EU Russia sanctions export investigation: your products ended up in Russia

The case, in five lines

What is brought

Defence in the investigation and in the smuggling penalty proceedings (expediente sancionador de contrabando): replies to the requests for information, written submissions backed by evidence of your due diligence and, against the penalty, an economic-administrative claim (reclamación económico-administrativa) and judicial review (recurso contencioso-administrativo). In parallel, notifying the customer's breach (Article 12g(4) of Regulation 833/2014, ‘12 octies’ in the Spanish version) and the No Russia clause in your contracts. Managora does not handle the criminal defence.

Before which court

The smuggling section of the customs office of the province where the infringement was discovered investigates, and the AEAT customs body decides (art. 16 of Royal Decree 1649/1998). The penalty is challenged before the Tribunal Económico-Administrativo Regional (TEAR, the regional economic-administrative tribunal), or before the Central one (TEAC) if a central body imposed it or you so choose (art. 229 of the Ley General Tributaria, the General Tax Law), and then before the Sala de lo Contencioso-administrativo (the administrative chamber) of the Tribunal Superior de Justicia (the regional High Court of Justice) or of the Audiencia Nacional (the National High Court) (arts. 10.1.d and 11.1.d of the LJCA, the Law on the Contentious-Administrative Jurisdiction). Licences: the Secretaría de Estado de Comercio (the Secretary of State for Trade).

Deadline

Fifteen days to make submissions from the day after notice of the commencement order (acuerdo de inicio) (arts. 25.2 and 31 of Royal Decree 1649/1998) and six months for a decision (art. 35.5). One month for the economic-administrative claim (art. 235.1 of the General Tax Law) and two for judicial review (art. 46.1 LJCA). The infringement becomes time-barred four years after each export (art. 15 of Organic Law 12/1995). The customer's breach is reported as soon as you become aware of it.

Who can bring it

The party subject to the proceedings is the exporting company; the firm makes the submissions and appeals under your power of representation, without asking for your digital certificate. Your company signs the Article 12g(4) notification and we prepare it. In criminal proceedings the individuals involved are liable and, where applicable, so is the company (art. 3.3 of Organic Law 12/1995).

Financial risk

Below the criminal threshold, for dual-use or prohibited goods, a fine of 200% to 350% of the value, with a minimum of €1,000, confiscation and a possible suspension of those exports for up to a year (arts. 12.2 and 14.1 of Organic Law 12/1995); under the general scale, 100% to 350% with a minimum of €500. As a crime, one to five years' imprisonment and a fine of one to six times the value, which in these cases are imposed in the upper half of those ranges, and for the company two to four times (art. 3). In addition, the Secretaría de Estado de Comercio may suspend or revoke your licences.

Selling to a non-EU country does not protect you if the goods were bound for Russia

Regulation (EU) 833/2014 prohibits selling, supplying, transferring or exporting to Russia, or for use there, dual-use goods and the Annex VII goods that could contribute to its military and technological enhancement, whether or not they originate in the EU (Articles 2(1) and 2a(1)). Three words are decisive: ‘directly or indirectly’. Selling to a distributor in another country that resells to Russia is an indirect export, and the prohibition also covers technical assistance, brokering and financing (Article 2(2)).

Article 12 also prohibits participating, knowingly and intentionally, in activities whose object or effect is to circumvent those prohibitions, and it is enough to foresee that the transaction may have that effect and to accept the possibility. You do not have to want the goods to reach Russia: it is enough to see the warning sign and carry on. And some recipients are barred by a list, not by country: dual-use and Annex VII goods may not be sold to any entity listed in Annex IV, wherever it is located (Article 2b).

What nobody tells you is that the tariff heading does not tell you whether your product is prohibited. The Commission warns that there is no correlation between CN codes and dual-use or Annex VII items: what counts is the technical description. The common high priority items in Annex XL, by contrast, are listed by CN code. That is why the first document in the defence is the classification of each product reference, with its technical specifications and dated before export.

The No Russia clause: when it is mandatory and what it must include

Since 20 March 2024, anyone exporting to a non-EU country goods in Annexes XI, XX or XXXV, common high priority items in Annex XL or firearms must contractually prohibit their re-export to Russia (Article 12g(1)). The partner countries in Annex VIII, such as the United States or Japan, are excluded and, according to the Commission, so are contracts solely between EU operators. Public contracts with public authorities of non-EU countries are exempt, but must be reported within two weeks.

Writing the prohibition down is not enough: the contract must provide adequate remedies if the buyer breaches it (Article 12g(3)), and the Commission accepts that this may sit in validly incorporated general terms and conditions. Its model clause also requires the buyer to use its best efforts to ensure that nobody further down the chain, including resellers, frustrates the prohibition. Contracts concluded before 19 December 2023 enjoyed a transitional regime until 1 January 2025 or their expiry (Article 12g(2)(b)).

If your customer breaches it, you must inform the Secretaría de Estado de Comercio as soon as you become aware (Article 12g(4)), and Member States inform each other and the Commission of those cases (Article 12g(5)). The Spanish smuggling law does not mention the clause: the risk of having left it out is that this is treated as exporting without complying with a commercial policy measure (art. 2.1.d of Organic Law 12/1995), a debatable characterisation. The urgent step is to add it today to the contracts that lack it.

Administrative infringement or crime? The goods, their value and what you knew

Directive (EU) 2024/1226 requires breaches of EU sanctions to be punished as crimes, but as at 15 October 2026 Spain has not transposed it: the bill amending the Criminal Code was not passed. The route is still Organic Law 12/1995 on the Suppression of Smuggling, which treats as prohibited goods (géneros prohibidos) those banned by an EU regulation, for the banned activity (art. 1.12). Exporting for Russia what Regulation 833/2014 prohibits may fall within that definition.

That characterisation sets the threshold. Exporting prohibited goods, or dual-use goods without a licence or with one obtained using false information about the destination, is a crime from €50,000 (art. 2.2.b and c); as non-compliance with a commercial policy measure, from €150,000 (art. 2.1.d). Shipments under a single plan are added together and gross negligence is also punishable (arts. 2.4 and 2.5). The penalty reaches five years' imprisonment and six times the value, and the company, in the art. 2.2 cases, may be barred for up to two years from exporting those goods (art. 3).

Below the threshold it is an administrative infringement, whatever the value, but only with intent or some degree of negligence (art. 11.1). For the goods in art. 2.2 it is very serious above €18,000, with a fine of 275% to 350% and never less than €1,000, plus confiscation and a possible suspension of the activity (arts. 11.2, 12.2 and 14.1). And there is no reduction for the nature of the goods, which is excluded for prohibited goods and dual-use items (art. 6.2 of Royal Decree 1649/1998). If a criminal case is opened, Managora does not handle that defence.

The request for information and the proceedings: what to answer and when

The investigation usually starts with a request for information from customs or from the Secretaría de Estado de Comercio, whose inspection, together with that of customs, extends to holders of dual-use licences (art. 9.1 of Royal Decree 679/2014). It is answered on time, fully and in good order. Failing to respond, failing to provide documents or delaying the investigation is either an infringement in its own right, with a €1,000 fine if minor, or an aggravating factor in the penalty (arts. 11.4, 12.4 and 12 bis.1.b of Organic Law 12/1995). Answering is not confessing: you hand over what is asked for, with an explanation.

If customs finds an infringement, it opens penalty proceedings: the smuggling section of the province where it was discovered investigates, and the competent customs body decides (art. 16 of Royal Decree 1649/1998). From the day after notice of the commencement order there are fifteen days to make submissions and propose evidence; if the order already contains the full proposal and you stay silent, it may serve as the proposed decision (arts. 25.2 and 31). There are six months to decide (art. 35.5), and the infringement becomes time-barred four years after each export (art. 15 of Organic Law 12/1995).

What nobody tells you is that your submissions may end up before a criminal court. If customs sees signs of a crime, it refers the matter to the criminal courts (tanto de culpa), notifies you and sends the file with everything done so far; the administrative proceedings stop and the limitation period is interrupted (art. 17 of Royal Decree 1649/1998). If the court finds no crime, customs continues on the facts the court holds proven; if it convicts, no administrative penalty can follow. Every document is drafted with both readers in mind.

The defence: proven due diligence, characterisation and value

The infringement requires fault: without intent or negligence there is no penalty (art. 11.1 of Organic Law 12/1995 and art. 28.1 of Law 40/2015). The real question is what you knew and what you did about it: whether you classified your products, checked who the customer was and who controlled it, asked for the end-use statement, included the clause and stopped when something did not add up. If you can show it with documents dated before the shipments, the allegation of negligence loses its footing.

The warning signs of diversion are a matter of common sense: a new customer asking for exactly the high priority items, orders that do not fit its size or business, payments from third countries, last-minute changes of consignee or place of delivery. If any existed, the defence explains what was checked and why it was ruled out. For dual-use goods, the backbone of that evidence is the records that Regulation 2021/821 requires you to keep for five years (Article 27) and the papers for each licence, kept for ten years after it expires (art. 9.1 of Royal Decree 679/2014).

Next comes characterisation, which moves the threshold and the fine: dual-use, prohibited goods or goods subject to a commercial policy measure, and whether each shipment really had a Russian destination. Also disputed are the value, which sets the degree of the infringement and where the criminal threshold lies; the aggregation of shipments, which requires a plan; and the grading (art. 12 bis). Voluntary self-disclosure may mitigate under national law (Article 8(1) of Regulation 833/2014), but the smuggling law does not include it among its criteria: disclosing does not guarantee a reduction.

Licences, customers, subsidiaries and the bank: the fronts that remain open

The Secretaría de Estado de Comercio may suspend or revoke your licences if there are signs that the destination is a country with evidence of diversion, and must revoke them if information was omitted or falsified, always after a hearing (art. 7 of Royal Decree 679/2014); the decision is challenged as its statement of appeal rights (pie de recurso) indicates, and the regulation provides for a recurso de alzada (an administrative appeal to a higher authority) (art. 8). If it warns you that Annex VII goods may end up in Russia, you will need an authorisation to export them to any non-EU country (Article 2a of Regulation 833/2014).

The fastest way to cut off the risk is not an appeal: it is to stop supplying the suspect customer and add the clause to your contracts today. Article 11 of the Regulation protects that decision: no claim under an affected contract is satisfied if brought by anyone who, from a non-EU country that is not a partner, sold prohibited goods for use in Russia, and proving otherwise is up to them (Article 11(1)(d) and 11(2)). If you are the one claiming the contractual penalty before a Spanish court, you must, as a rule, first attempt the settlement required by art. 5 of Organic Law 1/2025, which applies to civil claims.

If the diversion was carried out by a subsidiary of yours outside the EU, Article 8a requires you to do everything possible to ensure that the companies you own or control do not undermine the sanctions, and the defence depends on being able to show it: group policies, written instructions, checks and audits. If the warning came from your bank, there are no proceedings yet: the bank does not impose penalties, but it may ask for papers and hold back the payment. Answer it with the same documents you would give customs: what you say there must match what you say later.

How we run the case, step by step

1. 1

   Identify what has arrived and fix the deadlines

   A request for information, a commencement order, a court summons or a question from the bank are not answered in the same way. With the notice in hand we fix the deadlines: the one in the request, the fifteen days for submissions and the limitation period for each shipment.

2. 2

   Stop the shipments and keep the paperwork

   Deliveries to the customer concerned are suspended and all transaction documents are preserved. Nobody redrafts or backdates contracts or statements: a falsified document is a fraudulent means that aggravates the penalty (art. 12 bis.1.c of Organic Law 12/1995).

3. 3

   Classify products and transactions

   Each product reference is checked against Annex I to Regulation 2021/821 and Annexes VII, XXIII and XL to Regulation 833/2014, and each shipment against its value, date and declared destination, to see what is at stake and whether anything approaches the criminal threshold.

4. 4

   Reconstruct the due diligence

   We gather contracts and general terms, end-use statements, customer checks, emails and transport and payment documents, and explain each warning sign of diversion that existed and why it was ruled out.

5. 5

   Make submissions on time and report the breach

   The firm files the submissions under your power of representation and requests the full file; your company signs the Article 12g(4) notification that we prepare. If there is a criminal risk, every document is weighed before it is filed.

6. 6

   Challenge the penalty and protect what comes next

   Against the penalty, an economic-administrative claim within one month and judicial review within two. In parallel, a No Russia clause with remedies in every contract and an internal export control programme that leaves a record of every decision.

The law that applies

• Arts. 2, 2 bis, 2 ter y 12 del Reglamento (UE) 833/2014. They prohibit selling or exporting, directly or indirectly, dual-use and Annex VII goods to Russia or for use there, and to the entities in Annex IV; they require an authorisation to export Annex VII goods to other non-EU countries if the authority warns of the risk, and prohibit participating in circumvention, including by accepting the possibility. 02014R0833-20260724
• Art. 12 octies del Reglamento (UE) 833/2014. Since 20 March 2024, anyone exporting goods in Annexes XI, XX, XXXV or XL, or firearms, to non-partner countries outside the EU must contractually prohibit their re-export to Russia, with remedies, and report any breach as soon as it becomes aware of it; public contracts are exempt and are reported within two weeks. 02014R0833-20260724
• Arts. 8, 8 bis y 11 del Reglamento (UE) 833/2014. They leave penalties to each Member State, which voluntary self-disclosure may mitigate under national law; they require everything possible to be done so that subsidiaries outside the EU do not undermine the measures, and bar claims under affected contracts brought by anyone who sold prohibited goods for use in Russia. 02014R0833-20260724
• Arts. 1, 2 y 3 de la Ley Orgánica 12/1995. They treat as prohibited goods those banned by an EU regulation; they set the crime threshold at €150,000, and at €50,000 for prohibited goods and dual-use items, adding together shipments under a single plan and punishing gross negligence, with one to five years' imprisonment, a fine of one to six times the value and specific penalties for the company. BOE-A-1995-26836
• Arts. 11, 12, 12 bis y 13 de la Ley Orgánica 12/1995. Below the threshold, an administrative infringement committed with intent or any degree of negligence; for the goods in art. 2.2, a fine of 200% to 350%, with a minimum of €1,000, and possible suspension of the activity; obstruction is an infringement or an aggravating factor, and the decision is challenged through the economic-administrative route. BOE-A-1995-26836
• Arts. 6, 16, 17, 25 y 35 del RD 1649/1998. They assign the proceedings to the customs bodies, deny the reduction for the nature of the goods for prohibited goods and dual-use items, allow fifteen days for submissions, require referral to the criminal courts where there are signs of a crime and set six months for a decision. BOE-A-1998-21017
• Arts. 7, 8 y 9 del RD 679/2014. They allow dual-use authorisations to be suspended, refused or revoked where there are signs of diversion and require revocation where information was omitted or falsified, after a hearing; they provide for a recurso de alzada and subject licence holders to inspection by the trade and customs authorities, with documents kept for ten years. BOE-A-2014-8926
• Arts. 10, 11 y 46 LJCA. Decisions of the Tribunales Económico-Administrativos Regionales (regional economic-administrative tribunals) go to the Sala de lo Contencioso-administrativo of the Tribunal Superior de Justicia; those of the Central tribunal and acts of Ministers and Secretaries of State, to that of the Audiencia Nacional. Deadline: two months from notification. BOE-A-1998-16718

Each article checked against the consolidated text published in the BOE (the Spanish official gazette).

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