EU Sanctions and Export Controls

Introduction

EU sanctions and export control have evolved in recent years from a specialized legal domain to a central element in international relations and a crucial risk domain for any internationally active company. Especially since the large-scale invasion of Ukraine in February 2022, the frequency, scope and complexity of restrictive measures imposed by the European Union (EU) have increased exponentially. This evolution requires companies and their legal counsel to take a proactive and integrated compliance approach. For attorneys, this represents a shift from merely advising on trading restrictions to guiding clients in a landscape of heightened enforcement risks, which now include criminal liability.

This contribution provides an up-to-date and in-depth overview. We successively analyze the EU sanctions regime (Part I), the export control regime (Part II), their mutual relationship (Part III), and the defining trends shaping the future of this area of law (Part IV).

Part I: The EU sanctions regime.

1. Definition, role and legal framework

Restrictive measures, or “sanctions,” are an essential tool of the EU's Common Foreign and Security Policy (CFSP). The aim is to bring about a change in policy or behavior in third countries, entities or individuals that undermine the values, fundamental interests, security, independence and integrity of the Union.

The legal basis for EU sanctions is twofold. First, the Council of the EU unanimously adopts a decision under Article 29 of the Treaty on European Union (TEU). This decision establishes the political outline. Next, the economic and financial aspects of this decision are implemented through a regulation, adopted on the basis of Article 215 of the Treaty on the Functioning of the European Union (TFEU). These regulations have direct effect in all member states and do not require national transposition. Some of the EU sanctions regimes serve to implement binding UN Security Council resolutions, although the EU often supplements them with its own, more stringent measures.

The types of sanctions are diverse and can be divided into:

Individual sanctions: These are targeted at specific individuals and entities and mainly include asset freezes and a ban on making funds or economic resources available, as well as travel bans.
Economic and financial sanctions: These have broader, sectoral impacts. Examples include arms embargoes, import and export restrictions on specific goods (e.g., oil, luxury goods, technology), restrictions on access to capital markets, and bans on the provision of certain services such as financial messaging services (e.g., the exclusion of certain Russian banks from SWIFT), advisory services, or IT consulting.
Diplomatic measures: Such as suspending cooperation or severing diplomatic relations.

2. Scope and compliance obligation.

EU sanctions regulations are binding on a broad group of “EU actors.” By default, the compliance obligation extends to :

EU territory.
Aboard any aircraft or vessel under the jurisdiction of a member state.
Any natural person who is a citizen of an EU member state, regardless of where they are located.
Any legal person, entity or body incorporated under the law of a Member State, including their foreign branches.
Any legal person, entity or body as regards any business transaction carried out in whole or in part within the EU.

Unlike U.S. sanctions regimes, EU sanctions in principle have no extraterritorial effect. A non-EU company operating entirely outside the EU is not directly bound by EU regulations. However, recent developments show a trend toward a de facto expansion of the EU's sphere of influence. The introduction of the “no-Russia” clause in the 12th sanctions package against Russia is a telling example. This clause requires EU exporters of certain sensitive goods to contractually stipulate that their trading partner in a third country will not re-export those goods to Russia. A non-EU importer wishing to do business with an EU supplier must accept this clause and thereby becomes contractually bound by a prohibition arising directly from EU sanctions law. While this is not legal extraterritoriality, it projects the effects of EU policy into the legal sphere of third countries and creates a “Brussels Effect” in sanctions compliance.

3. Analysis of core measures

Freezing measures

The most common sanction is the freezing of assets and economic resources. This includes two core obligations :

The freezing requirement: All funds and economic resources belonging to, owned, held or controlled by a sanctioned person or entity (“designated person” or DP) must be frozen. The definitions of “funds” (financial assets) and “economic resources” (any other assets that can be used to obtain funds, goods or services) are very broadly worded.
The posting ban: Making funds or economic resources available directly or indirectly to or for the benefit of a DP is prohibited.

A crucial question in practice is when an entity that is not on the sanctions list is still subject to the measures. This is the case when the entity is “owned” or “controlled” by a DP. The EU guidelines use the “50% rule” for this purpose: an entity is owned by a DP if that DP owns more than 50% of the ownership rights. For “control,” broader, qualitative criteria apply, such as the right to appoint a majority of the board. The European Commission, in its FAQs on the Russian sanctions stated that the 50% rule also requires consideration of the aggregate ownership of multiple, separate DPs (“aggregate ownership”). This interpretation is legally controversial because it is not obvious that several minority shareholders exercise joint control.

Import and export restrictions

In addition to freezing measures, many sanctions regimes, particularly that against Russia, contain extensive import and export restrictions. These prohibit the “direct or indirect” purchase, import, sale or export of specified goods. The Commission interprets the term “transfer” very broadly, including not only the customs transaction but also physical transportation, even if it takes place between two non-EU countries but is facilitated by an EU actor.

For contracts entered into prior to the enactment of a ban, the regulations sometimes provide for a grandfathering clause. However, these exceptions are often limited in time and the Commission applies a strict interpretation of the term “contract,” with framework agreements without specific quantities or prices generally falling outside the exception.

4. Current sanctions regimes: focus on Russia

Currently, there are more than 40 different EU sanctions regimes in place. Some are geographically focused (e.g., Russia, Iran, Syria, North Korea), while others are thematic and target specific behaviors regardless of where they occur (e.g., human rights violations, cyber attacks, terrorism).

The sanctions regime against Russia has been the most dynamic and comprehensive since February 2022. The main evolutions are:

Packages 1-8 (February 2022 - October 2022): The first eight packages, adopted in the immediate aftermath of the invasion, constituted a swift and massive response. The measures included the sanction listing of hundreds of individuals and entities (including President Putin and Foreign Minister Lavrov), the exclusion of major Russian banks from the SWIFT system, a ban on transactions with the Russian Central Bank, and the closure of EU airspace to Russian aircraft. Far-reaching trade restrictions were also introduced, including a ban on imports of coal, steel, gold and timber, and a ban on exports of luxury goods, quantum computers and advanced semiconductors. A crucial step was the introduction of a ban on Russian crude oil imports by sea and the introduction of the legal basis for a G7 oil price cap.
Packages 9-11 (December 2022 - June 2023): These packages focused on closing loopholes, further expanding the lists of goods with export restrictions and adding hundreds of new individuals and entities to the sanctions lists.
Package 12 (December 2023): This package introduced two important novelties: a ban on Russian diamond imports and the already mentioned “no-Russia” clause to prevent circumvention via third countries.
Packages 13-19 (February 2024 - October 2025): The most recent packages show a clear focus on addressing circumvention and increasing economic pressure. Key measures include sanctioning the Russian ‘shadow fleet’ used to circumvent the oil price ceiling, sanctioning third-country entities (such as China, Turkey and the UAE) that supply Russia's military industry, and banning imports of Russian liquefied natural gas (LNG).

5. Practical compliance and risk management

For an effective sanctions policy, companies must have a structured screening process:

Identification of parties: Who are the contracting parties, end users, intermediaries, carriers and financial institutions involved?
Screening of parties: Check all identified parties against the official EU sanction lists.
Analysis of ownership and control: Examine the counterparty's ownership structure to verify that it is not subject to the 50% rule.
Analysis of goods/services: Check whether the goods, technology or services in question are subject to a sectoral sanction or a specific import or export ban.
Geographic analysis: Verify that the transaction has no link to a sanctioned area (e.g. Crimea, Donetsk, Luhansk, Zaporizhzhya and Kherson).

Resources

The EU provides several tools to facilitate compliance:

EU Sanctions Map: This is the central, interactive and official database that provides an overview of all sanctions regimes. Users can filter by country, regime or type of measure (e.g., arms embargo, asset freeze). The tool includes a search function for sanctioned persons and entities and provides direct links to the consolidated legal texts, guidelines and lists.
Consolidated lists: The European Commission and the European External Action Service (EEAS) publish downloadable, consolidated lists of all persons and entities subject to financial sanctions. These files can be integrated into companies' internal compliance systems.
EU sanctions whistleblower tool: This anonymous hotline, established in 2022, allows citizens and organizations to report (suspected) sanctions violations, further increasing enforcement pressure.

The Belgian Context

In Belgium, the General Administration of the Treasury of the FPS Finance is the competent authority for the implementation of financial sanctions. Companies can contact the Treasury for:

Applications for exemptions: In specific cases provided for in the regulations (e.g., payments for basic needs, humanitarian purposes or legal services), a waiver can be requested to release frozen assets.
Cases of identicality: When a name closely resembles that of a sanctioned party (false positive), the Treasury may issue a statement confirming that the party in question is not the sanctioned party.
EU Blocking Statute: The Treasury is co-authorized to follow up on reporting requirements under the EU Blocking Regulation.

Part II: The EU Export Control Regime.

1. Definition, purpose and organization

Export control is a system of rules aimed at controlling the export of specific goods, software and technology that, in addition to having legitimate civilian uses, can also be misused for undesirable purposes. The primary goal is to counter the proliferation of weapons of mass destruction (nuclear, chemical, biological), prevent the build-up of destabilizing military arsenals and protect human rights.

The cornerstone of the EU system is Regulation (EU) 2021/821, better known as the Dual-Use Regulation. This regulation establishes a common regime for the control of exports, brokering, technical assistance, transit and transfers of dual-use items.

2. Control object: goods and technology

The licensing requirement under the Dual-Use Regulation applies to two main categories:

Goods on the List (Appendix I): Annex I of the regulation contains a comprehensive and technically detailed list of goods, software and technology subject to a license requirement when exported outside the EU. This list is updated annually to reflect technological developments and the decisions of multilateral export control regimes (such as the Wassenaar Arrangement and the Nuclear Suppliers Group). For example, the September 2025 update added controls on items related to quantum computing, advanced semiconductors and peptide synthesizers.
Unrecorded goods (‘Catch-all’ clauses): Even if a product is not listed in Annex I, an authorization requirement may apply. This is the case under the so-called catch-all provisions, when the exporter knows or has been informed by the competent authority that the goods are intended (in whole or in part) for a problematic end use, such as :
- A link to chemical, biological or nuclear weapons.
- A military end use in a country under an arms embargo.
- A new and important catch-all provision, introduced in Regulation 2021/821, concerns cybersurveillance technology that can be used for internal repression or serious human rights violations.

3. Impact and licensing system

The export of controlled goods is not necessarily prohibited, but requires a prior authorization from the competent national authority. The regulation provides for different types of authorizations :

Individual permits: For one specific output to one end user.
Global permits: For multiple exports of specific items to multiple end users and/or countries.
Union General Export Authorizations (EUGEAs): These authorizations, listed in Annex II of the regulation, allow the export of certain goods to a list of ‘safe’ destinations (e.g. US, UK, Japan) without individual application, provided strict conditions are met. This significantly eases the administrative burden.

The regulation also places a strong emphasis on exporter responsibility. Having a robust Internal Compliance Program (ICP), with procedures for risk analysis, screening and documentation, is increasingly becoming a de facto prerequisite for obtaining global licenses.

4. Resources and competent authorities in Belgium

Strategic goods licensing authority has been regionalized in Belgium. Companies should apply to the authority of the region where their registered office is located:

Flemish Region: The Service Control Strategic Goods, part of the Department of Chancellery and Foreign Affairs.
Walloon Region: The Direction des Licences d'Armes et des biens à double usage., part of the SPW Économie, Emploi, Recherche. This service uses the European eLicensing platform to apply for licenses.
Brussels Capital Region: The Directorate of External Relations of the Brussels Regional Public Service.

Part III: Convergence and divergence: sanctions vs. export controls

Although sanctions and export controls both restrict international trade, they are conceptually different tools. However, rising geopolitical tensions are causing the boundaries to blur in practice.

1. Similarities and differences

The fundamental differences and similarities can be summarized as follows:

Feature	EU Sanctions	Export Control (Dual-Use)
Primary Purpose	Political behavior change; response to crises (reactive).	Nonproliferation; international security; human rights protection (preventive).
Legal Basis	CFSP (Art. 29 TEU, Art. 215 TFEU).	Common Commercial Policy (Art. 207 TFEU).
Scope (Material)	Broad and flexible: persons, entities, sectors, goods, services.	Specific and technical: limited to goods, software and technology on the checklist (+ catch-all).
Scope (Personnel/Territorial).	Broad: EU nationals worldwide, all activities on EU territory.	Focused on the “exporter” and the transaction of exports from the EU.
Nature of Measure	Usually an absolute ban (unless exempted).	Permit requirement (export is possible after approval).
Competent Authorities (BE).	Federal: FPS Finance (Treasury) for financial penalties.	Regional: Services Control Strategic Goods in Flanders, Wallonia and Brussels.
Main Legal Instrument	Council regulations specific to each regime (e.g., Regulation (EU) 833/2014).	Regulation (EU) 2021/821 (Dual-Use Regulation).

2. Interaction in practice

In practice, both regimes must be applied cumulatively. A transaction may be perfectly compliant with the Dual-Use Regulation but still be prohibited under a sanctions regime, and vice versa. Sanction regulations often act as lex specialis imposing stricter or additional export prohibitions. For example, sanctions against Russia prohibit the export of a wide range of industrial goods, luxury goods and technology that are not on the dual-use list. Thus, an exporter must always perform a dual-use test.

The traditional separation between politically driven sanctions and technically driven export controls is eroding. Sanctions against Russia increasingly contain technically detailed annexes with commodity codes that closely resemble export control lists. At the same time, as evidenced by the White Paper of the Commission of January 2024, export control policy is increasingly positioned as a tool of economic security and geopolitical strategy, rather than mere nonproliferation. The ‘catch-all’ provision in the 18th sanctions package against Russia, which allows member states to block exports to third countries in the case of mere suspicion of rendition, is essentially a sanctions instrument applied through an export control mechanism. For legal practice, the two domains are increasingly merging into one overarching regime of strategic trade control.

Part IV: Trends and future prospects

Recent years have been marked by four defining trends that fundamentally reshape the landscape of sanctions and export controls.

Trend 1: Toward harmonized and criminalized enforcement

Enforcement of EU sanctions has long been the system's weak point. Wide differences in definitions, procedures and penalty sizes among member states undermined effectiveness and encouraged ‘forum shopping. In response, the EU took a crucial step.

In late 2022, the violation of EU sanctions was added to the list of ‘EU crimes’ under Article 83(1) TFEU. This opened the door for the harmonization of criminal law through Directive (EU) 2024/1226, which had to be transposed by member states by May 20, 2025 (Belgium had not transposed this directive by the end of October 2025 when this contribution was written). The directive defines a range of offenses, including failure to freeze assets, violating trade bans and knowingly circumventing measures. Crucially, the directive imposes minimum standards for maximum penalties:

For natural persons: Prison sentences of up to at least five years for the most serious offenses, such as trafficking in military goods or transactions worth more than 100,000 euros.
For legal entities: Maximum fines of at least 5% of global annual sales or an absolute amount of at least 40 million euros.

This directive transforms penalty compliance from a primarily administrative law exercise into a full-fledged domain of corporate criminal law. Although the Belgian law of May 13, 2003 already provided for criminal sanctions, the directive forces a tightening and more effective prosecution. Concepts such as conditional intent and the criminal liability of the legal person for lack of supervision are now enshrined at the EU level. For attorneys, this means that advice on sanctions now inherently becomes advice on avoiding criminal prosecution, with far-reaching implications for internal investigations, burden of proof and defense strategy.

Trend 2: the fight against circumvention (anti-circumvention)

The EU recognizes that the effectiveness of sanctions hinges on the ability to deter circumvention. The recent sanctions packages contain an arsenal of new tools:

Tightening the anti-circumvention clause: The standard clause (e.g., Article 12 of Regulation 833/2014) has been clarified to also include actions where one “accepts the possibility [of circumvention] as part of the deal.” This codifies the case law of the Court of Justice and lowers the burden of proof for prosecuting conditional intent.
The “No-Russia” Clause: This contractual obligation for EU exporters to ban re-exports to Russia enforces compliance in the non-EU supply chain.
Sanctioning facilitators in third countries: The EU is increasingly placing entities from countries such as China, Turkey, India and the United Arab Emirates on the sanctions list for supplying or facilitating circumvention of Russian military industries.
Diplomatic pressure: The 2023 appointment of an International Special Envoy for the Implementation of EU Sanctions, David O'Sullivan, underscores the commitment to engage with third countries at a high political level to prevent circumvention.

Trend 3: the strategic future of export control

The January 2024 White Paper on Export Controls signals a strategic reorientation. The EU wants to see export controls no longer merely as a technical non-proliferation tool, but as a proactive pillar of its economic security strategy. The main proposals are :

Creating a mechanism to add new items to the checklist more quickly at the EU level, even without consensus within multilateral regimes.
Improved coordination among member states in establishing national checklists to avoid fragmentation of the internal market.
An early review of the Dual-Use Regulation to adapt it to new geopolitical realities.

These proposals indicate a trend toward more centralized and politically driven export controls, which the EU intends to use to respond more quickly and autonomously to emerging technological and geopolitical threats.

Recent case law and implications for lawyers

On October 2, 2024, the General Court of the EU ruled in the joined cases T-797/22, T-798/22 and T-828/22. Several European bar associations, including the Dutch Bar Association at the Brussels Bar, had appealed against the ban on providing legal services to the Russian government and entities based in Russia (Article 5 quindecies of Regulation 833/2014).

The General Court rejected the appeals, ruling that the ban did not violate EU fundamental rights. It reasoned that the ban serves a legitimate public interest purpose (increasing pressure on Russia) and is proportionate. Crucial was the consideration that the fundamental right to legal assistance refers primarily to representation in judicial, administrative or arbitration proceedings. These activities are explicitly exempted from the ban. The right to mere legal advice outside a contentious context does not, according to the Court, enjoy equally strong protection and its restriction is justified. This judgment confirms the far-reaching impact of sanctions on the legal profession. For transactional or general legal advice to targeted Russian entities, attorneys must now apply for a prior exemption from the competent national authority (in Belgium, the Treasury), a procedure that is both administratively burdensome and uncertain.

Geopolitical tensions: counter-sanctions and conflicts

The increasing use of sanctions by the EU and its allies has led to the development of countermeasures by targeted states. Both Russia and China have passed legislation allowing for the sanctioning of entities complying with Western sanctions.

The Russian countermeasures are extensive and include a ban on the sale of assets in strategic sectors by entities from “unfriendly” states without presidential approval, the obligation for Russian debtors to repay debts to creditors from those states in rubles, and various import and export bans. This creates a “catch-22” or conflict of laws for MNCs: compliance with EU sanctions can lead to punishment under Russian law, and vice versa. This dilemma is similar to the situation the EU itself is trying to counter with its Blocking Regulation 2271/96, which prohibits EU companies from complying with certain extraterritorial U.S. sanctions, such as those against Iran and Cuba.

Conclusion

Recent years mark a paradigm shift. Sanctions and export controls are no longer mere diplomatic or trade tools, but are at the core of the EU's economic security strategy. Key evolutions include the criminalization of violations, an intense focus on enforcement and countering circumvention (with quasi-extraterritorial effects), and the strategic convergence of sanctions and export control regimes.

Does your company face the complexities of EU sanctions, export controls or the risks of circumvention? Our attorneys, specializing in international trade law, sanctions law and export control, are ready to identify your risks and proactively protect your business. Contact us for specialized advice.