EU sanctions apply directly to every business and person in the Netherlands, without any Dutch implementing law, and a breach is an economic offence under the Economic Offences Act (Wet op de economische delicten, WED). The Dutch Sanctions Act 1977 (Sanctiewet 1977) only arranges supervision and enforcement; the most important exception is that arms embargoes and entry bans still need national measures.
For a Dutch business, the practical question is whether a customer, supplier, shipment or payment is caught, and what to do when a match appears. This guide explains the legal structure, the two prohibitions that catch most companies, who supervises in the Netherlands and what compliance requires.
Table of contents
Where do the sanctions rules come from?
Three layers apply at once: the UN, the EU and the Netherlands. Only the EU regulations create direct obligations for your company.
The UN Security Council adopts measures under Article 41 of the UN Charter. These bind states, not companies, until they are taken over in EU or national law.
In the EU, the Council first adopts a decision under Article 29 of the Treaty on European Union (TEU), by unanimity. For financial and trade measures it then adopts a regulation under Article 215 of the Treaty on the Functioning of the EU (TFEU). That regulation applies directly in the Netherlands from its publication in the Official Journal, and it is the text your compliance team must read.
At national level, the Sanctiewet 1977 designates the supervisors and links breaches to the WED. A bill for a new International Sanctions Measures Act (Wet internationale sanctiemaatregelen) is intended to replace it; the Council of State gave its advice in December 2025. Until that bill enters into force, the 1977 Act applies.
| Feature | Council regulation (Article 215 TFEU) | Council decision (Article 29 TEU) |
|---|---|---|
| Legal effect | Directly applicable to businesses and individuals in the Netherlands | Binding on member states; not directly applicable to businesses |
| Typical content | Asset freezes, financial restrictions, import and export bans, service bans | The political decision, plus arms embargoes and entry bans |
| National implementation | None required; Dutch rules deal only with supervision and enforcement | Required for the elements outside EU competence |
Which types of sanctions measures exist?
There are four main types: financial sanctions, trade measures, service bans and travel measures. Each can apply to your business in a different way.
Financial sanctions freeze the funds and economic resources of listed persons and entities. The European Commission keeps the EU consolidated list of designated persons, which is updated frequently, sometimes several times a week.
Trade measures ban the export, import or supply of specified goods and technology, whether or not a listed person is involved. The Russia regime under Regulation (EU) No 833/2014 is the widest example, covering energy, dual-use items, advanced technology, luxury goods, iron and steel, and diamonds.
Service bans catch businesses that ship nothing. Under the Russia regime, providing services such as accounting, auditing, tax advice, IT consultancy, engineering and management consulting to entities in Russia can be prohibited. Travel measures, such as entry bans across the Schengen area, mainly affect individuals.
Which two prohibitions catch most companies?
An asset freeze does two things: it freezes what the listed person holds, and it bans anyone from making funds or economic resources available to that person, directly or indirectly. The second limb creates most liability, because it covers ordinary trade: delivering goods, paying an invoice or releasing a deposit.
When is a company owned or controlled by a listed person?
Under the Council’s EU Best Practices for restrictive measures, an entity is treated as owned by a listed person if that person holds 50% or more of it. Holdings of several listed persons are added together. Control can also arise below 50%, for example through the power to appoint the board.
This 50% test is not the 25% threshold for ultimate beneficial owners under anti-money-laundering law. Using the 25% threshold for a sanctions check is a common and costly mistake. Screening a name against a list is not enough: you have to trace the chain to the ultimate owners, and if the structure stays unclear, decline the deal.
What counts as circumvention?
Every EU sanctions regulation prohibits knowingly and intentionally taking part in activities whose object or effect is to circumvent the measures. Routing goods through a third country, inserting an intermediary to hide the end user or splitting payments can breach it, even if each step looks lawful. For certain goods, Regulation (EU) No 833/2014 also requires exporters to include a contractual ban on re-export to Russia.
Who supervises and enforces sanctions in the Netherlands?
De Nederlandsche Bank (DNB) and the Dutch Authority for the Financial Markets (AFM) supervise financial institutions; Customs enforces trade measures; the FIOD investigates and the Public Prosecution Service (Openbaar Ministerie) prosecutes. Other companies have no supervisor, but the prohibitions still apply to them.
DNB and the AFM check whether institutions screen their relations and transactions properly. They can impose administrative fines and orders subject to a penalty. An institution that finds a listed person among its relations must report this to its supervisor without delay, using the prescribed form.
The Central Import and Export Office (Centrale Dienst voor In- en Uitvoer, CDIU), part of Customs, handles licences and authorisations for goods. The Ministry of Foreign Affairs leads on sanctions policy. For a trading company, the first contact with the authorities is often a FIOD investigation rather than a compliance visit.
What are the penalties for breaching sanctions?
A breach is an economic offence under the WED. Committed intentionally it is a crime; otherwise it is a misdemeanour. Penalties include imprisonment, fines, confiscation of proceeds and (partial) closure of the business.
Fine levels follow the statutory fine categories of the Dutch Criminal Code, which are adjusted periodically, so always check the current amounts. For companies, the court can impose a fine from a higher category if the standard maximum is not adequate. Administrative fines from DNB or the AFM come on top of, not instead of, criminal liability.
Directive (EU) 2024/1226 requires member states to criminalise sanctions violations, with a transposition deadline of 20 May 2025. The Dutch government’s position is that existing Dutch offences and penalty levels already meet the directive’s minimum requirements. Sanctions breaches can also be a predicate offence for money laundering; see our article on money laundering and unusual transactions under Dutch law.
Directors can be prosecuted personally under Article 51 of the Dutch Criminal Code if they ordered the breach or actually directed it. In practice, the bank often acts first: it freezes the payment and asks questions afterwards.
What does sanctions compliance require in practice?
Screen, analyse ownership, document end use and build sanctions clauses into your contracts. Rescreen your existing customers whenever the EU list changes, because a designation takes effect immediately.
Screen customers, suppliers, intermediaries, shareholders and end users against the EU consolidated list. Establish the end use and end user of goods, and record how you did so. In contracts, include sanctions warranties, a duty to report changes in ownership, the re-export ban where required and a right to suspend or terminate. Our article on international commercial contracts explains how these clauses fit in.
What should you do when a screening hit appears?
Stop the transaction first: do not release goods or make a payment while you check whether it is a true match. Record your analysis, freeze what must be frozen and notify the competent authority. Financial institutions report to DNB or the AFM without delay; other businesses should check which authority is competent for the regime concerned.
Can you obtain an exemption or challenge a listing?
Yes, within narrow limits. Each EU regulation names the competent Dutch authority in an annex, and a request for a derogation or licence goes to that authority: the CDIU for goods, the responsible ministry for frozen funds.
The grounds are set out in each regulation. Typical grounds are basic needs of a listed person, reasonable legal fees, payments under a contract concluded before the listing and humanitarian purposes. A request succeeds or fails on its documents: the contract, its date, the payment flow and the end user.
A listed person can ask the Council to review the listing and can bring an action for annulment before the General Court of the EU. Under Article 263 TFEU, that action must be brought within two months. This is a separate route from a derogation.
Where do the recurring problems arise?
Four problems recur. First, ownership chains: a counterparty that is not listed may be owned by someone who is, two levels up. Second, new sanctions packages regularly add goods and services, so screening tools must be updated. Third, US sanctions often go further than EU measures, and complying with certain US measures can breach the EU Blocking Statute, Regulation (EC) No 2271/96. Fourth, intra-group transactions are assessed exactly like transactions with third parties.
What should you check as a trading company?
- Whether customers, suppliers, agents and end users appear on the EU consolidated list.
- Whether a listed person owns 50% or more of a counterparty, alone or together with others, or controls it.
- Whether your goods or services fall under a trade measure or service ban, for example under Regulation (EU) No 833/2014.
- Whether your contracts contain a re-export ban where required, and a right to suspend.
- Whether you need a licence from the CDIU before shipping.
What should you check as a financial institution?
- Whether your screening covers existing relations each time the EU list changes.
- Whether your ownership analysis applies the 50% sanctions test, not only the 25% UBO threshold.
- Whether a hit is reported to DNB or the AFM without delay, on the prescribed form.
- Whether frozen funds stay frozen until a derogation is granted.
- Whether your procedures are documented well enough to show to your supervisor.
What can we do for you with sanctions compliance?
Our lawyers advise Dutch and international businesses on EU and Dutch sanctions law; our corporate law guides cover the wider compliance framework.
- We assess whether a specific transaction, customer or shipment is caught by EU sanctions.
- We analyse ownership and control of a counterparty through the full chain.
- We draft sanctions clauses, including re-export bans and suspension rights, for your contracts.
- We prepare and file applications for a derogation or licence with the competent Dutch authority.
- We assist you when a payment is blocked, a hit has to be reported or the FIOD starts an investigation.
Summary
- EU sanctions regulations apply directly in the Netherlands; the Sanctiewet 1977 arranges supervision and enforcement.
- Making funds or resources available to a listed person, directly or indirectly, is the prohibition that catches most companies.
- An entity 50% or more owned by listed persons is treated as caught; the 25% UBO threshold is a different test.
- A breach is an economic offence; directors can be prosecuted personally.
- Derogations are possible only on the grounds in the regulation, via the competent Dutch authority.
Frequently asked questions
Do EU sanctions apply directly to Dutch companies?
Yes. A Council regulation under Article 215 TFEU applies directly to everyone in the Netherlands from its publication in the Official Journal. No Dutch implementing law is needed.
Am I liable if I did not know my customer was sanctioned?
Possibly. Intentional breaches are prosecuted as crimes, but a non-intentional breach can still be a misdemeanour under the Economic Offences Act. Proper screening and documentation are your best defence.
Who do I report a sanctions hit to in the Netherlands?
Financial institutions report to DNB or the AFM without delay. Other companies should contact the authority named for the Netherlands in the annex of the relevant EU regulation, such as the CDIU for goods.
Can a listed company challenge its designation?
Yes. It can ask the Council to review the listing and bring an action for annulment before the General Court of the EU within two months under Article 263 TFEU.
