France, as an EU member state, directly applies EU sanctions regulations and enforces them through a combination of national administrative and criminal mechanisms – making compliance obligations immediate, stringent and subject to continuous legislative updates. Businesses operating in or through France must navigate an increasingly dense framework that includes asset-freeze obligations, export-control licensing, sanctions screening duties and, since mid-2026, new anti-circumvention rules under the EU's 20th and 21st sanctions packages. Ferraz & Whitmore assists international clients in assessing their exposure under French law, structuring compliant operations and responding to enforcement inquiries.
Why Sanctions Compliance Matters Urgently in France Right Now
The pace of EU sanctions legislation has accelerated sharply. The 20th sanctions package was adopted on 23 April 2026 (Council Regulation (EU) 2026/506), introducing – among other measures – an anti-suit protection mechanism: EU persons now have a legal shield against sanctioned Russian persons who initiate proceedings in Russia in breach of contractual jurisdiction clauses or arbitration agreements. The 21st package followed on 23 July 2026 (Regulation (EU) 2026/1848), further expanding the list of restricted items, individuals and entities. Separately, a prohibition on the digital rouble and its tokenised equivalent (RUBx) entered into force on 24 May 2026.
For companies with French subsidiaries, French banking relationships or French-law contracts, each of these changes triggers an immediate obligation to review internal policies, counterparty lists and payment instructions. The best-efforts obligation embedded in EU sanctions law means that ignorance of an update is not a defence recognised by French enforcement authorities.
If your business has any connection to France – a subsidiary, a banking relationship, a supply chain node or a French-law contract – and you have not reviewed your compliance programme against the 20th or 21st packages, the exposure window is already open. Reach out to our team at info@ferrazwhitmore.com or visit our contacts page to arrange a confidential initial discussion.
The French Enforcement Architecture
EU sanctions are directly applicable in France by virtue of their status as EU regulations, requiring no transposition. However, criminal enforcement, administrative supervision and procedural tools are governed by French national rules. Several authorities play distinct roles:
- Direction générale du Trésor (DGT) – the primary competent authority for authorisations, derogations and asset-freeze notifications under EU sanctions regulations.
- Autorité des marchés financiers (AMF) – supervises sanctions compliance within the securities and investment-services sector, including funds and listed vehicles.
- Autorité de contrôle prudentiel et de résolution (ACPR) – oversees credit institutions and insurance undertakings; sanctions screening failures in banking relationships are among the most frequently sanctioned breaches.
- Direction générale des douanes et droits indirects (DGDDI) – enforces export controls and dual-use goods restrictions, with powers to seize goods and refer matters for criminal prosecution.
- Parquet national financier (PNF) – the specialist prosecution office for financial crime, including circumvention of sanctions.
Criminal penalties for circumvention of EU sanctions can be severe under French law. Enforcement proceedings may be initiated in parallel – administrative and criminal – without waiting for one to conclude before the other. Companies and their directors may face personal liability simultaneously.
Core Compliance Obligations for Businesses in France
The practical obligations that flow from EU sanctions law and French enforcement practice can be grouped into four operational areas:
1. Sanctions Screening
Sanctions screening of counterparties, beneficial owners, transaction parties and – following the 21st package – certain categories of goods and services must be conducted before entering into or continuing a transaction. The standard is not limited to name-matching; it extends to ownership and control analysis, including indirect exposure through intermediary entities. French courts have confirmed that screening tools alone are insufficient where red flags were present and ignored.
2. Asset Freeze and Reporting
Where a designated person or entity is identified, French law requires immediate asset freeze and prompt notification to the DGT. Failure to freeze, delay in reporting or any dealing with frozen assets – including providing services that benefit a designated person – may constitute a criminal offence. The asset freeze obligation applies to all assets within France's territory or under the control of French-incorporated or French-resident persons, regardless of the asset's location.
3. Export Controls and Dual-Use Goods
France administers EU export controls through the DGDDI. The 21st package extended restrictions on items with battlefield applications, industrial goods and components linked to Russian defence procurement. Companies involved in manufacturing, logistics or re-export through France – including via free zones – must review their commodity classifications against updated control lists and obtain the necessary licences where required. Failures in this area are frequently discovered during customs audits rather than at the point of transaction, meaning the exposure may have accumulated over many shipments.
4. Anti-Circumvention and Supply Chain Due Diligence
EU sanctions law imposes a best-efforts obligation on EU operators to ensure that their non-EU subsidiaries and trading partners do not engage in activities that would be prohibited if carried out within the EU. In a French context, this means that a French parent company cannot disclaim responsibility for the conduct of its overseas subsidiaries if it had the means to identify and prevent circumvention. Our work on cross-border supply chain matters, including a documented case involving supply chain sanctions issues in Kazakhstan, illustrates how these risks materialise in practice for companies with Central Asian or post-Soviet trade flows.
The Anti-Suit Protection Mechanism: What Council Regulation (EU) 2026/506 Means for French Businesses
One of the most operationally significant changes introduced by the 20th package is the anti-suit protection framework. Council Regulation (EU) 2026/506, adopted on 23 April 2026, grants EU persons the right to seek relief in EU courts against proceedings initiated by sanctioned Russian persons in Russian courts, where those proceedings breach a jurisdiction clause or arbitration agreement governed by EU or member state law.
For French businesses this is directly relevant where contracts with Russian counterparties contain French jurisdiction clauses or Paris arbitration agreements (ICC or otherwise). If a sanctioned Russian counterpart brings an action in a Russian court in breach of such a clause, French courts can now provide procedural protection. Note that Switzerland has adopted a parallel mechanism under its own Article 29d, which may be relevant for groups with Swiss holding structures.
Practically, this means that French businesses holding or facing Russian counterparty claims should immediately review the procedural posture of any pending or threatened dispute, assess whether the anti-suit mechanism applies and take steps to preserve their position before any Russian default judgment is entered.
Enforcement Procedures and Timelines
French civil procedure provides several enforcement tools that intersect with sanctions compliance in enforcement and recovery scenarios:
- The injonction de payer procedure allows creditors to obtain a payment order through a summary judicial process, though its use is subject to the same sanctions screening obligations – a claimant must verify that receiving payment from a counterparty does not itself constitute a dealing with a designated person.
- Enforcement of judgments and arbitral awards is handled by the commissaire de justice (formerly huissier de justice), who is independently required to refuse enforcement steps that would violate sanctions.
- Administrative authorisation requests to the DGT for derogations from freeze obligations (for example, to meet pre-existing contractual obligations or humanitarian needs) are subject to processing timelines that are not publicly standardised but typically require submission of detailed supporting documentation and should be planned well in advance of a transaction.
Timeline management is critical. Sanctions programmes are amended without prior notice – as demonstrated by the 21st package's adoption date of 23 July 2026. Compliance programmes that rely on periodic reviews (quarterly or annually) will routinely miss the window between a package's entry into force and any scheduled review date.
Digital Assets: The Digital Rouble and RUBx Prohibition
From 24 May 2026, EU sanctions prohibit dealings in the digital rouble and its tokenised form, RUBx. French financial institutions, payment service providers, and any French-incorporated entity involved in digital asset settlement, custody or exchange must ensure that their platforms and counterparty onboarding processes include explicit screening for digital rouble exposure. This affects not only dedicated crypto-asset service providers but also treasury operations, correspondent banking relationships and trade finance structures where digital settlement instruments are offered as an alternative to SWIFT-based transfers.
How Ferraz & Whitmore Approaches Sanctions Compliance Mandates in France
Our work in France on sanctions matters draws on both the EU regulatory layer and the specific procedural and enforcement context of French law. A typical engagement involves several stages:
- Exposure mapping – identifying all points at which the client's operations, contracts, banking relationships and corporate structure interact with EU sanctions obligations as applied in France.
- Gap analysis – comparing existing internal controls, screening procedures and governance structures against current regulatory expectations, including updates introduced by the 20th and 21st packages.
- Remediation – drafting or revising compliance policies, sanctions clauses in contracts, internal reporting lines and escalation procedures, with consideration of the specific supervisory expectations of the AMF and ACPR where applicable.
- Ongoing monitoring and advice – providing timely updates on new designations, package amendments and enforcement signals from French authorities, so that the client's compliance programme remains current without requiring the client to monitor primary sources independently.
- Enforcement response – assisting where a client has received an enquiry, inspection notice or investigation referral from the DGT, ACPR, AMF or PNF, including liaison with French counsel and coordination across jurisdictions where group entities in other countries are involved.
Our broader corporate law practice in France provides the structural and contractual context that often underpins sanctions compliance questions – from subsidiary governance to contract drafting and M&A due diligence. Where a client's exposure spans multiple jurisdictions, we can coordinate analysis across offices, including in relation to our sanctions and trade practice in Hong Kong, which is particularly relevant for clients with Asia-Pacific procurement or re-export structures.
Self-Assessment Checklist: Key Questions for Your French Operations
The following questions are not exhaustive but indicate areas where gaps are most commonly identified during initial reviews:
- Has your counterparty screening process been updated to reflect designations introduced in the 20th and 21st EU sanctions packages?
- Do your contracts with Russian or Belarus-connected counterparties contain jurisdiction or arbitration clauses, and have these been reviewed in light of Council Regulation (EU) 2026/506?
- Does your treasury or payments function have explicit controls to prevent dealings in the digital rouble or RUBx?
- Have your French subsidiaries or affiliates reported any frozen assets or designated-person relationships to the DGT?
- Does your supply chain due diligence programme apply a best-efforts standard to non-EU group entities and third-party distributors?
- Is your export classification review current against the goods lists extended by the 21st package?
- Do your compliance policies address the anti-circumvention obligation explicitly, and are staff trained on it?
If any of these questions prompt uncertainty or identify a gap, it is advisable to seek legal advice promptly. The consequences of non-compliance – including criminal exposure for individual officers, administrative penalties and reputational damage – are not contingent on intent under French enforcement practice. Contact our team at info@ferrazwhitmore.com to discuss a structured review of your compliance position.
Cross-Border Dimension and Group Structures
Sanctions compliance in France rarely presents as a purely domestic question. French-incorporated entities frequently sit within international group structures that include holding companies in Luxembourg, the Netherlands or Switzerland; operating subsidiaries in Central Asia, the Gulf or Asia-Pacific; and banking relationships across multiple jurisdictions. Each of these layers introduces its own sanctions compliance requirements, which may interact with – and in some cases contradict – the French and EU framework.
Managing this complexity requires a coordinated approach: a group-level policy that is specific enough to be operationally effective in each jurisdiction, combined with escalation procedures that surface French-law obligations to the group compliance function before a transaction closes rather than after. Ferraz & Whitmore has experience advising on precisely this type of multi-jurisdictional structure and can assist in building a coherent compliance architecture across the group.
To discuss your group's exposure and explore how a coordinated compliance review could reduce your risk profile, write to us at info@ferrazwhitmore.com or visit our contacts page for further details.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.