Practical and legal implications in France following the EU harmonization of enforcement and penalties for sanctions violations

On 24 April 2024, the EU adopted a new directive (Directive (EU) 2024/1226 of the European Parliament and of the Council) which establishes EU-wide rules for defining criminal offences and penalties related to the violation of EU sanctions (the "Directive"). Member States are required to implement the Directive into national law by 20 May 2025.

French law already has comprehensive criminal offences in place to punish violations of EU sanctions (see Article 459 §1bis of the Code des douanes (the French "Customs Code"). Therefore, the need for implementation of the Directive in French law can be considered moderate overall.

Irrespective of a possible tightening of the already strict French criminal law with regard to EU sanctions, it is to be expected that French authorities will become increasingly aware of EU sanctions issues in the course of implementation in France and other Member States. We expect that the pressure from investigating authorities to prosecute will continue to increase over the next months and years.

In detail:

In a compliant manner with the Directive, Article 459 §1bis of the Customs Code already specifically provides for criminal penalties for contravention "of any measures restricting economic and financial relations provided for by EU regulations […]".

With respect to penalties applicable to natural persons, French law is very close to the requirements of the Directive, since a minimum maximum sentence of 5 years imprisonment and the additional penalties mentioned in the Directive already apply. French law is also already compliant as regards the possibility for legal persons to be held liable for an offence committed on their behalf by their representatives.

Nevertheless, it is clear that there is a need for implementation in French law with regard to the level of fines that can be imposed on companies since so far, French law has only set a minimum limit of up to five times and a maximum limit of up to ten times the amount of the corresponding fine for natural persons, which may in some cases prove to be significantly lower than required by the Directive for certain offences.

Even if it appears that the criminal provisions of French law already cover a wide range of EU sanctions, the legislator will have to carefully review the current French criminal law. This is also necessary in order to meet specific requirements, such as criminal liability for serious negligence (which is not provided for under French law), at least where that conduct relates to items on the EU Common Military List or to dual-use items. In this respect, a tightening of French criminal law seems possible.

Penalization of the circumvention of EU sanctions is already provided for in Article L. 574-3 of the French Monetary and Financial Code with respect to "freezing of assets and prohibition on making assets available" (the penalties being those provided under Article 459 §1 of the Customs Code). Nevertheless, the broader Article 459 §1 bis of the French Customs Code only penalizes the fact to "contravene" EU sanctions, which may be regarded as insufficiently precise.

The implementation of the Directive, particularly on the issues of fines applicable to legal persons and serious negligence, would allow Article 459 §1bis of the French Customs Code to be redrafted so as to introduce further clarity regarding the circumvention issue.

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