It is a definitive transition from a reactive policy of listing names to a proactive strategy of dismantling financial pipelines.
For the business community, the Hanun case is the ultimate proof that Trade Compliance and Financial Compliance are now inseparable. Whether dealing with the transfer of sophisticated lab equipment or the distribution of charitable funds, the “Duty of Care” has been elevated to a criminal standard. The Italian authorities have not just arrested an individual; they have signaled the start of a “zero tolerance” era for the circumvention of European security interests.
