Trade sanctions glossary

The vocabulary of EU restrictive measures, in plain language. These terms carry precise meanings in the regulations, and using them loosely is a reliable way to reach the wrong conclusion.

Annex

A schedule attached to a sanctions regulation listing the goods, entities or persons a measure applies to. EU trade annexes list Combined Nomenclature codes, often with narrowing descriptions. Annex contents are amended package by package, so an annex reference is only meaningful together with a date.

Anti-circumvention provision

A prohibition on knowingly and intentionally participating in activities whose object or effect is to defeat a sanctions measure. It reaches structures that are lawful on their face — routing through a third country, for example — where the purpose is to evade a restriction.

Asset freeze

A measure prohibiting dealing with the funds and economic resources of a designated person or entity, and making funds or resources available to them. It applies to the designated party rather than to a class of goods, and can extend to entities owned or controlled by a designated party.

Binding Tariff Information (BTI)

A decision issued by a customs authority giving legally binding classification of a specific product for a set period. It settles the tariff classification, which is an input to sanctions screening, but does not determine whether a sanctions measure applies.

Catch-all control

A provision of the dual-use framework requiring authorisation for an item that is not on the control list, where the exporter has been informed by, or is aware or has grounds for suspecting, that it may be intended for a use of concern such as a military end use in an embargoed destination.

Combined Nomenclature (CN)

The EU's eight-digit goods classification, extending the six-digit Harmonized System. Updated annually with effect from 1 January. EU sanctions annexes are written at this level, which is why screening at six digits is unreliable.

Common Military List

The list defining the military equipment covered by Member State export licensing under the EU's common rules on arms exports. Several sanctions regulations cross-refer to it rather than restating its contents.

Consolidated list

The EU's combined list of persons, groups and entities subject to restrictive measures. It is the reference used for party screening, and is amended continuously as designations are added and removed.

Derogation

A provision permitting an otherwise prohibited transaction in defined circumstances, typically subject to prior authorisation by a National Competent Authority. Common grounds include pre-existing contracts, humanitarian or medical purposes, and specified essential uses.

Designated person or entity

A party named in a sanctions annex and subject to individual measures such as an asset freeze or travel ban. Designation can have effect beyond the named party through ownership and control rules.

Diversion risk

The risk that goods lawfully supplied to one destination are subsequently re-exported to a restricted one. Assessing it is part of due diligence, particularly for goods of a type known to be diverted.

Dual-use items

Goods, software and technology with civilian applications that can also be used for military purposes or contribute to weapons proliferation, controlled in the EU under Regulation (EU) 2021/821. Control is determined by technical parameter rather than by tariff code.

End-use statement

A declaration by the buyer or end user setting out how goods will be used and undertaking not to divert them. Its value depends on being tested for plausibility rather than merely collected.

"ex" code

A prefix in a sanctions annex indicating that only part of a nomenclature code is covered, with the covered goods described in the accompanying text. The written description governs; a numeric match alone does not establish that an item is restricted.

Harmonized System (HS)

The six-digit international goods nomenclature maintained by the World Customs Organization and used as the common base by contracting parties worldwide. Revised approximately every five years.

Internal Compliance Programme (ICP)

A documented set of internal policies and procedures for export control and sanctions compliance. In the EU dual-use framework an ICP is a precondition for certain general authorisations.

National Competent Authority (NCA)

The Member State authority responsible for issuing authorisations and applying sanctions measures nationally. EU regulations are directly applicable, but licensing decisions are made at national level, which is why practice can differ between Member States.

Official Journal

The publication in which EU legislation is published and where the authentic legal text is found. Consolidated versions on EUR-Lex are editorial aids and are not themselves authentic.

Ownership and control

The principle by which measures against a designated party extend to entities it owns or controls, so an entity not itself listed can nonetheless be caught. Establishing this requires tracing beneficial ownership rather than relying on the immediate counterparty name.

Restrictive measures

The formal EU term for sanctions. They are adopted as Council Regulations, are directly applicable in every Member State without national implementation, and take effect on publication.

Sanctions package

A set of amendments adopted together, typically adding designations and amending trade annexes at the same time. Packages are the unit by which EU sanctions change, and are the reason screening results are date-dependent.

TARIC

The EU's integrated tariff database, using ten-digit codes extending the CN. It records measures applying at the customs border and is a useful cross-check, but does not supply annex, article or derogation detail.

Wind-down period

A time-limited window during which transactions under contracts concluded before a measure took effect may still be executed. Wind-down clauses are among the most commonly missed provisions in screening, and their expiry converts a lawful shipment into a prohibited one.

Using these terms in practice

Two distinctions do most of the work. The first is between a measure applying to goods and one applying to parties — different annexes, different screening methods, and no substitution between them. The second is between a code being listed and a transaction being prohibited: derogations, thresholds and wind-down periods sit between the two, and collapsing them is what produces both over-blocking and missed breaches.

See the sanctions screening overview for how these fit together, or the guides for the individual topics.