Foreign trade criminal law and embargo violations – Lawyer Frankfurt

Foreign trade criminal law and embargo violations – criminal defence in Frankfurt and across Germany

Allegations of violating export controls, embargo regulations or EU economic sanctions immediately raise complex questions of foreign trade law, criminal law and international policy. Under the German Foreign Trade and Payments Act (Außenwirtschaftsgesetz – AWG) and the Foreign Trade and Payments Ordinance (Außenwirtschaftsverordnung – AWV), even a single shipment, contract or payment can attract serious criminal liability, especially under sections 17 and 18 AWG. Those affected – individuals, managing directors, export managers or intermediaries – face high statutory penalties, asset confiscation and reputational damage, often in parallel with proceedings for white-collar offences or tax evasion.

As an English-speaking boutique law firm in Frankfurt focused on criminal defence, we advise and defend clients nationwide in proceedings relating to export control, embargo breaches and EU sanctions. We combine many years of experience in economic and tax crime with a detailed understanding of the foreign trade regime. Our work ranges from the first initial suspicion and police summons to complex main hearings and appeals.

Legal framework: AWG, AWV, EU sanctions and the role of criminal law

The German foreign trade regime is based on the principle of freedom of foreign trade, but this is limited by embargoes, export controls and financial sanctions. These restrictions often originate from resolutions of the UN Security Council or from decisions of the Council of the European Union in the field of the common foreign and security policy. They are implemented through EU regulations and through the AWG and AWV.

Section 17 AWG criminalises violations of weapons embargoes and certain other particularly sensitive export prohibitions. It functions as a “blanket offence”: the criminal norm refers to more detailed prohibitions in the AWV (notably section 80 AWV in conjunction with sections 74, 75, 77 and 79 AWV) and to the export list. Conduct is only punishable if it breaches a prohibition that is itself based on a valid UN or EU decision, and the relevant ordinance must serve to implement the underlying sanctions decision. This “reservation” of UN or EU measures fulfils the constitutional requirement of legal certainty and determines the scope of criminal liability.

Section 18 AWG covers violations of EU economic sanctions that are directly based on EU regulations. It applies, for example, to prohibitions on exports, investments, financial services or dealings with frozen assets which are set out in EU sanctions regulations and which are directly applicable in Germany. Section 18 also covers breaches of licensing requirements relating to export control, technical assistance or services in the field of dual-use goods under the EU Dual-Use Regulation. As a result, foreign trade criminal law is closely linked with other areas of criminal offences and criminal procedure.

Typical conduct sanctioned under sections 17 and 18 AWG

The foreign trade provisions distinguish a number of different forms of conduct which can all trigger criminal liability. In practice, the following categories are particularly important:

• Sale and contract conclusion: Depending on the applicable ordinance, criminal liability may already be triggered by concluding a contract to supply embargoed goods, even before any physical shipment has taken place.
• Export and transfer: “Export” is usually defined as the physical transfer of a good across the external borders of the EU, while “transfer” covers movements within the internal market. For software or technology, transmission by electronic means may suffice.
• Transit and transport (Durchfuhr, Beförderung): Even if goods merely pass through the EU, transit can be restricted by sanctions; transport services may be criminally relevant if they support a prohibited export.
• Trade and brokering: Brokerage and other trade-related activities, such as arranging deals between third-country parties or financing chains, may be covered even where the goods never enter Germany.
• Import and acquisition: In some constellations the import, acquisition or use of sanctioned goods is prohibited, for example in relation to certain raw materials or dual-use items.

Modern sanctions regimes are not limited to physical goods. They may also target financial assets, capital market instruments, services or technology transfers. Violations of such provisions can overlap with classic economic offences such as fraud, embezzlement, money laundering, insider trading or market manipulation. Conflicts of norms and questions of concurrence then become central for the defence.

Aggravated cases, extraterritorial application and high sentencing ranges

Foreign trade criminal law is characterised by comparatively severe penalties. Section 17 AWG provides for a range of one to ten years’ imprisonment as the basic offence; in aggravated cases the maximum can rise to fifteen years. Section 18 AWG provides for imprisonment of up to five years, and in serious cases with aggravating factors, again up to fifteen years.

Aggravated circumstances include, among others, acting on behalf of a foreign intelligence service, acting on a commercial basis (gewerbsmäßig) or acting as a member of a gang formed for repeated embargo violations. In such scenarios the legislature assumes an increased danger to foreign and security policy interests, which is reflected in the sentencing framework.

Another key feature is the extraterritorial application of German criminal law. Under section 17 (7) and section 18 (10) AWG, German nationals can be prosecuted in Germany for offences committed entirely abroad, even if the conduct is not punishable on the territory where it took place. This builds on the “active personality principle” in international criminal law. In cross-border cases, questions of jurisdiction, extradition and mutual legal assistance arise, for which our experience in extradition law is often relevant.

Mental element: intent, gross negligence and mistakes about sanctions or licences

As a rule, foreign trade offences under sections 17 and 18 AWG require at least conditional intent. The person must recognise that their conduct falls within the scope of a sanction or licensing requirement and accept this possibility. In practice, however, many cases revolve around the distinction between intent and gross negligence (“leichtfertig”), as well as the boundary between factual mistakes and avoidable ignorance of the law.

A person who is completely unaware that an embargo exists may, in certain constellations, lack intent if the existence of the sanction is a factual element of the offence. By contrast, someone who generally knows that there are extensive sanctions, but assumes – without checking – that a concrete transaction is harmless, usually cannot rely on a simple error; courts regularly treat this as at best a mistake of law. For such mistakes to be excusable, the person must have obtained specific and reliable legal advice, disclosed all relevant facts to the advisor and taken note of warning signs in administrative guidance and the professional press.

Section 17 (5) AWG expressly criminalises grossly negligent breaches of embargo provisions. Gross negligence exists where the person disregards what is obvious under the circumstances – for example, when they ignore clear indications of a sanctions risk, fail to verify the status of a listed person or entity, or do not implement even basic controls in a high-risk export business. In the context of gross negligence, the courts impose strict duties of organisation and supervision on business owners and managers; failures can also trigger regulatory liability and corporate fines.

Course of proceedings: from initial suspicion to main hearing

Foreign trade cases typically begin with information from customs authorities, banks, foreign authorities or suspicious transaction reports. Once an initial suspicion has arisen, the public prosecutor’s office and specialised investigation units may order measures such as a search of business and private premises, seizure of documents and data media or even an arrest warrant with pre-trial detention.

At this stage, it is crucial for the defence to secure access to the files and to analyse the legal basis of the alleged sanctions, the wording of the relevant ordinances and the actual movement of goods, services or financial flows. The classification of products as dual-use or military items, as well as questions of end-use and end-user, often require technical and economic expertise in addition to legal knowledge.

As proceedings progress, the prosecution will decide whether to seek a penalty order, to file an indictment or to discontinue the case. The course of criminal proceedings in Germany – from investigation to main hearing and appeal – follows strict procedural rules. Knowledge of these rules, of the evidential requirements and of typical patterns of argumentation is essential for a targeted defence strategy.

Defence strategies in foreign trade and sanctions cases

In foreign trade criminal law, the defence does not merely react to allegations; it actively shapes the factual and legal picture. In our work as defence lawyers we regularly pursue the following lines of argument, adapted to the circumstances of each case:

• Clarifying the scope of the sanction: Many disputes centre on whether a particular good, service or transaction actually falls within the wording of an embargo or EU regulation. Fine distinctions in annexes and definitions can decide the outcome.
• Temporal aspects and changes in law: Sanctions regimes are dynamic. It must be examined which version of a regulation applied at the time of the act and whether more lenient law should be applied.
• Product classification and dual-use: Technical assessments of components, software or technologies can be decisive in determining whether export control lists are engaged.
• Intent versus negligence: Detailed analysis of internal documents, e-mails and advisory opinions is often required to determine whether a person acted intentionally, grossly negligently or merely negligently.
• Parallel offences and confiscation: Where there are allegations of tax evasion, VAT evasion or complex structures such as Cum-Ex transactions, we examine the interplay between substantive offences and the rules on confiscation of assets.

Negotiated outcomes, such as discontinuance subject to conditions or a penalty order limited to certain aspects, can sometimes significantly reduce the impact on the person concerned. At the same time, strategic decisions in the criminal proceedings frequently have consequences for tax assessments, regulatory measures and civil liability.

Who we act for and how we work

The foreign trade and sanctions practice of Buchert Jacob Peter focuses on the defence and advice of individuals and companies who are personally exposed to criminal proceedings. Our clients include managing directors, export and compliance officers, financial intermediaries, entrepreneurs and employees who are investigated because of their role in international trade or payments.

• Individuals and executives: We defend private individuals and decision-makers who are confronted with allegations of embargo violations, export control breaches or sanctions evasions.
• Companies and shareholders: In many cases, companies are affected by searches, seizures or confiscation measures, even if the investigation formally targets individuals.
• International clients: English-speaking clients often require explanations of German law and procedure, from the status of the accused to probation and appeal mechanisms.

We attach importance to transparent communication and a realistic assessment of risks and opportunities. Clients can find an overview of our practice areas in criminal defence, our attorneys and further background information in our legal dictionary. Current developments and case notes are regularly published in our German-language news section.

FAQ – foreign trade criminal law and embargo violations

What is the difference between sections 17 and 18 AWG?

Section 17 AWG mainly covers violations of weapons embargoes and particularly sensitive exports that are implemented via the AWV and export list. It is classified as a felony with a minimum sentence of one year. Section 18 AWG, in turn, covers violations of directly applicable EU sanctions regulations (for example, financial sanctions, investment restrictions or prohibitions on services) and certain other export control and licensing requirements. The penalty ranges are lower overall, but can be significantly increased in aggravated cases.

Is it already a criminal offence to negotiate or sign a contract?

Depending on the wording of the relevant ordinance, criminal liability may already attach to concluding a contract for the sale of embargoed goods, even if the goods have not yet been shipped. Whether a contract is covered depends on the specific formulation of the prohibition and on the definitions in foreign trade law. In practice, it is important to examine precisely which acts are prohibited and at which point a certain form of conduct (for example, merely preparatory steps) becomes criminally relevant.

Can I be prosecuted in Germany for conduct abroad?

Yes, under sections 17 (7) and 18 (10) AWG, German citizens can be prosecuted in Germany for offences committed entirely abroad, even if the conduct is not punishable under the law of the place where it occurred. In cross-border constellations, questions of jurisdiction, possible preliminary arrest abroad and risk of flight play a major role. Our experience in extradition and international cooperation is therefore especially relevant in these cases.

What should I do after a dawn raid or a search?

After a search it is essential to remain calm, to exercise your right to remain silent and to contact an experienced criminal defence lawyer without delay. We check the legal basis of the measure, document the course of events and ensure that your rights as an accused or witness are respected. Subsequent analysis of the seized data and documents is crucial for the further defence strategy.

How can I contact your firm for foreign trade or sanctions cases?

You can reach our law firm Buchert Jacob Peter in Frankfurt by telephone on +49 69 710 33 330 or via the contact page. Further information about our team is available on the overview page for our attorneys. Details on data processing and legal information can be found in our legal notice and privacy policy.

Contact our experts in business and white-collar criminal law in Frankfurt

The high demands placed on procedural expertise and specialist knowledge in business and white-collar criminal law are brought together in our team of three specialists who are available to support you with advice and defence in complex criminal proceedings.

• Attorney at Law and Certified Criminal Law Specialist Dr Caroline Jacob
• Attorney at Law and Certified Criminal Law Specialist Frank M. Peter
• Of Counsel: Prof. Dr. Frank Peter Schuster
• Cooperating tax advisor and former tax investigator Frank Wehrheim

This also means, among other things, the following additional qualifications:

• Certified advisor in business and white-collar criminal law (DAA)
• Certified accounting expert (Steuer-Fachschule Dr. Endriss)
• Completed postgraduate studies in business and white-collar criminal law (FernUniversität in Hagen)
• More than 25 years of experience as a tax investigator
• Certified criminal law specialists

Our law firm has been working in Frankfurt for more than 25 years with experienced defence lawyers in criminal law. We represent our clients in courts throughout Germany.

Contact us – your specialised criminal defence lawyers and business and white-collar criminal law counsel in Frankfurt am Main and across Germany

Phone: +49 69 710 33 330
E-mail: kanzlei@dr-buchert.de

Learn more about defence in business and white-collar criminal law in Frankfurt here:
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