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Sanctions Compliance in Germany: A Complex Regulatory Landscape

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Germany’s sanctions and export control regime are deeply embedded in European Union (EU) law, with financial sanctions imposed by the EU and enforced by its member states, including Germany.

EU Sanctions Take Precedence

Sanctions imposed by the EU are implemented through regulations that are directly applicable across all member states, including Germany. These regulations allow individual member states to decide how to enforce measures against violations of EU sanctions in their national laws. In Germany, such violations are governed by:

  • Foreign Trade and Payments Act: regulates export controls and trade restrictions
  • Trade and Payments Ordinance: outlines specific procedures for enforcing EU sanctions

Implementation of UN Sanctions

Germany implements United Nations (UN) sanctions primarily through EU sanctions that apply directly in the country. However, if there is a delay between listing by the UN and applicability in Germany due to the EU’s implementation process, Germany may implement UN sanctions independently based on its:

  • Foreign Trade and Payments Act

Consequences of Non-Compliance

Violations of EU sanctions and German foreign trade law can be punished as criminal or administrative offenses. Intentional violations are considered criminal offenses, while negligent ones are considered administrative offenses.

Who Can Commit Offenses?

Under German law:

  • Individuals: can commit criminal offenses
  • Corporations: may also face liability if the offense was committed by a director or officer or due to inadequate compliance mechanisms

EU Blocking Statute

Germany enforces the EU Blocking Statute, which prohibits compliance with extraterritorial laws adopted by third countries that affect EU entities. The statute views such effects as contrary to international law and can result in penalties for breaches, including:

  • Fines: up to EUR 500,000
  • Forfeit of gains: potential additional penalty

Understanding Sanctions Compliance in Germany

To navigate the complex regulatory landscape surrounding sanctions and export controls in Germany, businesses must ensure they are aware of their obligations and risks to avoid reputational damage and financial penalties.