Yachting, AML and anti-terrorist financing – sanctions regime, recent litigation and operational aspects

This article presents the sanctions regime applicable to breaches of the obligations arising from Regulation (EU) 2024/1624, its state of progress at EU and French level, and proposes operational suggestions for the professionals concerned. Previous parts of this series are here and here.

Stephenson Harwood is an international full-service firm in the yachting and shipping industry. Our teams have unparalleled experience in dealing with the complexity of international sanctions and compliance obligations in the context of high value and cross border transactions.

You will have contacts in the industry who will benefit from reading this, do forward them this article. If you are someone receiving this and not already on our mailing list – make sure you sign up to not miss future updates.
  

The sanctions regime: a framework still under construction

The Regulation leaves it to Member States to determine the sanctions regime applicable in the event of non-compliance with its obligations; such measures must however be “effective, proportionate and dissuasive”. Member States were required to notify the European Commission, by no later than 10 January 2025, of the sanctions regime they had adopted. No such notification for France was known or made public.

In addition, the Commission has to adopt delegated acts defining the categories of infringements subject to sanctions and the persons responsible, the indicators for assessing the severity of infringements, and the criteria for determining the level of sanctions. On this point, on 9 February 2026, AMLA launched a public consultation on a draft regulatory technical standard ("RTS") specifically addressing, for the non-financial sector, pecuniary sanctions, administrative measures and periodic penalty payments (see our previous article on this topic). Once officially adopted, this instrument will be one of the harmonisation tools expected to calibrate the sanctions regime applicable to the future Obliged Entities in the high-value goods sector, including yachting. Professionals in the sector should therefore monitor the outcome of this consultation, which will give a concrete indication of the level of severity adopted at EU level.

In France, as a benchmark for the intensity of existing anti-money laundering and countering financial terrorism (AML/CFT) enforcement, the ACPR’s Sanctions Committee — which has jurisdiction over the financial sector — issued 29 decisions over five years, for a cumulative amount of €43.9 million. This observation, specific to the financial sector, does not prejudge the level of oversight that will be exercised over future non-financial Obliged Entities such as yachting professionals, whose supervisory and sanctioning authority under French law remains to be determined.
  

A litigation development illustrating the sector’s practical stakes

The Court of Justice of the European Union confirmed, on 21 May 2026 (joined cases C-428/24 and C-476/24), the validity of the freezing of the sailing yacht Sailing Yacht A, allegedly owned by a sanctioned individual, dismissing the challenges brought since May 2022. This ruling confirms the legal robustness of asset-freezing measures tied to international sanctions, even where the ownership structure of the vessel is complex — a risk factor expressly identified both by the EU Regulation and by the Monegasque practical guide (see our previous article).

In addition, multiple press articles highlight the practical difficulties faced by states in managing yachts seized under sanctions regimes: often considerable maintenance costs, opaque ownership structures that hamper identification of the beneficial owner, and persistent legal uncertainty over the ultimate fate of these assets. This finding reinforces, for industry professionals, the value of enhanced upstream due diligence — rigorous identification of the client and beneficial owner, and understanding of the ownership structure — rather than downstream management of difficulties linked to assets already tainted by suspicion.

In France, the press reported the auction, on 27 March 2025, of a yacht worth €10 million by the Agency for the Management and Recovery of Seized and Confiscated Assets (Agrasc), for the benefit of the State; the supposed Belarusian owner was implicated in an investigation on charges of criminal conspiracy and aggravated money laundering. It should be noted that the sale occurred while the accused person had not been convicted yet. French law authorizes the sale of a seized asset in the cases, inter alia, where maintaining the asset-freezing would be likely to reduce the value of the asset or would entail protective costs that are disproportionate to its economic value, or where the maintenance of the asset requires specialist expertise.
   

Updated practical recommendations

As the obligations arising from the Regulation will become directly applicable from 10 July 2027, we recommend that potentially affected stakeholders:

• assess whether their activity falls within the scope of the Regulation (in whole or in part), in particular in light of the “Professional Traders” and “Intermediaries in the Trade of High-Value Goods” categories;

• anticipate these obligations and implement the necessary internal frameworks (governance, policies, procedures and controls), without waiting for the regulatory deadline;

• monitor the outcome of AMLA’s RTS consultations (customer due diligence, thresholds applicable to business relationships and occasional transactions, sanctions applicable to the non-financial sector), which will clarify the final calibration of the framework;

• for operators active in Monaco, align internal procedures with AMSF’s updated Practical Guide fir the yachting sector and Generic Guidelines, taking into account the emerging risk linked to crypto-asset payments;

• incorporate, into counterparty and beneficial-owner risk analysis, the lessons of recent litigation concerning vessels subject to international sanctions.

Beyond the sanctions that may be imposed for breaches of these compliance obligations, legal, economic and financial risks may also arise from being deemed — through a failure to comply — to have participated directly or indirectly in, or facilitated, a money laundering operation, regardless of the predicate offence, under applicable national law.

It is therefore incumbent upon entities subject to AML/CFT compliance obligations to ensure full adherence, not only to manage compliance risk, but also to mitigate the criminal liability that could potentially result.