Sanctions 2024 Comparisons

France implements both individual sanctions, targeting natural and legal persons, and sectoral sanctions, decided at the UN, EU and national levels.

Individual sanctions include travel bans and freezing of assets, and sectoral sanctions include embargoes and other restrictions on the export and import of certain goods.

The scope of sanctions applied by France as an EU Member State can be considered quite broad (although less broad than the scope of US sanctions, for example, because the EU does not apply secondary sanctions) as EU sanctions must be complied with in all the following cases:

• by anyone present in the territory of the EU, including its airspace;
• by anyone on board any aircraft or any vessel under the jurisdiction of an EU Member State;
• by all nationals of an EU Member State, even when outside of the territory of the EU;
• by any legal person, entity or body, inside or outside the territory of the EU, which is incorporated or constituted under the law of an EU Member State; and
• by any legal person, entity or body in respect of any business done in whole or in part within the EU.

In France, sanctions are imposed at three different levels:

• National: France has two different sanctions regimes of its own, in the areas of counterterrorism (Article L. 562-2 of the French Monetary and Financial Code) and defence of the national interest (Article L.151-2 of the Monetary and Financial Code), under which it can impose asset freezing, restrictions on transactions and embargoes.
• EU: As an EU Member State, France is bound by the restrictive measures decided by the Council of the EU, which concern either natural or legal persons subject to sanctions such as asset freezing or travel bans, or sectors of activity (eg, finance or fertilisers).
• UN: As an EU Member State and member of the UN Security Council, France is also bound by the restrictive measures decided at the UN level, which, like the EU’s, relate either to a geographical area, targeting natural persons and legal entities, or to themes such as nuclear non-proliferation.

In the EU, Member States are responsible for enforcing the sanctions created by the Council.

In France, the authorities responsible for enforcing all sanctions applied by France are the French Treasury, the Directorate General for Enterprise and the French Customs.

At the French Level

Article 459 of the French Customs Code criminalises having “contravened or attempted to contravene the laws and regulations governing financial relations with foreign countries, either by failing to comply with reporting or repatriation obligations, or by failing to observe prescribed procedures or formalities, or by failing to obtain the required authorisations or to meet the conditions attached to such authorisations”, and “contravening or attempting to contravene measures restricting economic and financial relations provided for by Community regulations adopted pursuant to Article 75 or 215 of the Treaty on the Functioning of the European Union or by international treaties and agreements duly approved and ratified by France”.

These provisions encompass the breaching of sanctions as a criminal offence, whether the sanction comes from the French national sanctions regimes or from those ratified by France, ie, from the EU and UN.

Article 459 also provides for the criminalisation of incitement, by means of writing, propaganda or advertising, to commit one of the offences referred to above, whether or not the incited offence is actually carried out.

Potential penalties for breaching sanctions, for natural persons are:

• five years’ imprisonment;
• confiscation of the corpus delicti;
• confiscation of the means of transport used to commit the offence;
• confiscation of property and assets that are the direct or indirect proceeds of the offence; and
• a fine equal to at least the amount and at most twice the amount of the offence or attempted offence.

Incitement to breach sanctions is punished by five years’ imprisonment and a fine of between EUR450 and EUR225,000.

Legal persons risk:

• dissolution;
• a permanent ban, or a ban for a maximum of five years, on directly or indirectly exercising one or more professional or social activities;
• placement, for a maximum of five years, under judicial supervision;
• permanent closure, or closure for a maximum of five years, of one or more of the establishments of the company used to commit the offence;
• permanent exclusion from public contracts or exclusion for a maximum of five years;
• a ban, either permanently or for a maximum of five years, on making a public offer of financial securities or on having their financial securities admitted to trading on a regulated market;
• a ban, for a maximum of five years, on issuing cheques other than those enabling the drawer to withdraw funds from the drawee or those that are certified, or on using payment cards;
• publication of the decision either in the written press or by any electronic means of communication to the public;
• a ban, for a period of up to five years, on receiving any public aid allocated by the State, local authorities, their establishments or groupings, as well as any financial aid paid by a private person entrusted with a public service mission; and
• confiscations.

Article 459 specifies that “where, for any reason whatsoever, the objects liable to confiscation have not been seized or are not represented by the offender, or where the Minister for the Budget or his representative so requests, the Court must, in lieu of confiscation, order payment of a sum equal to the value of these objects”.

At the EU Level

In April 2024, the EU adopted Directive (EU) 2024/1226, which created the European criminal offence of violation of sanctions. In particular, Article 3 of the Directive provides for the following punishable behaviours:

(a) making funds or economic resources available directly or indirectly to, or for the benefit of, a designated person, entity or body in violation of a prohibition that constitutes a Union restrictive measure;

(b) failing to freeze funds or economic resources belonging to or owned, held or controlled by a designated person, entity or body in violation of an obligation that constitutes a Union restrictive measure;

(c) enabling designated natural persons to enter into, or transit through, the territory of a Member State, in violation of a prohibition that constitutes a Union restrictive measure;

(d) entering into or continuing transactions with a third State, bodies of a third State or entities or bodies directly or indirectly owned or controlled by a third State or by bodies of a third State, including the award or continued execution of public or concession contracts, where the prohibition or restriction of that conduct constitutes a Union restrictive measure;

(e) trading, importing, exporting, selling, purchasing, transferring, transiting or transporting goods, as well as providing brokering services, technical assistance or other services relating to those goods, where the prohibition or restriction of that conduct constitutes a Union restrictive measure, also if committed with serious negligence, at least where that conduct relates to items included in the Common Military List of the European Union or to dual-use items listed in Annexes I and IV to Regulation (EU) 2021/821;

(f) providing financial services or performing financial activities, where the prohibition or restriction of that conduct constitutes a Union restrictive measure;

(g) providing services other than those referred to in point (f), where the prohibition or restriction of that conduct constitutes a Union restrictive measure;

(h) circumventing a Union restrictive measure by:

• using, transferring to a third party, or otherwise disposing of, funds or economic resources directly or indirectly owned, held or controlled by a designated person, entity or body, which are to be frozen pursuant to a Union restrictive measure, in order to conceal those funds or economic resources;
• providing false or misleading information to conceal the fact that a designated person, entity or body is the ultimate owner or beneficiary of funds or economic resources which are to be frozen pursuant to a Union restrictive measure;
• failure by a designated natural person, or by a representative of a designated entity or body, to comply with an obligation that constitutes a Union restrictive measure to report to the competent administrative authorities funds or economic resources within the jurisdiction of a Member State, belonging to, owned, held or controlled by them; or
• failing to comply with an obligation that constitutes a Union restrictive measures to provide the competent administrative authorities with information on frozen funds or economic resources or information held about funds or economic resources within the territory of the Member States, belonging to, owned, held or controlled by designated persons, entities or bodies and which have not been frozen, where such information was obtained in the performance of a professional duty; and

(i) breaching or failing to fulfil conditions under authorisations granted by competent authorities to conduct activities which, in the absence of such an authorisation, amount to a violation of a prohibition or restriction that constitutes a Union restrictive measure.

Concerning penalties faced by natural persons, Article 5 of the Directive leaves some leeway to EU Member States but gives several indications concerning minimum levels of fine and terms of imprisonment, from one year to five years, as well as maximum terms of three years, depending on the offence committed.

It also provides for accessory criminal or non-criminal penalties or measures, which may include the following:

• fines that are proportionate to the gravity of the conduct and to the individual, financial and other circumstances of the natural person concerned;
• withdrawal of permits and authorisations to pursue activities that resulted in the relevant criminal offence;
• disqualification from holding, within a legal person, a leading position of the same type used for committing the criminal offence;
• temporary bans on running for public office; and
• publication of all or part of the judicial decision.

Concerning legal persons, Article 7 of the Directive provides for the following potential penalties:

• exclusion from entitlement to public benefits or aid;
• exclusion from access to public funding, including tender procedures, grants and concessions;
• disqualification from the practice of business activities;
• withdrawal of permits and authorisations to pursue activities that resulted in the relevant criminal offence;
• placement under judicial supervision;
• judicial winding-up;
• closure of establishments used for committing the criminal offence; and
• where there is a public interest, publication of all or part of the judicial decision relating to the criminal offence committed and the penalties or measures imposed, without prejudice to rules on privacy and the protection of personal data.

Concerning fines, the Directive provides for minimum levels depending on the offence committed.

Although France’s legal system already criminalises the breaching of sanctions, it is likely that it will implement the wording of this new Directive in its own law, in order to make sure it complies perfectly with the Directive. It must do so within 12 months following its adoption, ie, before the end of April 2025.

Article 132-78 of the French Criminal Code provides for two mitigating circumstances that are applicable only to certain offences, when provided by law, namely:

• an instigator of an offence who attempted to commit the offence but alerted the administrative or judicial authorities, and therefore prevented it from being committed and, where applicable, made it possible to identify the other perpetrators or accomplices, is exempt from punishment; and
• the sentence will be reduced when the perpetrator of an offence committed notified the administrative or judicial authority and thus made it possible to put a stop to the offence, or to prevent the offence from causing damage, or to identify the other authors or accomplices.

At the EU level, Article 9 of Directive (EU) 2024/1226 provides for two different mitigating circumstances, and requires that Member States implement at least one in their legal system:

• when the offender provides the competent authorities with information they would not otherwise have been able to obtain, helping them to identify or bring to justice the other offenders; and
• when the offender provides the competent authorities with information they would not otherwise have been able to obtain, helping them to find evidence.

As French law is reluctant to take mitigating circumstances into account in general, and already provides for the first mitigating circumstance required by the Directive whereas the second one is a lot broader, it is likely France will not amend its law on this point.

Violations of sanctions, as provided by Article 459 of the French Customs Code cited above, are what is referred to in French law as formal offences, which, as opposed to material offences, are constituted by the mere characterisation of the behaviour, without the prosecution having to prove the underlying intent to actually violate sanctions. The French sanctions regimes therefore operate on the basis of strict liability.

Directive 2024/1226 of last April will not change this, as it also provides for such formal offences and therefore also operates on the basis of strict liability.

France applies the derogations provided by the Council of the EU’s Decisions and Regulations in its different sanctions regimes.

Currently, most of the sanctions-related matters concern Russia. In this regard, Council Decision 2014/145/CFSP and Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine provide for several derogations to its sanctions, including:

• the sale, supply, transfer or export of dual-use goods and technology or the provision of related technical or financial assistance, for non-military use and for a non-military end user, when such goods or technology or the related technical or financial assistance are either intended for co-operation between the Union, the governments of Member States and the government of Russia in purely civilian matters, or intended for intergovernmental co-operation in space programmes;
• the provision of insurance or reinsurance after 20 June 2024 to any legal person, entity or body that is incorporated or constituted under the law of a Member State with regard to its activities outside the energy sector in Russia;
• the provision of financial assistance when necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment; and
• the authorisation for an aircraft to land in, take off from, or overfly, the territory of the Union for humanitarian purposes.

Such derogations must be requested by the persons seeking them to the national competent authorities, ie, the French Treasury, the Directorate General for Enterprise or the French Customs, depending on the derogation sought.

By adopting Council Regulation (EU) 2022/2474 of 16 December 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, the Council of the EU adopted a general prohibition of legal services to the Government of Russia or legal persons, entities or bodies established in Russia, as enshrined in Article 5(n)(2) of Regulation 833/2014.

However, at the time, it already provided for some derogations, and others were added by Council Regulation (EU) 2023/1214 of 23 June 2023 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine. The most common ones can be found at paragraphs 5, 6, 9(a) and 9(b) to Regulation 833/2014 and are:

• the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy;
• the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State; and
• the provision of services that are strictly necessary for the setting up, certification or evaluation of a firewall which removes the control by a sanctioned natural or legal person, over the assets of a non-listed legal person, entity or body incorporated or constituted under the law of a Member State which is owned or controlled by the former, as long as no further funds or economic resources accrue to the benefit of the listed natural or legal person, entity or body.

It is to be noted that an action for annulment has been initiated by the Ordre des Avocats à la cour de Paris, filed on 29 December 2022, in which the Geneva Bar intervened afterwards (it bears the case number T-798/22). The decision is strongly awaited by European legal practitioners, who deem this general prohibition on legal services as an infringement of legal professional privilege protected by Article 7 of the Charter of Fundamental Rights of the European Union and the right to be advised by a lawyer protected by the second paragraph of Article 47 of the Charter of Fundamental Rights of the European Union.

Article 459 of the French Customs Code provides for the criminalisation of having “contravened or attempted to contravene the laws and regulations governing financial relations with foreign countries, either by failing to comply with reporting or repatriation obligations, or by failing to observe prescribed procedures or formalities, or by failing to obtain the required authorisations or to meet the conditions attached to such authorisations”, and “contravening or attempting to contravene measures restricting economic and financial relations provided for by Community regulations adopted pursuant to Article 75 or 215 of the Treaty on the Functioning of the European Union or by international treaties and agreements duly approved and ratified by France”.

The Code therefore encompasses circumvention of French, EU and UN sanctions, which are the only sanctions implemented in France.

At the EU level, and since April 2024, the circumvention of EU sanctions is also a criminal offence, pursuant to Article 3(h) of Directive 2024/1226, which details the behaviours targeted:

“(i) using, transferring to a third party, or otherwise disposing of, funds or economic resources directly or indirectly owned, held or controlled by a designated person, entity or body, which are to be frozen pursuant to a Union restrictive measure, in order to conceal those funds or economic resources;

(ii) providing false or misleading information to conceal the fact that a designated person, entity or body is the ultimate owner or beneficiary of funds or economic resources which are to be frozen pursuant to a Union restrictive measure;

(iii) failure by a designated natural person, or by a representative of a designated entity or body, to comply with an obligation that constitutes a Union restrictive measure to report to the competent administrative authorities funds or economic resources within the jurisdiction of a Member State, belonging to, owned, held or controlled by them;

(iv) failing to comply with an obligation that constitutes a Union restrictive measure to provide the competent administrative authorities with information on frozen funds or economic resources or information held about funds or economic resources within the territory of the Member States, belonging to, owned, held or controlled by designated persons, entities or bodies and which have not been frozen, where such information was obtained in the performance of a professional duty.”

As cited in 7.3.1 Prohibiting Provisions, Article 459 of the French Customs Code provides for the criminalisation of circumvention of sanctions, which is punished by the same penalties as for other violations of sanctions.

The same is true of Directive 2024/1226, which also considers circumvention of sanctions as a type of violation of sanctions at its Article 3.