Sanctions 2026 Comparisons

The Czech Republic implements a comprehensive system of sanctions through a dual-framework legal system that combines international obligations with autonomous national measures. Under this legal framework, sanctions are systematically divided based on their target and scope into two primary categories: personal (individual) sanctions and sectoral sanctions.

Personal Scope

Compliance with international and national sanctions is mandatory for a broadly defined group referred to as "Czech persons". This includes:

• the Czech Republic (as a state and its public authorities);
• citizens of the Czech Republic, regardless of their actual place of residence;
• foreign nationals habitually residing in the territory of the Czech Republic (typically residing for 183 or more days in a calendar year);
• foreign nationals with permanent or temporary residence status in the Czech Republic; and

• legal entities with their registered office in the Czech Republic (including local government units, corporations, and branches of foreign entities registered in the Czech Republic).

Territorial Scope

Administrative and criminal offences are assessed and prosecuted even when committed by a Czech person abroad. Therefore:

• a Czech citizen living or working in a foreign jurisdiction remains fully bound by Czech and EU sanctions;
• Czech legal entities must ensure that their foreign branches, representative offices, and employees operating outside the Czech Republic comply with the sanctions; and
• any transaction that is partially conducted within or directed from the Czech Republic, or that involves Czech financial institutions, falls within this jurisdiction even if the main performance occurs entirely outside Czech territory.

EU Sanctions Scope

Moreover, the EU sanctions regulations are directly applicable in the Czech Republic, and their territorial scope applies as well, namely:

• within the territory of the EU (including its airspace);
• on board any aircraft or vessel under the jurisdiction of a member state;
• to any person inside or outside the territory of the EU who is a national of a member state;
• to any legal person, entity, or body, inside or outside the EU, which is incorporated or constituted under the law of a member state; and
• to any legal person, entity, or body in respect of any business done in whole or in part within the EU.

Implications

Consequently, Czech parent companies may be held liable if they fail to prevent their foreign-incorporated subsidiaries from engaging in activities that circumvent EU sanctions, particularly if the decision-making or facilitation occurred within the EU or at the Czech parent company.

Sanctions in force in the Czech Republic comprise both autonomous national measures (personal sanctions) and those adopted pursuant to United Nations and European Union legislation.

The enforcement of international sanctions is structured around a co-ordinated dual-track system, distinguishing between administrative (regulatory) and criminal enforcement.

Administrative and Civil Enforcement

The FAU is the primary authority responsible for administrative enforcement and overall co-ordination. To enforce compliance, the FAU is authorised to impose administrative and/or coercive fines. Other specialised administrative authorities enforce sanctions within their specific domains as mentioned in 2.1 Primary Regulators.

Criminal Enforcement

Criminal enforcement is triggered when a violation constitutes a criminal offence. The Police of the Czech Republic, specifically the National Centre for Combating Organised Crime (NCOZ), investigate these offences. In some cases of export restriction, the Customs Administration is largely involved. The Public Prosecutor's Office is responsible for prosecution, whilst the final determination of guilt and sentencing is reserved exclusively for the Czech criminal courts.

Under the Czech Criminal Code, breaching international sanctions is a criminal offence both when committed intentionally or with gross negligence. The severity of the penalty depends on the scale, the nature of the sanctioned items, and the consequences of the conduct.

Individuals

Potential penalties include imprisonment for up to eight years for the most severe aggravated offences or disqualification (prohibition of professional activities). In parallel, the court can seize all assets or gains generated by the offender in connection with the breach.

Legal Entities

Companies can also be held criminally liable if the offence was committed in their interest or within the scope of their activities by management or employees.

If found guilty, a court may impose one or more of the following corporate penalties:

• Dissolution of the legal entity;
• Forfeiture of property;
• Pecuniary Penalty reaching a maximum of CZK1.46 billion;
• Forfeiture of assets or goods used in or acquired through the breach;
• Prohibition on specific business activities for one to twenty years;
• Prohibition of participation in public procurement for one to twenty years;
• Prohibition of receiving grants and subsidies; and

• Publication of the judgment in the media at the entity's expense.

Although the respective state bodies have the duty to publish decisions on administrative offences of sanctions breach on their websites, there are no particular decisions published by the FAU so far. Though the FAU includes a chapter on international and national sanctions regulation in its annual reports, no specific figures or proceedings are mentioned; rather, the chapter describes a general approach, trends and goals. It should be noted that, in recent years, the FAU's focus has been primarily on mapping and freezing assets subject to sanctions, rather than on enforcement action under personal or sectoral sanctions regimes.

Administrative proceedings are not public before the decision is final and binding. There are several pending administrative proceedings related to breaches of sanctions, but their outcome cannot be predicted and is subject to appeal and possible court review.

Scope of administrative authorities' competence

There is a landmark decision of the Supreme Administrative Court of the Czech Republic published in October 2025 on frozen assets in connection with the sanctioned ultimate beneficial owner stating that:

• the administrative authority is not empowered to review the reasons for the listing (or continued listing) of persons subject to sanctions; and
• when assessing whether specific assets indeed belong to a sanctioned person, the administrative authority takes into account the circumstances of the sanctions imposed as well as the broader context of known practices used to circumvent them.

Indirect listed UBO as a reason for subsidy denial

An internationally relevant court decision was adopted by the Municipal Court in Prague in September 2024 interpreting the indirect control of a listed person in a case related to receiving state subsidies. The court confirmed an administrative decision on denial of subsidies to a company of Strabag Group in the specific case, referencing to a share indirectly owned by Mr Deripaska, regardless of the amount of his indirect share and mitigation measures taken by Strabag Group in this regard.

Only a limited number of court decisions relating to sanctions violations have been handed down thus far. A significant proportion of cases remain at the investigation or pre-trial stage and are unlikely to come before the courts for several years. The principal reason for this is the need for international judicial cooperation, which inevitably prolongs criminal proceedings.

The Only Known Final and Binding Decision

The first case in which an individual was finally convicted by the Czech courts for breaching international sanctions dates from summer 2024 and involved a businessman who attempted to export three luxury cars illegally to the Russian Federation. He received a fine of CZK 300,000 together with a ban on certain activities; the court also ordered the forfeiture of assets obtained through the criminal conduct.

Other Ongoing Investigations

Other ongoing cases concern exporters of various machinery and engineering products who are under investigation, or have been charged, for circumventing anti-Russian sectoral sanctions by routing exports through third countries.

While Czech law lacks a formal “voluntary self-disclosure” mechanism guaranteeing immunity, several statutory measures serve to lessen or avoid liability.

Individuals

Individuals can reduce penalties in administrative proceedings through active repentance and damage mitigation, voluntary disclosure and active cooperation with the FAU as well as by proving that the breach occurred under duress, threats, or employee subordination.

Mitigating factors in criminal law include first-time offences, legal error, minor harm, voluntary remediation, self-reporting and co-operation. Crucially, the active repentance is not applicable for sanctions breaches under the criminal law. However, general sentencing principles grant courts broad discretion to lower penalties based on post-offence cooperation and remediation.

Legal Entities

Legal entities can avoid liability in administrative proceedings using the “due diligence” exculpation defence by proving they exerted all reasonably required effort to prevent the breach via robust compliance programmes. This defence is not applicable if it is established that the entity failed to perform mandatory supervision. Alternatively, the FAU may establish a “protective shield” to maintain business operations under strict conditions, often involving an independent controller.

The cornerstone defence in criminal law relieves an entity of liability if it deployed all reasonable efforts to prevent the crime, requiring an active, tailored criminal law compliance programme. If liability is established, penalties may be mitigated if the entity implemented effective preventive and post-crime corrective measures.

Broader Mitigation Mechanisms in Administrative Proceedings

Both individuals and legal entities can utilise prior exemptions from sanctions regimes for humanitarian or economic reasons.

Administrative bodies may entirely refrain from imposing penalties if prosecution alone suffices for reformation. Conditional dismissal is also available, subject to timely damage compensation.

Administrative authorities may also impose extraordinary fine reductions below the statutory minimum, provided the final fine is at least one-fifth of the statutory minimum.

In criminal law, strict liability is entirely excluded for both individuals and corporations. In administrative law, strict liability applies exclusively to legal entities and individual entrepreneurs, whilst individuals are always subject to a fault-based regime. Even where strict liability applies to legal entities and individual entrepreneurs in administrative and civil matters, it is almost always tempered by statutory exculpation defences, meaning absolute liability is rare.

Czech legislation provides for derogations on a case-by-case basis, generally referring to the admissibility of derogations under the respective sanctions regime – primarily the directly applicable EU sanctions regime – and setting out general grounds for derogations, such as health and humanitarian reasons, social payments, payment of salaries, damages, and other payments arising from non-sanctioned legal grounds. In practice, the relevant EU sanctions regimes serve as the material grounds for derogation.

In its recent annual reports, the FAU mentions that licensed derogations predominantly concern the pharmaceutical sector, energy (in particular nuclear) sector and the sale of Czech real estate by Russian owners.

Along with the directly applicable EU sanction regulations, provision of legal services to designated persons is not prohibited when strictly necessary:

• for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy; and
• to ensure access to judicial, administrative or arbitral proceedings in a member state.

In other cases, such as transaction-related legal advice, provision of legal services may be deemed not only as a breach of international sanctions, but also as a breach of AML duties, which require sanctions screening as one of the cornerstones.

No specific provisions of Czech law impose further prohibitions on the circumvention of sanctions beyond those set out in EU legislation, which is directly applicable in its entirety in the Czech Republic

Circumvention of sanctions under the EU regulations is treated as a breach of international sanctions per se, ie, as a breach of any other restriction under the EU sanctions regulations.

Arguably, the newly introduced criminal offence of breaching sanctions by negligence does not cover the negligent circumvention of EU sanctions, as the relevant anti-circumvention provisions of the EU sanctions require indirect intent within the meaning of Czech criminal law. Given that the criminal offence of breaching sanctions by negligence was introduced with effect as of 1 January 2026, this conclusion may be subject to a different interpretation in Czech court practice.