This eighteen-page practical guide explains how a French company becomes answerable to Washington, and how to protect itself. It is written for exporting mid-sized and small companies, their executives, legal departments and export managers, and their advisers.
It maps the five connecting factors of US jurisdiction and seven families of risk (FCPA, OFAC sanctions, export controls and ITAR, the CLOUD Act, customs), sets out the limits recognised by US case law, assesses the European and French counter-measures, and gives the steps to take in six urgent situations and the six contract clauses that make the difference. August 2026 edition.
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Further reading
- OFAC and extraterritoriality: can a French company be sanctioned?
- Export agents and intermediaries: managing bribery risk under Sapin II
- Foreign investment control in France: thresholds, sectors, timescales
- International Trade Lawyer in Paris
Frequently asked questions
Can a French company with no presence in the United States really be caught?
Yes, and this is the most costly misunderstanding. The connection requires neither a subsidiary nor an employee on US soil: it is built on elements that most finance departments regard as neutral, such as a dollar-denominated payment passing through a correspondent bank, the use of an email service or server hosted in the United States, the presence of a component or licence of US origin in a product, or ownership by an American investor. Each of these elements is enough, depending on the statute relied on, to found jurisdiction. In practice, an exposure map is not drawn up by listing locations but by following flows: invoicing currency, banking chain, technological origin of components, location of data. It is this work, rarely carried out in calm times, that reveals the real vulnerabilities.
A US authority is asking me for documents: what does French law say?
It prohibits it, and the text is an old one. Article 1 of Law No. 68-678 of 26 July 1968, as amended by the law of 16 July 1980, prohibits any person of French nationality or habitually resident in France, and any director, representative, agent or employee of a legal person having its registered office or an establishment there, from communicating to foreign public authorities documents and information of an economic, commercial, industrial, financial or technical nature, subject to international treaties and agreements. Article 1 bis extends the prohibition to requesting and seeking such documents for foreign proceedings. Article 2 also requires the competent minister to be informed without delay as soon as a request is received. This is not an option but a legal obligation.
What is the risk of sending documents spontaneously in order to cooperate?
A criminal offence, on top of the strategic risk. Article 3 of the 1968 law, in the wording in force since 1 January 2002, punishes any breach of articles 1 and 1 bis with six months’ imprisonment and a fine of 18,000 euros, or one of these two penalties only, without prejudice to heavier penalties provided by law. The amount seems modest compared with the settlements concluded across the Atlantic, but that is not where the stakes lie. A spontaneous disclosure hands the foreign regulator the material that will found its jurisdiction and its negotiation, weakens the company’s position in any later discussion, and deprives the French State of the possibility of channelling the request through mutual legal assistance. The reflex of immediate cooperation is almost always the wrong one.
My European partner is relying on US sanctions to terminate the contract: is it entitled to do so?
Not freely. Regulation (EC) No 2271/96, known as the Blocking Regulation, prohibits EU operators from complying with the US laws and measures it lists. In its Grand Chamber judgment of 21 December 2021, Bank Melli Iran v Telekom Deutschland, Case C-124/20, ECLI:EU:C:2021:1035, the Court of Justice held that this prohibition applies even in the absence of any order from a US authority, and that a termination without reasons may lead the national court to infer that the operator complied with those measures, the burden of proof then being shifted. The Court also accepted that the termination may be deprived of effect, subject to a proportionality review in the light of the freedom to conduct a business. Opportunistic termination is therefore no longer risk-free.
Does the Blocking Regulation really protect, or is it a text for show?
Both, and the nuance can be argued. Bank Melli gave it concrete scope: a partner that terminates without explanation now risks having to justify its decision before the national court, which changes the balance of the negotiation well before any litigation. But the Regulation does not remove the real economic risk borne by the party that refuses to comply, and it itself provides for the possibility of being authorised to comply where refusal would seriously damage the operator’s interests. The useful strategy is therefore less to brandish the text than to use it as a documented lever: write, ask for the reasons for the termination, point out the prohibition, keep a record of the replies. It is these exchanges that will make the difference if the matter comes before a court.
My bank is refusing a dollar payment without citing any text: what should I do?
This is the most common situation, and it is handled as a compliance file rather than as a sanctions dispute. The bank is applying an internal risk management policy, often more restrictive than the applicable law, and the refusal is not reasoned because, commercially, it does not have to be. The approach that works is to ask in writing for the precise reason, then to produce a documented file (identity and ownership structure of the beneficiary, nature and origin of the goods, export licences, contracts), addressed to the compliance department rather than the branch. Two alternatives deserve to be considered in parallel: changing the invoicing currency, which removes the correspondent banking chain, and opening a relationship with a bank with less US exposure.
Should one reply through mutual legal assistance rather than directly?
That is precisely the architecture intended by the 1968 law. The reservation of international treaties and agreements in its article 1 means that transmission remains possible when it goes through the treaty channel, that is to say a State-to-State request for assistance examined by the French authorities. This route has three advantages that direct transmission loses. It filters the request, whose scope is often broader than what the foreign authority can obtain. It protects the company, which carries out a decision of the French authorities instead of committing an offence. And it allows for a timetable, whereas direct pressure always aims at urgency. Informing the competent minister without delay, as required by article 2, is the starting point of this route.
What internal organisation actually reduces exposure?
Three workstreams, in this order. First, a map of flows rather than entities: invoicing currencies, correspondent banks, origin of components and software licences, location of data, shareholding. Next, a carefully drafted contract clause that anticipates the designation of a counterparty and the bank’s reaction, providing for suspension rather than automatic termination, a fallback currency and the allocation of blocking costs, failing which these questions are settled in a hurry and to the detriment of the most exposed party. Finally, a written protocol for receiving foreign requests, known to executives and to the finance and legal departments, which sets out who is alerted, within what time the competent minister is informed, and the formal prohibition of any direct communication. This protocol is valuable above all because it exists before the first request.
While the guide is on its way, the related analysis is freely available: Extraterritorial reach of US law: the six points that determine the validity of your international flows.