A components supplier near Nantes had been delivering electronic parts to a Turkish distributor for four years. In March 2026 the distributor asked to be invoiced instead through a sister company registered three months earlier in Yerevan, in Armenia, and to settle the matter by a simple change of address amendment. The product had not changed, nor had the commercial contact, and payment still arrived. The company agreed without writing anything down. On an audit eighteen months later, it had no document showing that it had asked itself the question, although the text required it to ask and to document the answer.
Sanctions compliance is no longer a matter of checking a list before shipping. It is a matter of producing, months or years later, a file showing what was verified and why the transaction was concluded to be lawful. This page sets out the four obligations that now rest on a French exporter, how they fit together, and the penalty attached to each.
1. What a restrictive measure actually reaches
The European regime applicable to Russia rests on two regulations with distinct logics. Regulation (EU) No 269/2014 organises asset freezes and individual designations: funds or economic resources may not be made available to a designated person, directly or indirectly (article 2). Regulation (EU) No 833/2014 organises sectoral measures, that is, prohibitions bearing on categories of goods, technology and services. The twentieth package was adopted on 23 April 2026, the twenty-first on 23 July 2026 (Regulation (EU) 2026/1848).
The word that decides cases is indirectly. A perfectly lawful company, registered in a country subject to no measure at all, may be owned or controlled by a designated person, and the transaction then becomes prohibited without the customer name appearing anywhere. That is why the check bears on the beneficial owner and not on the corporate name alone. In France, the Treasury directorate maintains the national register of all freezing measures, national, European and United Nations, and that register is what counts.
The duty to implement is immediate and personal. Anyone present on French territory must apply the freeze without delay and inform the Treasury directorate (monetary and financial code, article L. 562-4), and any sum credited to a frozen account must be reported (same code, article L. 562-7). There is no courtesy period for checking with your adviser before applying it.
What remains is the meaning of ownership and control. Ownership is classically assessed above fifty per cent of the proprietary rights, but control is an autonomous and far broader criterion: it covers the effective ability to determine the decisions of the entity, whether it arises from a shareholders agreement, an article of association, the power to appoint the majority of the directors, structuring finance or simple dominant influence in fact. A minority holding may therefore be enough. For an exporter the operational consequence is easy to state and tiresome to carry out: the check does not stop at the first level of the ownership chart. It goes up until the ownership chain becomes clear, and where it does not become clear, that opacity is itself the red flag, not the absence of a name from a list.
For the regimes themselves and asset freezes, see our international sanctions page; for the position regarding Russia specifically, our article on what a French company may still do.
2. The prohibition on circumvention, extended to recklessness
The most formidable provision of the regime is not a prohibition on selling, it is a prohibition on participating. It is forbidden to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the prohibitions of the regulation, including by participating in such activities without deliberately seeking that object or effect but being aware that the participation may have it and accepting that possibility (Regulation (EU) No 833/2014, article 12).
The second limb, added by the eleventh package, gives effect to recklessness. It is no longer a matter of showing that the exporter intended to circumvent the measure. It is enough to establish that it perceived the risk and proceeded anyway. An email from the customer announcing a change of destination, invoicing suddenly redirected to a company created a few weeks earlier in a neighbouring country, payment from a third party with no apparent connection: these establish awareness of the risk. Looking away is no longer a tenable legal position.
The twentieth package also crossed a line that many exporters have not registered. The Union activated its anti-circumvention tool for the first time, prohibiting exports of computer numerical control machine tools and radio sets to Kyrgyzstan, a country subject to no sanctions regime at all. The geography of risk is therefore no longer read on the map of sanctioned countries. It is read on the map of circumvention routes.
3. The contractual no-re-exportation clause
For certain goods, the Union does not merely prohibit: it requires a contractual stipulation. Contracts for the goods and technology of Annexes XI, XX, XXXV and XL to Regulation (EU) No 833/2014 must prohibit re-exportation to Russia or for use in Russia, and provide adequate remedies in the event of breach (article 12g). The exporter must also inform its competent authority as soon as it becomes aware of a breach by its counterparty.
The obligation applies to contracts concluded from 19 December 2023, with a clause to be inserted no later than 20 March 2024. Earlier contracts had a transitional period which expired on 19 December 2024, so they had to be amended by 1 January 2025. A framework contract signed in 2022 and still being performed without an amendment is therefore, today, non-compliant.
Two drafting errors recur. The first is to insert a customer representation rather than a prohibition backed by a sanction: the text requires adequate remedies, which presupposes at least an automatic termination clause and liquidated damages. The second is to fail to pass the obligation down the chain: a clause binding your direct buyer without requiring it to impose the same prohibition on its own customers leaves the chain open at the very next link.
Useful drafting takes few lines, provided they are the right ones. The buyer undertakes not to re-export the goods, directly or indirectly, to the Russian Federation or for use in the Russian Federation. Any breach is a material failure allowing automatic termination and giving rise to liquidated damages expressed as a percentage of the price, which satisfies the requirement of adequate remedies. The buyer undertakes to pass the same prohibition on to its own counterparties and to inform the seller without delay of any breach of which it becomes aware. Finally, the seller is released from any performance that would expose it to a breach of a restrictive measure, and that suspension cannot engage its liability. This last stipulation, often forgotten, is the one that protects you on the day a sanctions package makes an already sold delivery unlawful.
4. The documented diligence obligation, separate from the clause
Since 26 December 2024, operators selling, supplying, transferring or exporting Annex XL goods must identify, assess and document the risk of re-exportation to Russia, and put in place internal controls proportionate to that risk (Regulation (EU) No 833/2014, article 12gb). That obligation stands on its own. It is not the contractual clause and it is not performed by signing one.
To document means to produce a written record, dated, kept and capable of being relied on. In December 2023 the European Commission published guidance to operators on enhanced due diligence, which structures the exercise around commercial partners and their beneficial owners, transport routes and financial flows, the nature and classification of the goods, and end use. It lists a series of red flag indicators whose practical value is considerable, because they describe exactly what an investigator will later look for in your emails.
The difference between the company that has performed this obligation and the one that has not lies not in what it concluded but in what it can show. A file containing the dated consultation of the freezing register, the product classification sheet, the end-use statement and the record of the decision taken on a red flag puts the exporter in a radically different position from one that says it noticed nothing. The first company argues about the assessment of a risk. The second argues about its good faith.
5. Subsidiaries outside the Union, the blind spot of groups
One obligation remains widely ignored by companies with structures outside the Union. The European operator must use its best efforts to ensure that legal persons, entities and bodies established outside the Union that it owns or controls do not take part in activities undermining restrictive measures (Regulation (EU) No 833/2014, article 8a, introduced by the fourteenth package and applicable since 24 June 2024). An equivalent provision exists in the Belarus regime.
It is an obligation of means and not of result, which is reassuring for the wrong reasons. An obligation of means is demonstrated by the means employed, and a company that can produce neither a written instruction to its subsidiary, nor a clause in the shareholders agreement, nor periodic reporting is in exactly the position of one that did nothing. The expected means are neither exotic nor costly: a group policy note, a compliance clause in intragroup agreements, a documented annual review.
6. Enforcement in France, and the reform announced
The recodification of the customs code, in force since 1 May 2026, has moved the seat of enforcement. Article 459, which every practitioner used to cite, has become article L. 542-2, which punishes failure to comply with measures restricting economic and financial relations adopted under Union law pursuant to articles 75 or 215 of the Treaty on the Functioning of the European Union with the penalties of article L. 542-1: five years of imprisonment, a fine equal to twice the amount to which the offence relates, and confiscation of that amount, of the means of transport used and of the goods that are the proceeds of the offence. For a legal person, five times the fine incurred by an individual.
One point deserves to be stated rather than passed over. Article L. 574-3 of the monetary and financial code, which punishes evasion of freezing obligations, still refers, in its accessible wording, to the penalties of article 459(1) of the customs code, that is, to a repealed article. Either the coordination was made by a provision that escaped me, or it was not, and it will fall to the court to give the cross-reference its object. In the meantime, citing both numberings in any litigation correspondence is elementary prudence.
The reform, finally, is not complete. Directive (EU) 2024/1226, harmonising the definition of criminal offences for the violation of restrictive measures, was to be transposed by 20 May 2025 at the latest. France has transposed it only in part, by a decree of 28 May 2025 designating the coordinating authority, and the European Commission sent it a reasoned opinion on 4 June 2026. A bill tabled in the National Assembly on 3 March 2026 provides for a complete overhaul, with penalties of up to ten years of imprisonment for dual-use items and fines based on worldwide turnover. Those penalties are not in force. They indicate the direction.
The firm assists exporting companies on all of these questions as part of its international trade law practice, in advice as in defence.
Coming next, and worth reading alongside the sanctions rules: Regulation (EU) 2026/2108 replaces the 2013 Union Customs Code from 21 September 2027 and redefines who answers for an import. See Le nouveau code des douanes de l’Union : ce qui change concrètement pour les entreprises (Village de la Justice, 22 September 2026, in French).
This analysis is part of a set on exporting from France: start with the legal checklist before you sign, and see also dual-use items and export licences and preferential origin.
Further reading: Export agents and intermediaries: managing bribery risk under Sapin II; Bank guarantees and Russia sanctions: blocking the call, defending in Russia.
Frequently asked questions
My customer is on no list. Am I compliant?
Not necessarily. The absence of the customer from the designation lists settles neither the beneficial ownership question, since the prohibition also covers the indirect making available of economic resources (Regulation (EU) No 269/2014, article 2), nor the sectoral measures, which bear on categories of goods and not on persons. An impeccable customer may order goods whose export to its destination is prohibited. The two checks are distinct and both must appear in the file.
I discover a breach after shipment. What should I do?
The first thing is to stop performing whatever can still be stopped, including later deliveries under a framework contract and payment operations. The second is to characterise precisely what is at stake: the basis of the restriction, the persons covered, the goods, the destination, the financial flows. The third is to check your reporting obligations, which exist both under the contractual clause (Regulation (EU) No 833/2014, article 12g) and under the national freezing regime. A documented voluntary disclosure does not erase the offence, but it weighs.
Can a bank block my payment on this ground?
Yes, and it is frequent. Financial institutions apply their own filtering systems, often broader than the applicable law, particularly where they are exposed to extraterritorial regimes. A payment may be suspended on a mere similarity of names, on the mention of a port, or on the name of a vessel. The Treasury directorate handles cases of name similarity. In practice, the best prevention is to document the transaction before it is blocked, so that you can answer in forty-eight hours rather than in three weeks.
Do sanctions also cover my services?
Yes. The European regime is not limited to goods and covers entire categories of services, as well as financing, transport and technical assistance. Export control follows a similar logic, since it subjects technical assistance relating to controlled items (Regulation (EU) 2021/821, article 8) and brokering (same regulation, article 6) to authorisation. An engineering firm that delivers no physical goods may therefore be fully caught by a regime it believes is reserved for flows of goods.
How do I know whether my product falls under Annex XL?
Annex XL to Regulation (EU) No 833/2014 lists common high priority items and it is that annex, in its consolidated version, that governs. The European Commission also circulates an operational list of the same items, organised by priority tier and based on harmonised system codes, useful for a first sort but not binding. The correct method is therefore to start from your tariff classification, compare it with the consolidated annex, and keep a dated record of that check.