Term and legal definition of ‘Sanctions’
The term ‘Sanctions’ refers, in a legal context, to measures imposed by one or more parties against another legal or natural person, company, or state, with the aim of enforcing, preventing, or penalizing particular conduct. Sanctions serve as control and regulatory instruments within national, European, and international legal systems. They may be applied both in public and private law and differ in their form, scope, and objective.
Distinction and types of sanctions
State and interstate sanctions
State sanctions are legal measures imposed within a national legal system against individuals, companies, or organizations to enforce statutory provisions, criminal law regulations, or administrative rules. Interstate or international sanctions are imposed by states or international organizations against other states or their actors.
Criminal sanctions
In criminal law, sanctions refer to the legal consequences of criminal acts. These particularly include:
- Imprisonment
- Fines
- Ancillary penalties (e.g., driving bans, professional bans)
- Measures of rehabilitation and security
The specific implementation is determined by the provisions of the Criminal Code and supplementary laws.
Sanctions under regulatory and administrative law
Administrative sanctions arise in the context of breaches of obligations towards administrative authorities. These include fines, fees, coercive fines, administrative acts with detrimental effect, and judicial-administrative measures up to and including the revocation of permits or licenses.
Disciplinary and employment law sanctions
In employment and disciplinary law, employment or service sanctions can be imposed on employees, staff, and civil servants. Typical measures include warnings, transfers, reduction of remuneration, suspension, or dismissal.
International sanctions in international law
International sanctions are central instruments for the enforcement of international law. They are particularly adopted by international organizations such as the United Nations, the European Union, or other coalitions of states and serve mainly to maintain peace, enforce human rights, or penalize violations of international law.
Common international sanctions include:
- Economic sanctions (trade or export restrictions, embargoes)
- Financial sanctions (freezing of accounts, bans on financial transactions)
- Travel sanctions (entry bans, visa restrictions)
- Diplomatic sanctions (severing or restricting diplomatic relations)
- Military sanctions (targeted operations or arms embargoes)
Legal basis and enforcement
The legal foundations of international sanctions are anchored in the statutes and treaties of international organizations, for example Chapter VII of the Charter of the United Nations. Within the EU, sanctions are based on Article 215 TFEU; at the national level, they are specifically set out in domestic implementation laws.
Effect and function of sanctions
Prevention, repression, and protection functions
Sanctions serve multiple legislative functions:
Prevention function: Deterring potential offenders
Through their punitive, but also deterrent effect, sanctions are intended to ensure compliance with legal and societal norms.
Proportionality and legal protection
A key legal principle in the imposition of sanctions is proportionality. Sanctions must be appropriate, necessary, and reasonable. In particular, in public law and in the area of international sanctions, it is possible to seek judicial review and legal protection before the competent national courts or international bodies (e.g., the Court of Justice of the European Union).
Enforcement and review of sanctions
The enforcement of sanctions is carried out by different national and supranational authorities depending on the area of law. In an international context, special sanctions committees as well as national law enforcement and customs authorities monitor compliance. For all sanctions, it must be ensured that affected parties can appeal and seek judicial review.
Sanctions in civil law
In civil law, the term ‘sanction’ appears for example in the context of contractual penalties, liability for damages, or negative consequences for breach of contractual obligations. Here, they serve to enforce individual claims arising from contracts or statutory liability and can be enforced by civil law remedies.
Difference from other legal consequences: Sanctions and measures
Sanctions are not to be confused with mere measures without punitive character, such as preventive requirements or administrative instructions which aim to ensure certain conditions and do not serve a penal or punitive function.
Sanctions and their significance in modern law
Sanctions have become indispensable in modern legal systems and international politics. They have been established as a versatile instrument for safeguarding the rule of law, enforcing individual and collective interests, and providing a binding response to legal violations. Ongoing globalization, increasing ties under international law, and the growing occurrence of cross-border problems grant sanctions ever greater practical and legal importance.
Summary:**
In the legal sense, ‘sanctions’ refer to a wide range of punitive measures based on statutory, interstate, or contractual norms. They serve to enforce, deter, or restore lawful conditions, are subject to specific legal foundations and proportionality requirements, and are flanked by effective judicial protection. Both nationally and internationally, sanctions constitute a fundamental element of law enforcement and conflict resolution.
Frequently asked questions
When are sanctions legally binding and who is obligated to comply with them?
Sanctions are legally binding in Germany and the European Union as soon as they have been enacted by the respective competent bodies and published in the relevant law or regulation gazette. In the case of UN sanctions, binding effect arises after adoption by the EU or national legislation. They apply not only to legal entities such as companies, but also to natural persons, banks, insurance companies, or trading companies. The obligation to comply is comprehensive and applies to nationals, duly established firms, and anyone operating within the relevant jurisdiction. Non-compliance can result in criminal and administrative penalties. Therefore, sanctions screening is mandatory when initiating and conducting business.
How is it verified whether business partners or transactions are subject to sanctions?
Sanctions screening is usually performed by checking against official sanctions lists, particularly the consolidated EU sanctions list, OFAC list (USA), or UN list. Companies are required to check all contracting parties, beneficial owners, and transactions against these lists prior to establishing a business relationship and continuously during the business relationship. This can be done manually or automatically using compliance software. Special attention must also be given to indirect sanctions, such as those targeting affiliated companies or groups of persons. The screening covers, among other things, the identity and ownership structure of the business partner, the intended use, as well as delivery routes and payment flows. Documentation and verification obligations for these checks are legally mandatory.
What are the legal consequences of violating sanction provisions?
Violations of sanction provisions can result in severe penalties, depending on the legal basis. In Germany, breaches of applicable sanction regulations can be prosecuted as regulatory offenses or even as criminal offenses under § 18 et seq. of the Foreign Trade and Payments Act (AWG), especially in cases of embargo violations. Sanctions can range from fines to imprisonment. In addition, civil law consequences such as the invalidity of contracts or compensation claims are conceivable. Companies risk reputational damage, loss of licenses, and access to financial services, and may also be liable if employees or agents act negligently. There is also an obligation to report suspected cases to the competent authorities, such as the Federal Office for Economic Affairs and Export Control (BAFA).
Are there ways to suspend or authorize transactions despite existing sanctions?
Yes, in individual cases there are possibilities for exemptions or authorization procedures. This is particularly possible for carrying out certain transactions that would otherwise be subject to the sanctions regime. In Germany, the Federal Office for Economic Affairs and Export Control (BAFA) or the Federal Ministry for Economic Affairs and Climate Action (BMWK) are usually responsible. Such authorizations are granted restrictively, for example, to safeguard humanitarian purposes, in the case of existential delivery obligations, or where there is overriding public interest. Certain sanctions regimes contain explicit exemption provisions; others at least allow the authority to conduct a case-by-case assessment. Without express permission, transactions are strictly prohibited.
What is the legal impact of secondary (extraterritorial) sanctions on German companies?
Secondary or extraterritorial sanctions are particularly imposed by the USA and are aimed at deterring non-American companies from dealings with sanctioned states or persons. From the German and European perspective, such sanctions are controversial under international law and, according to the EU Blocking Regulation (Regulation (EC) No 2271/96), are not directly legally binding. Nevertheless, there are actual risks: companies may not have, or may have only limited, access to the US market or US financial services, and individual executives may risk personal sanctions. The legal situation is complex, as German companies can violate EU law by complying with US sanctions without compelling reason, while at the same time risking sanctions from third countries. In such cases, the legal situation is regularly assessed by careful weighing of interests and risks.
What role do courts and authorities play in the enforcement of sanction provisions?
The enforcement of sanctions is primarily the responsibility of specialized authorities, such as BAFA at the national level or the European Commission at the EU level. They review business activities, penalize violations, and issue sanction notices. Courts become involved when sanctioned parties challenge their listing or when criminal or administrative proceedings are initiated. In civil law, disputes regarding contract fulfillment or damages in the context of sanctions regulations can be litigated. International legal assistance, conflicts of national laws, and possible claims for damages due to unjustified compliance with sanctions lead to a complex interplay of administrative and judicial proceedings at national and international levels.
Under what conditions can individuals or companies challenge their sanctioning?
Affected natural or legal persons may challenge their listing and associated sanctions through legal remedies. At the EU level, for example, an action for annulment can be brought before the General Court of the European Union if, for example, procedural rights were violated or insufficient justification for the sanctioning was provided. Such actions can result in adjustments to the lists. At the national level, legal remedies (e.g., objection and lawsuit) can be taken against administrative acts of sanctioning authorities. The prerequisites are direct and individual affectation, and all deadlines and specific formal requirements must be strictly observed. Jurisprudence examines fundamental rights violations in individual cases, especially regarding property rights, freedom of occupation, and the right to a fair trial.
