Expert Guide to Financial Sanctions Enforcement in France

 Article 459 1 bis of the Customs Code (applicable to legal persons in accordance with article 459 1 ter of the same code) defines the criminal offence of violating restrictive measures imposed by the EU as well as resulting from any international treaty ratified by France.

Articles L. 562-1 and L. 562-3 et sequitur of the Monetary and Financial Code provide for the bringing into effect of financial sanctions ordered pursuant to EU regulation and the obligations of financial institutions to implement them. These specific obligations only concern the entities listed under article L. 562-2 of the Monetary and Financial Code (e.g. banks, insurers, trustees, assets managers, and generally any entity receiving or handling funds or economic resources on behalf of their client).

Yes – all French sanctions laws above form a common framework through which EU/international sanctions are applied.

Link (in French): Sanctions économiques internationales | Direction générale du Trésor

The Direction Générale du Trésor (General Directorate of the Treasury, an agency under the Ministry of Economics & Finance) is tasked with the issuance of temporary licenses deviating from Financial Sanctions laws.

Guide from the Treasury Department for filing an application for authorisation (in French) : Foire aux questions - Téléservice sanctions financières internationales | Direction générale du Trésor

Link to the teleservice for submitting an application for authorisation or licence (in French) : Téléservice Sanctions | Direction générale du Trésor

Link (in French) : Gel des avoirs - Gels des Avoirs - Direction Générale Du Trésor

Article 459 1 bis of the Customs Code (applicable to legal persons in accordance with article 459 1 ter of the same code) defines the criminal offence of violating restrictive measures imposed by the EU.

Article L. 574-3 of the Monetary and Financial Code provides that the circumvention of sanctions ordered pursuant to national or EU law under article L. 562-1 et sequitur of the Monetary and Financial Code, the breach of obligations arising therefrom, or the hindering of their implementation, shall  be punished under the rules set out in article 459 1 bis of the Customs Code. 

Breaches under art. 459 of the Customs Code shall be punished by five years' imprisonment, confiscation of the corpus delicti, confiscation of the means of transport used for the fraud, confiscation of the goods and assets that are the direct or indirect product of the offence, and a fine equal to at least the amount and at most twice the amount of the offence or attempted offence.

Under Art. 459 1 ter of the Customs Code, legal persons found in breach shall be subject to a fine five times greater than above (art. 131-38 of the Penal Code), as well as the sanctions provided for under art. 131-39 of the Penal Code, i.e. :

1. Dissolution, when the legal person was created or, in the case of a crime or offense punishable with regard to natural persons by a prison sentence of three years or more, diverted from its purpose to commit the incriminated acts;
2. A ban, either permanently or for a period of up to five years, on directly or indirectly exercising one or more professional or social activities;
3. Placement under judicial supervision for a period of up to five years;
4. The permanent closure of the establishments or one or more of the establishments of the company used to commit the incriminated acts, or closure for a period of up to five years;
5. Exclusion from public procurement contracts permanently or for a period of up to five years;
6. A ban, either permanently or for a period of up to five years, on making a public offering of securities or on having its securities admitted to trading on a regulated market;
7. The prohibition, for a period of up to five years, to issue cheques other than those which allow the drawer to withdraw funds from the drawee or which are certified or to use payment cards;
8. The penalty of confiscation, under the conditions and in accordance with the procedures laid down in article 131-21 of the Criminal Code;
9. The display of the decision handed down or its dissemination either in print media or by any means of electronic communication to the public;
10. The confiscation of the animal that was used to commit the offense or against which the offense was committed;
11. A ban, either permanently or for a period of up to five years, on keeping an animal;
12. A ban, for a period of up to five years, on receiving any public assistance allocated by the State, local authorities, their institutions or their groups, as well as any financial assistance paid by a private individual responsible for a public service mission.

The following officers are authorized to record violations of the legislation and regulations governing financial relations with foreign countries and to proceed to search and seizures relating thereto (art. 453 and 454 of the Customs Code):

1. customs officers;
2. other finance administration officers with the rank of controller or higher;
3. criminal investigation officers and customs officers mentioned in article 28-1 of the code of criminal procedure. The official reports drawn up by such officers are sent to the Minister of the Economy and Finance, who refers the matter to the public prosecutor if he deems it appropriate.

In France, it is the public prosecutor's office that prosecutes criminal offences, but breach of sanctions under art. 459 of the Custom Code shall only commence upon the filing of a criminal complaint by the Minister for the Economy and Finance, or one of its representatives (art. 458 of the Customs Code).

No for entities subject only to the rules set out under art. 459 of the Customs Code.

Yes for entities subject to the purview of the Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution, ACPR) under art. L. 612-1 et sequitur of the Financial and Monetary Code, (e.g. banks, insurers, trustees, assets managers…), which may incur specific administrative fines or penalties.

Article L. 561-36 et sequitur of the Monetary and Financial Code provide that the breach or circumvention, by an entity subject to the purview of the ACPR, of financial sanctions as set out under articles L. 562-1 and L. 562-3 of the Financial and Monetary Code, or any obligations arising therefrom, may in addition to any criminal penalties, be punished by the sanctions set out under article L. 612-39 of the Monetary and Financial Code, i.e.:

1. A warning;
2. A reprimand;
3. A ban on carrying out certain operations and any other limitations on the exercise of the activity;
4. The temporary suspension of one or more managers;
5. The automatic resignation of one or more managers;
6. The partial withdrawal of authorization to practice;
7. The total withdrawal of authorization or removal from the list of authorized persons;

In addition, the ACPR may order civil fines up to 100 million euro or 10% of the annual turnover, whichever is higher (art. L. 561-36-1 IV. of the Monetary and Financial Code)

Administrative breaches of financial sanctions are investigated by the Prudential Supervision and Resolution Authority (Autorité de Contrôle Prudentiel et de Résolution, ACPR), France’s financial regulatory authority.

Summary guide from the French Treasury (in French):

Sanctions économiques internationales | Direction générale du Trésor

Guide of good practices (in French) : https://www.tresor.economie.gouv.fr/Institutionnel/Niveau2/Pages/f3234489-26a1-48f7-8a05-f31d34551f13/files/d30c8579-086d-42e1-a43f-8b79a677dc46