International Sanctions Lawyer in Paris

Short answer. European sanctions regulations, notably Regulations 269/2014 and 833/2014 on Russia, apply directly to every business in the Union. An asset freeze prohibits making funds or economic resources available to a designated person, save with authorisation from the French Treasury (Direction générale du Trésor). A listing can be challenged before the General Court of the European Union within two months and ten days. US sanctions follow their own rules, including OFAC’s 50% rule.

A company learns that one of its customers is on a sanctions list, that a bank refuses a transfer because of a link with a targeted country, or that it or one of its executives is designated by a freezing measure. International sanctions form a body of law of their own, European, national and sometimes American, whose effects are immediate: asset freeze, prohibition on making funds available, criminal penalties for breach.

This page presents the situations the firm handles, apart from shipping which has a dedicated page, and how it intervenes, in compliance and in litigation, for French and foreign companies.

The risk: breaching a sanction unknowingly, or suffering one without recourse

EU regulations (notably Regulations 269/2014 and 833/2014 for Russia) apply directly to every EU company. The 50% rule extends the freeze to entities owned or controlled by a designated person, without their appearing on any list. Since Directive (EU) 2024/1226, breach of sanctions is a harmonised criminal offence across the Union.

Conversely, a European company that voluntarily complies with certain extraterritorial US sanctions breaches Blocking Regulation No 2271/96, as the Court of Justice held in Bank Melli Iran v Telekom Deutschland. A badly drafted sanctions clause may thus itself be unlawful.

The legal answer: compliance upstream, structured remedies downstream

Upstream, the firm sets up counterparty screening, asymmetric sanctions clauses, the mandatory “No Russia” clause of Article 12g of Regulation 833/2014 and the licence and release-for-basic-needs procedures with the French Treasury Directorate.

Downstream, a designation is challenged by an action for annulment before the General Court of the EU (Article 263 TFEU, two months and ten days), a delisting request to the Council and, for national measures, an action before the administrative court. Civil disputes arising from sanctions (termination, force majeure, Article 11 of Regulation 833/2014) are handled before the contract court or the arbitrator.

US sanctions, OFAC and secondary sanctions: the exposure of European companies

A European company with no US operations can be caught by US sanctions in three ways. The first is a US nexus: a dollar payment cleared through a US bank, a US-national employee or director, a US-origin component, software or technology subject to the Export Administration Regulations. The second is OFAC’s 50 percent rule, which extends asset blocking to any entity owned 50 percent or more by one or more SDN-listed persons, even if the entity itself is not listed. The third is secondary sanctions, under which the United States threatens to designate or cut off from its financial system foreign persons engaging in significant transactions with certain targets, notably in Russia- and Iran-related programmes.

EU law responds with Regulation (EC) No 2271/96, the Blocking Statute, whose Article 5 prohibits EU operators from complying with the listed US laws and which the Court of Justice has made enforceable by a counterparty whose contract was terminated (CJEU, Grand Chamber, 21 December 2021, Bank Melli Iran, C-124/20). In practice the company is caught between the risk of US sanctions, its bank’s compliance department refusing the transfer, and the EU prohibition on yielding. The firm analyses the actual nexus, structures flows and contractual clauses, and negotiates with financial institutions.

Our guide to the extraterritorial reach of US law sets out these mechanisms in detail.

Three articles go further: Sanctions against Russia: what a French company may still do, which also covers challenging an asset freeze; how to challenge international sanctions; and OFAC and the extraterritorial reach of US sanctions.

How the firm works

The firm responds urgently to bank blockages or the designation of a partner, then structures the response: analysis of the connecting link, licence application, contractual notice, suspension or exit from the contract. It represents designated persons before the EU courts and the French authorities.

The firm has published a procedural guide on challenging international sanctions and a six-point analysis, available in English from the international trade law page.

Two neighbouring questions have their own page. Measures aimed at vessels, ports and maritime services are covered on our maritime sanctions page. Controls on dual-use items are often dealt with alongside customs: see our customs law page. All of this falls within our international trade law practice.

Typical cases handled

The situations below are illustrative, anonymised scenarios. They show when the firm steps in and what the work consists of.

Transfer blocked by the bank for a Central Asian customer

A bank refuses a payment citing a circumvention risk. The firm documents the absence of any link with a designated person and obtains release of the block.

Customer designated during the contract

A distributor is listed by the EU. The firm organises suspension of the contract, relies on Article 11 of Regulation 833/2014 against its claims and secures the stock.

Executive designated and action for annulment

A foreign executive resident in France is designated. The firm brings the action before the General Court and the application for release of funds for basic needs.

French-flagged yacht, sanctioned owner, American buyer

A French-flagged yacht is held, through a company, by a person listed in Annex I to Regulation (EU) No 269/2014. An American buyer comes forward, the price is agreed, the broker is pressing. The asset freeze prohibits making any economic resource available to the designated person: without an authorisation from the French Treasury (Direction générale du Trésor), the sale is prohibited, and the price itself would be frozen in the hands of whoever receives it. The American buyer has constraints of his own, since OFAC bars him from dealing with a person on the SDN list if the seller is also listed there. We traced the ownership chain to the beneficial owner, assessed the position under both regimes, and organised the prior authorisation request with the price held in escrow, in coordination with the buyer’s US counsel. Without that work the sale was unlawful and exposed every participant, broker included, to criminal proceedings.

Frequently Asked Questions

Who is bound by European Union sanctions?

Union restrictive measures bind nationals of Member States wherever they are, any person present on the territory of the Union, any legal person incorporated under the law of a Member State, and any business done wholly or partly within the Union. That reach catches a French subsidiary of a foreign group and a foreign subsidiary of a French group in different ways, which is why the group’s map is drawn before the compliance rules are written. Directors and employees fall personally within the scope, not only the company that employs them.

How is a company’s exposure assessed?

By mapping counterparties, beneficial owners, goods, end uses, destinations, banks, carriers and intermediaries against the applicable lists, and by repeating the exercise whenever one of them changes. Ownership and control rules mean that an entity which is not itself listed can still be caught because a listed person holds more than half of it or controls it in fact. The analysis therefore concerns structures as much as names, and screening software on its own does not answer the control question.

How can one check whether a partner is subject to sanctions?

By searching the lists against several criteria, not the name alone. Sanctions regimes reach designated natural and legal persons, but also the entities they own or control, the criterion most often overlooked because it requires tracing the chain of ownership upwards. A serious check therefore covers the company name and its transliteration variants, its registration number, its directors and beneficial owners, and the ownership structure above it. The check is dated, archived and repeated before each significant transaction, since a list is amended several times a month. That audit trail matters more than the sophistication of the tool used: it is what will establish good faith if a designation follows later.

What are the penalties in France?

Breaches are criminal offences, prosecuted alongside customs and financial penalties, and they expose the company as well as the individuals who took the decision. The French customs code was recodified by the ordonnance of 8 April 2026, in force since 1 May 2026, so older references to the former numbering should be checked before being relied on. Directive (EU) 2024/1226 of 24 April 2024 requires Member States to criminalise the violation of Union restrictive measures, which has raised penalty levels and harmonised the offences across the Union.

Can a listing be challenged?

Yes. An action for annulment lies before the General Court of the European Union within the applicable time limit running from publication or notification of the listing decision, and a delisting request may be addressed to the Council at any time. The case turns on the evidence file relied on by the institution and on whether it supports the listing criteria invoked. Because the time limit is short and the file has to be requested, the first step is procedural rather than argumentative.

What is the first thing to do once designated?

Three steps, taken together rather than one after another. Ask the Council of the European Union for the reasons and the material on which the designation is based, without which the challenge is conducted blind. Apply for the authorisations needed to meet essential expenses, defence fees included. And preserve the time limit for bringing proceedings, which runs without waiting for the outcome of the first two steps. Article 263 of the Treaty on the Functioning of the European Union confines the action for annulment to a period of two months, extended on account of distance. Waiting for the outcome of an approach to the Council before bringing the case before the General Court is the surest way to be time-barred.

National freeze and European designation: what is the difference?

They are two distinct regimes that may overlap, and they are not challenged before the same court. Article L. 562-2 of the Monetary and Financial Code, in the version in force since 1 July 2017, allows the minister for the economy and the minister of the interior jointly to order an asset freeze, under a national framework dedicated to freezing and to the prohibition on making funds available. A measure taken on that basis is challenged before the French administrative courts, whereas a European designation falls within the jurisdiction of the General Court of the European Union. Identifying precisely the legal basis of the measure is therefore the first step in the file, before anything is drafted, and the two not infrequently coexist.

Can a licence or derogation be obtained?

Yes, in the cases the regulations provide for: payment of professional fees, basic needs, contracts concluded before the listing, humanitarian operations, and certain transactions authorised for a defined purpose. In France the request is made to the Treasury, and the file must describe the operation, the parties and the safeguards precisely. Obtaining a licence is often more urgent for the business than the outcome of an annulment action, because it unblocks payment and performance while the challenge runs its course.

Can a contract concluded before the designation be performed?

Sometimes, but never without prior authorisation. Sanctions regimes provide for derogations, in particular for the performance of contracts concluded before the designation, and applications are lodged with the competent national authority, in France the French Treasury. Two lessons from practice. File early and in a single batch, since an isolated request is processed as slowly as a complete file. And document each item as if it were to be audited, with the contracts, the invoices and the identity of the beneficiaries, since a summary application invariably comes back with a request for further information. Processing takes weeks, which means anticipating contractual deadlines rather than reacting to a payment incident.

My bank is blocking a payment although I am not designated: what should I do?

This is the most frequent situation, and it is not a sanctions dispute as such. The bank applies an internal risk policy, often stricter than the applicable law, and blocking costs it nothing whereas executing the payment exposes it. The effective approach is to obtain the precise reason in writing, whether a name match, alleged indirect ownership, the country of destination or the nature of the goods, and then to put together a documented file to clear the doubt, with an up-to-date shareholding structure, certificates, contracts and export licences, addressed to the compliance department rather than to the branch. A reasoned formal notice unblocks a large number of situations without any need for a court.

How do American sanctions affect a French company?

Through the extraterritorial reach of certain American programmes, which can catch dollar payments, goods and technology of American origin, and persons subject to United States jurisdiction. A French company can therefore face an obligation under one legal order and a prohibition under the other, and Regulation 2271/96, the blocking statute, restricts compliance with certain listed American measures. The way out is rarely a pure legal argument: it is a transaction structure that avoids the conflict, designed before the contract is signed.

Is an “OFAC clause” valid in France?

Not as usually drafted. Regulation (EC) No 2271/96, the Blocking Statute, prohibits European operators from complying with the US laws listed in its annex, and a clause obliging the French party to apply those laws amounts to imposing on it what Union law forbids. The Court of Justice held on 21 December 2021, in Bank Melli Iran v Telekom Deutschland, that the Regulation may be relied on in a dispute between private parties. The clause must therefore be drafted asymmetrically: it may bind the party subject to US law without committing the European party.

What should contracts provide to limit the risk?

Three provisions, and they are negotiated in calm conditions. A compliance clause providing for suspension of performance, not automatic termination, where a measure makes performance legally impossible: terminating in a hurry is often wrongful and opens a commercial dispute that will outlive the sanctions. A clause allocating the costs of a blockage, such as storage charges, demurrage and immobilisation, failing which they fall on the most exposed party. And a reciprocal obligation to provide information on the ownership structure and on any change of control, which gives a contractual basis for demanding documents at the moment they are needed. These three clauses fit in a single paragraph and change the position completely in a crisis.

Matters in this area are handled by Hervé Guyader, avocat at the Paris Bar and Doctor of Law. Page updated on 17 October 2026.