Beyond the ban on sanctions circumvention: an additional due diligence obligation

The forthcoming adoption of the 20th package of sanctions against Russia raises questions not only about the legislative arsenal but also about the increasingly structured enforcement capabilities of national authorities. The broadened definition of circumvention requires companies to exercise greater rigour so they can consistently demonstrate that they have actively sought to avoid indirectly participating in a prohibited transaction.

Alongside the announcement of the 20th sanctions package by the President of the European Commission, Ursula von der Leyen, on Friday 6 February, the means of prosecuting breaches of international sanctions are being strengthened and expanded, in parallel with the legislative framework itself.

At national level, the German Federal Prosecutor’s Office has announced the arrest of five individuals suspected of illegally exporting €30 million worth of prohibited goods to Russia. While the scale of this intentional sanctions‑evasion network is significant enough to attract attention, the cooperation between the customs authorities and the Bundesnachrichtendienst (BND, Germany’s foreign intelligence service) in this investigation illustrates the growing involvement of intelligence services in these matters. In France, the use of traceability and value‑chain reconstruction software by customs authorities also demonstrates the strengthening of technological tools used to repress both intentional and unintentional circumvention flows.

Moreover, Europe’s fight against sanctions violations relies not only on interministerial cooperation but also on international collaboration. The European Anti‑Fraud Office (OLAF) has announced the launch of an investigation into Russian sanctions‑evasion schemes. The investigation, which began in Poland, uncovered a network circumventing sanctions through the alleged export of transport vehicles to Turkey, Armenia, Georgia, Kazakhstan, Kyrgyzstan and Moldova.

Salla Saastamoinen, OLAF’s Acting Director‑General, stated: “Circumventing sanctions undermines the effectiveness of the European Union’s restrictive measures. This investigation shows how cooperation with Member States and third‑country authorities enables OLAF to uncover complex cross‑border schemes and protect the integrity of EU sanctions.”

Defining circumvention and the “undermining” of sanctions

The concept of circumvention is not defined in EU sanctions regulations but in the European Commission’s FAQs, which draw on the definition established by the Court of Justice of the European Union. Circumvention is described as “any activity which, under the guise of a formal appearance allowing it to escape the constituent elements of a prohibition, nevertheless has the object or effect, direct or indirect, of frustrating that prohibition.” Circumvention is contrasted with the notion of “undermining”, which relates to the duty of EU parent companies to ensure the compliance of their controlled foreign subsidiaries. “Undermining” sanctions is defined as an activity “having the effect that the restrictive measures seek to prevent” or, according to the EU Sanctions Helpdesk, actions “that weaken the effect of sanctions, even if they do not directly breach the rules.” The distinction between the two is therefore extremely narrow.

The intent for circumvention and compliance risks

The illustrative examples above of sanctions circumvention should not mislead operators regarding the scope of the intentional element required to establish an offence, nor the uncertainties surrounding its definition. An operator may be sanctioned if they know that their involvement may have the object or effect of circumventing prohibitions and accept that possibility. They do not need to be the originator or architect of the circumvention scheme.

Given that the notion of “participation” is also undefined, operators must be particularly careful about the language they use with third parties when establishing a supply or distribution chain that could involve a prohibited product. Otherwise, they risk being accused of having orchestrated a transaction from a third country. Once again, EU sanctions law is moving closer to US standards, particularly the concept of facilitation, which increasingly requires operators to exercise enhanced due diligence to avoid becoming involved in non‑compliant transaction chains.

CBAM: publication of the first certificate price – what are the concrete implications for importers?

The European Commission published, on 7 April 2026, the first reference price for CBAM certificates applicable to the first quarter of 2026, set at €75.36/tCO₂. This publication marks a key milestone in the gradual implementation of the mechanism, by finally providing an official price signal. It enables operators to anticipate their carbon exposure and adjust their import strategies accordingly.

The Industrial Accelerator Act: a statement for a European industrial strategy

The European Commission’s draft Industrial Accelerator Act (or IAA) marks a turning point in its economic policy, introducing mechanisms to promote ‘Made in the EU’ products and a new requirement for European content.

The personal liability of executives in cases of violation of international sanctions

While compliance with international sanctions is a critical issue for companies, it is equally critical for executives. Indeed, since violating international sanctions constitutes a criminal offense, individuals may be prosecuted personally in the same way as legal entities. While the exclusively professional context does not allow individuals to avoid liability, delegations of authority may, under certain conditions, limit such liability.