Background
On 15 January 2026, the German Parliament adopted legislation transposing Directive (EU) 2024/1226, which defines and harmonizes criminal offenses and penalties for breaches of all EU restrictive measures (i.e., sanctions).
The directive’s core provision, Article 3, sets out a comprehensive list of criminal offenses that cover most types of sanction violations. Transposing the directive into national law, Germany revised key provisions in sections 18 and 19 of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz(AWG)) and Section 82 of the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung). In the absence of Bundesrat objections, the new legal provisions will take effect upon their promulgation.
This blog post provides an overview of the core changes to the legal framework.
Restructuring and clarification of existing criminal penalties
The reform brings substantial changes to Section 18 of the AWG with the goal of adapting and clarifying the provision in light of increasingly broad and complex sanctions regimes.
Among other clarifications, service restrictions — expanded through successive sanctions packages — are now explicitly addressed in Section 18(1) No. 1(b)-(d) of the AWG. The criminal provision on making funds available to listed persons has been relocated to Section 18(1) No. 1(h) of the AWG, reflecting its central role within the system of individual sanctions.
Section 18(1) No. 2 of the AWG clarifies obligations under EU law to freeze funds and economic resources of listed persons immediately upon listing. Noncompliance with the “obligation to prevent” violations of asset freezes and comparable restrictions can result in penalties.
New criminal offenses
The reform also introduces several new criminal provisions, as follows:
- Sectoral transaction bans: Section 18(1) No. 1(e) of the AWG criminalizes certain violations of sectoral transaction bans, which were previously treated only as administrative offenses. These bans apply to specific sector-related transactions, such as the prohibition to cooperate with Russian government-linked entities under Article 5aa(1) of Regulation (EU) No. 833/2014 (Russia Sanctions).
- Public procurement restrictions: Section 18(1) No. 1(f) of the AWG now makes it a criminal offense to award or continue public contracts in violation of sanctions.
- Asset concealment and circumvention: New provisions in Section 18(1) No. 3(a) and (b) of the AWG criminalize third-party actions aimed at hiding assets to evade sanctions. Beyond these specific cases, sanctions circumvention remains penalized as an administrative offense.
- Reporting obligations: Section 18(5a) of the AWG expands penalties for breaches of reporting duties. Failure to report information related to the implementation of sanctions measures constitutes a criminal offense, if the information was obtained in the course of professional duties and concerns frozen funds or economic resources. Legal professionals remain exempt when information is entrusted to them in their professional capacity (see Section 18(13) of the AWG). Other breaches of the reporting obligations remain administrative offenses under Section 19(5) No. 1 of the AWG.
- Particularly serious violations: Section 18(6a) of the AWG introduces harsher penalties (imprisonment ranging from six months to 10 years) for particularly serious cases of circumvention, such as providing false or incomplete information to authorities or using a third-country company under the offender’s control.
- Reckless violations involving dual-use goods: The new Section 18(8a) of the AWG criminalizes reckless breaches of certain sanctions involving dual-use goods listed in Annex I or IV of Regulation (EU) 2021/821. Even unintentional sanctions violations involving dual-use goods are now criminally punishable if committed recklessly, meaning particularly gross negligence on the part of the offender. For companies, this change results in a 20-fold increase in the maximum corporate fine under sections 130 and 30 of the German Administrative Offenses[HV1] Act from EUR 500,000 to EUR 10 million.
Corporate fines
The directive gives member states a choice of corporate fines: either imposing turnover-based fines (5%) or fixed amount fines. Germany has opted for fixed amount fines with a maximum amount of EUR 40 million for intentional sanction breaches or supervisory duty breaches regarding sanction violations.
Negligent breaches of management’s supervisory duties related to intentional employee offenses may now result in a corporate fine of up to EUR 40 million, up from EUR 10 million.
Exemptions and other changes
The reform introduces a narrow exemption for humanitarian assistance, removes the previous 48-hour grace period for compliance with new sanctions, and abolishes exemptions for voluntary late reporting of frozen funds.
Furthermore, Germany chose not to transpose Article 3(2) of the directive, which would have excluded transactions under EUR 10,000 from criminal liability.
A new legal basis has also been added in the German Customs Investigation Service Act (Zollfahndungsdienstgesetz) to coordinate cooperation between law enforcement and sanctions enforcement authorities. Additionally, in a last-minute committee amendment, provisions on trust management of companies in connection with sanctions enforcement were introduced
Conclusion
With these changes, Germany significantly expands and clarifies its sanctions enforcement framework to align with EU requirements and adapt existing rules to the increasingly complex sanctions regimes.
