As sanctions become a central tool of EU foreign policy, their enforcement has shifted away from courts and into the hands of national Financial Intelligence Units (FIUs). These bodies, originally designed to fight financial crime, now freeze assets across borders without prior notice, judicial oversight, or clear appeal mechanisms. This article examines how FIUs operate at the intersection of urgency, discretion, and opacity, raising pressing questions about legal certainty, proportionality, and constitutional accountability. It argues that the challenge is not choosing between speed and fairness but designing a system where both can coexist within the rule of law.

When Russian oligarchs move their wealth across borders, they do not use tanks or warships, but they use offshore companies, crypto wallets, and complex webs of shell entities. As the European Union (EU) steps up its sanctions efforts, the real action is no longer happening in courtrooms, it’s fought behind screens. Enforcement now takes place through spreadsheets, flagged transactions, and quiet alerts sent between institutions. There are no judges or hearings involved. For many of those affected, the experience is disorienting: they discover their assets are frozen without warning, offered little explanation and even fewer options for appeal. Instead, national Financial Intelligence Units (FIUs), largely invisible to the public, act as frontline enforcers. They monitor, freeze, and disrupt assets at the speed of finance but with broad discretion and limited oversight.

While the design of sanctions remains supranational, issued through EU regulations, enforcement lies in the hands of national actors. FIUs, originally created to combat money laundering and terrorist financing, have taken on new functions as decentralized agents of EU foreign policy. Yet FIUs are not EU institutions. They are national bodies, operating under each member state’s legal framework. Their cooperation is loosely coordinated at the EU level, primarily through the FIU.net platform (now run under Europol) and broader anti-money laundering directives. Yet this cooperation has clear limits. As a European Parliament study notes, EU FIUs differ significantly in how they are structured, resourced, and legally empowered. These differences do not just affect how they gather and analyse information they also shape how, or whether, they share it with each other. In fact, because EU countries define financial crimes differently, some FIUs can even refuse to cooperate on certain cases altogether. This fragmented landscape makes cross-border enforcement patchy and leaves individuals subject to sanctions facing widely different procedures and protections depending on where they are. These institutional disparities are not merely technical but they carry serious legal consequences.

In practice, FIUs exercise substantial powers across borders, yet often do so without consistent judicial oversight or procedural transparency. They detect, block, and report suspicious activities, often operating without judicial review. This shift, while pragmatic, raises difficult legal questions. As Al-Rashdan has observed in his study of enforcement practices, these units often work in a grey zone, where procedural safeguards are vague and administrative efficiency outweighs legal certainty. In this changing environment, a parallel system of financial control has emerged, a framework where surveillance and discretionary control increasingly take precedence over traditional legal protections.

A Constitutional Dilemma at the Heart of Europe

The expansion of FIUs’ role from financial crime prevention to sanctions enforcement raises pressing constitutional questions. Their mandates have grown exponentially, yet their accountability structures have not evolved proportionally. Much of their work occurs without judicial authorization. In most EU member states, asset freezes are not preceded by any court order. Instead, decisions are administrative, often based on intelligence exchanges within international networks such as the Egmont Group or through frameworks developed by the Financial Action Task Force (FATF).

This is partly because FIUs are typically housed within executive bodies, such as ministries of finance, customs authorities, or law enforcement agencies, rather than being part of the judiciary. Their position within the administrative branch allows them to act quickly and with considerable discretion. But this very speed comes at a cost which is: their decisions are rarely subject to real-time judicial oversight. As a result, individuals can see their assets frozen or transactions blocked without prior notice, without knowing the reasons, and without immediate access to an effective remedy. 

This procedural model reflects an uneasy tension between swift, effective sanctions enforcement demands and the constitutional principles underpinning the European legal order. The EU often speaks of its foundation in the rule of law, with clear commitments to legal certainty, fairness, and the protection of rights. But when sanctions are enforced, these ideals do not always hold up. What seems like a unified system quickly becomes uneven, because the actual job of enforcing sanctions falls to national authorities with different tools, priorities, and safeguards. This uneven approach makes the situation worse, showing how the EU’s shared promises often break apart when put into practice.

While the sanctions themselves are circulated via EU regulations, binding in all member states, the operational enforcement rests squarely with national authorities. For instance, Germany’s BaFin and its FIU operate within a legal tradition that prioritizes constitutional review and property rights. In one instance, the German Federal Constitutional Court (BVerfG) intervened to assess the proportionality of an asset freeze imposed without adequate procedural justification. In contrast, France’s Tracfin, the national FIU, has adopted a more aggressive approach. By mid 2023, it had frozen over € 1.18 billion in Russian-linked assets (French Ministry of Economy and Finance, 2023). Yet, how these asset freezes are carried out often remains unclear, and the options for individuals to challenge them are limited and difficult to navigate.

These differences between countries highlight a deeper issue: enforcement across the EU is far from consistent. As scholarship by Van Elsuwege (2011) and Eckes (2013) shows, even the principle of proportionality, a cornerstone of both EU and national law, is applied inconsistently in asset-freezing cases.

The Rise of Digital Enforcement

Moreover, the rise of cryptocurrencies and decentralized finance adds further complexity. FIUs now use AI-driven anomaly detection and cross-border forensics to trace assets. While these tools increase efficiency, they widen the accountability gap. Algorithmic decision-making in financial surveillance often operates within a black box largely inaccessible to affected individuals and courts. The lack of transparency in such systems leads to profound rule-of-law challenges, especially when these tools are relied upon to freeze assets without meaningful oversight.

This leads to a pressing legal dilemma. The right to property, enshrined in Article 17 of the Charter of Fundamental Rights of the EU, is increasingly curtailed not by courts but by administrative bodies. Individuals often discover their accounts are frozen only when transactions fail, without prior notice or the ability to challenge the decision pre-emptively. Remedies are slow, fragmented, and vary significantly across jurisdictions. The Court of Justice of the European Union addressed this very issue in its landmark Kadi judgment, where it annulled an EU regulation implementing UN sanctions due to the absence of procedural safeguards. The Court emphasized that even in matters involving global security, individuals must be given reasons for the restrictive measure and access to effective judicial review. While the formal right to appeal exists in EU law, the Kadi case revealed how that right may be hollow in practice when decisions are made without transparency or meaningful avenues for redress.

This structural reliance on financial intelligence rather than judicial oversight has created a parallel enforcement model, where compliance protocols and administrative decisions impact rights without the usual legal safeguards. In this environment, decisions to freeze assets or block transactions can occur without prior notice and with limited opportunity to challenge them effectively.

The current system may end up treating important legal protections as optional, using urgency as an excuse. While quick action might be needed to stop sanctions evasion, skipping fair legal procedures makes the process unclear and unpredictable. FIUs hold a lot of power, and because they also work closely across borders, they now form an international system that works without an ordinary legal check. While there is technical coordination through platforms like FIU.net and Europol, these structures are mainly designed for secure information exchange not for legal oversight. There is no EU-level authority that systematically reviews how national FIUs exercise their powers in practice. Some member states may have internal review bodies or ombuds services, but these mechanisms are inconsistent, limited in scope, and rarely provide timely remedies. This results in a system where high impact decisions are made with little external scrutiny.  

Can the Rule of Law Keep Up?

Legal theorists like André Nollkaemper have highlighted the essential role national courts can play in holding states accountable under international law. However, national judiciaries are often sidelined in the current sanction enforcement architecture. Instead, enforcement is guided by administrative order, supported by international pressure, and legitimized by urgency.

This raises the need for a more harmonized model. Some scholars propose a dedicated EU-level sanctions court. Others call for streamlined national procedures that include fast-track judicial review, ex-ante (before the event) notification requirements, and the right to contest asset freezes. Such reforms would help bridge the constitutional gap without compromising enforcement effectiveness.

Still, ideas like ex-ante notification come with real concerns. Giving people a heads-up before a freeze could let them move their money around, hide it behind shell companies, or get others to hold assets for them. This is a serious risk, especially when dealing with complex networks or high-value properties. But that does not mean we have to choose between fairness and effectiveness. Instead of full prior notice, we could think about alternatives—like quick judicial review right after a freeze, confidential pre-approvals, or emergency power that are clearly time-limited and monitored. The goal should be to build a system where fairness and speed are not mutually exclusive but mutually reinforcing. Recent legal studies show that although courts like the CJEU do review asset-freezing decisions, they often do so reactively and slowly—underscoring the need for combining limited pre‑freeze vetting with rapid post‑freeze remedies to close the constitutional gap without weakening enforcement. However, its role remains limited to reactive adjudication, which often happens years after enforcement measures are taken.

Sanctions, Symbolism, and Substance

Sanctions are both political tools and economic weapons. They need to work quickly, but they also need to follow the law to be credible. If the EU enforces sanctions without sticking to legal principles, it could damage the very values and identity it wants to show the world, potentially undermining its reputation and influence.

A model built on secrecy, surveillance, and unchecked discretion may serve short-term interests but poses long-term dangers to legal legitimacy. As the Union pursues greater geopolitical assertiveness, it must ensure that its enforcement strategies align with its foundational values, not merely in theory but in practice.

Toward Constitutional Sanctions Enforcement

The challenge is not to dismantle the existing architecture but to reinforce it with constitutional safeguards. This includes mandating judicial oversight, transparency in algorithms, real-time remedies, and uniform application of proportionality across member states. It also demands recalibrating the balance between security imperatives and human rights, particularly the right to property and fair trial. In short, the question is not whether financial intelligence can deliver justice. It is whether Europe can ensure that justice, however rendered, remains within the bounds of law.

Aişe Gül Akkoyun is a PhD Candidate at the University of Zurich. Her research explores the intersection of sanctions enforcement, judicial reasoning, and computational legal studies in international dispute resolution. She holds an LLM in Public Law from Koç University, where she pioneered the use of computational methods in legal research. She is the founder of Digital Legal Studies (DLS), where she builds tools and conducts research at the intersection of public law, digital regulation, and legal data science. She was awarded the 2024 David D. Caron Fellowship and is a Young OGEMID, ESIL, and ASIL member.