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.

The 21st Package of European Sanctions Against Russia and Belarus: Between Judicial Protection for European Operators and the Assertion of Ever-Broader Extraterritoriality

Adopted on July 23, 2026, by the Council of the European Union, the 21st sanctions package against Russia and Belarus contains innovative and strong measures that symbolize the evolution of European sanctions law: protection for European operators against proceedings initiated in Russia, reaffirmation of the extraterritoriality of European sanctions, autonomous categories of sensitive goods and technologies subject to export controls, and the development of enhanced export controls to third countries, heavily inspired by U.S. export control regimes.

New US tariffs under Section 301 (forced labour) on European exports cannot be combined with those under the Turnberry Agreement 

Since 24 July, the United States has been applying new additional import duties, based on Section 301 of the Trade Act of 1974, to goods originating in 60 countries , which the US administration accuses of failing to ban imports of products made using forced labour or, in some cases, of failing to effectively enforce such a ban, even though it exists. For products originating in the European Union, the additional duty is calibrated to bring the cumulative rate of the most-favoured-nation duty and the new Section 301 duty to 10 per cent. The measure effectively replaces the temporary duties under Section 122 of the same Act, which were also set at 10 per cent and were due to expire on the same day.

Foreign Investment Screening: The European Union Strengthens and Harmonises Its Framework

Against a backdrop of increased scrutiny of foreign investment within the European Union, Regulation (EU) 2026/1386 replaces the framework established in 2019. While it does not create a single EU-level authorisation procedure, it further harmonises national screening mechanisms and broadens the range of transactions that may be subject to review.