German-Russian Trade Relations in 2026: Legal Aspects and Risks

Brief Answer

What does trade between Germany and Russia mean from a legal perspective today

Trade relations between Germany and Russia in 2026 are legally possible, but are governed by a multi-layered system of restrictions. EU Regulation 833/2014 with its twenty packages of sanctions, German foreign trade legislation, and Russian counter-sanction measures form a legal corridor in which business between the two countries requires careful legal support. Our law firm provides German and Russian companies with comprehensive legal assistance under these conditions.

Key Facts: Sanctions, Restrictions, and Current Agreements

• Since February 2022, the EU has adopted twenty packages of sanctions, the latest on April 23, 2026
• On February 6, 2026, Germany significantly tightened liability for violations of foreign trade legislation
• In June 2026, the EU adopted a separate package of personal sanctions against 34 individuals and 47 organizations from third countries
• The bilateral investment agreement between Germany and Russia remains in force
• Russia's WTO membership formally remains intact, but a number of obligations have been effectively suspended
• Trade in non-sanctioned goods between Germany and Russia is legal when established procedures are followed

Key Facts

• German-Russian trade in 2026 is conducted under the EU's active sanctions regimes: each transaction requires prior legal review for compliance with restrictive measures.
• German companies with assets or subsidiary structures in Russia are required to comply simultaneously with Russian corporate law and EU sanctions law — two regulatory frameworks that frequently conflict with one another.
• Settlements between Russian and German residents in 2026 are subject to foreign exchange control restrictions and must be processed through permitted channels with documentary confirmation of each transaction.
• Registering a new legal entity with a German founder in Russia is possible, but entails additional regulatory scrutiny and mandatory verification of the beneficial ownership structure.
• Legal due diligence of counterparties and corporate documentation is the primary risk-mitigation tool for Germany-related businesses entering or exiting the Russian market.

Legal Framework of German-Russian Trade in 2026

The legal regulatory framework is based on EU Regulation 833/2014, which has been amended and expanded on numerous occasions. The twentieth sanctions package, adopted on 23 April 2026, introduced additional restrictions in the areas of technology exports and financial transactions. In parallel, the EU strengthened its oversight of sanctions circumvention through third countries: in June 2026, personal restrictions were imposed on organisations that had facilitated the re-export of sanctioned goods.

The bilateral Agreement on the Promotion and Protection of Investments between Germany and Russia (1989) formally remains in force. The EU–Russia Partnership and Cooperation Agreement of 1994 has not been denounced, however its application has been effectively frozen with respect to trade provisions. WTO rules remain in force, although a number of member states invoke exceptions under Article XXI of the GATT, citing national security interests.

EU Sanctions Regime and Export-Import Restrictions

Export Prohibitions and Restrictions

German companies are prohibited from exporting to Russia dual-use goods, technologies for the oil and gas sector, luxury items, electronic components above certain threshold values, aviation spare parts, marine navigation equipment, and a wide range of industrial goods. Export control is based on EU Regulation 2021/821 and the German Foreign Trade Act (Außenwirtschaftsgesetz). From February 2026, violations of these rules in Germany will be subject to significantly harsher penalties, including criminal prosecution.

Import Restrictions and Permissible Exceptions

Imports from Russia to Germany are restricted with regard to oil and petroleum products, coal, steel, gold, diamonds, and a number of other goods. Exceptions do exist: national competent authorities may issue individual licences for transactions related to humanitarian needs, medicines, foodstuffs, and the fulfilment of previously concluded contracts in specified cases. Each such exception requires a separate legal justification and documentary substantiation.

Legal Risks for German Companies in Russia

Liability for Violations and Circumvention of Sanctions

Violation of EU sanctions law carries criminal liability in Germany: the reform of 6 February 2026 expanded the scope of criminal offences and tightened penalties. Liability for re-export through third countries poses a particular risk. A company that has supplied goods to Kazakhstan, Turkey, or the UAE with Russia as the ultimate destination is held liable on equal footing with a direct exporter. The EU's shift of focus to third countries, confirmed by the June 2026 package of individual sanctions, makes this risk especially pertinent.

Compliance Risks and Supply Chains

German companies are required to conduct due diligence on all counterparties throughout the supply chain. The actions of intermediaries, agents, and subsidiary structures may be attributed to the parent company. Reputational consequences of even an alleged sanctions violation can cause damage to a business comparable to legal sanctions. A comprehensive sanctions audit of counterparties and regular updates to internal compliance procedures are a mandatory condition for continuing to operate in the Russian direction.

Prohibition on Legal Services and Permissible Exceptions

Article 5n of the EU Regulation prohibits the provision of legal advisory services to the Russian government and Russian legal entities. However, the legislator has provided for significant exceptions: representation in court, ensuring access to justice, and legal advice necessary for compliance with EU law remain permissible. Mandatory legal advice in judicial and administrative proceedings is not subject to the prohibition.

For German-speaking law firms operating in Russia, this means the need to clearly structure the services provided. Each mandate must be qualified in terms of the applicable exemption. Attorney Erich Rath and our team have practical experience in structuring legal assistance within the current legal framework, ensuring compliance with both European and Russian law.

Protection of German Assets and Dispute Resolution

Russian counter-sanction measures include restrictions on the disposal of assets, the requirement to obtain approval from a government commission for transactions involving residents of unfriendly states, as well as restrictions on type "C" accounts. The bilateral investment agreement gives German investors the right to resort to international arbitration for the protection of investments.

Resolving disputes between German and Russian counterparties in 2026 is complicated by issues of recognition and enforcement of court judgments. International commercial arbitration — in Stockholm, Vienna, or Moscow — remains the most effective instrument, although the choice of arbitral institution requires careful consideration of sanctions-related restrictions. Pre-trial settlement and mediation are gaining particular importance: they allow the parties to avoid lengthy and costly procedures in conditions of legal uncertainty.

Prospects for Normalizing Trade Relations

Partial lifting of sanctions will require a unanimous decision of the EU Council. From a legal standpoint, this implies a phased revision of regulations, with the possible retention of sectoral restrictions while other measures are lifted. German companies would be well advised to conduct legal audits of retained Russian assets now, maintain corporate structures in proper order, and prepare the documentary groundwork for the resumption of full-scale trade operations. The German-Russian Foreign Trade Chamber continues to facilitate the preservation of business contacts.

If you are a German company operating in the Russian market, or a Russian business with German counterparties, we are ready to provide legal support that complies with the current sanctions regime. Please contact our law firm for a consultation: phone +7 (495) 970-74-16, email: listed on the firm's website. Our office is located at: Moscow, 5/7 Rozhdestvenska str., building 1.

Frequently Asked Questions

What goods can German companies legally export to Russia in 2026?

The export of non-sanctioned goods remains lawful. Prohibited items include dual-use goods, technologies for the oil and gas and defence sectors, luxury items, electronic components, and certain industrial goods. Each product classification must be verified against the current lists under EU Regulation 833/2014.

What legal risks do German entrepreneurs face who maintain business operations in Russia?

Key risks: criminal liability for sanctions violations (tightened in Germany as of February 2026), liability for the actions of intermediaries and re-export, restrictions on the disposal of assets under Russian counter-sanctions, as well as reputational consequences.

Does the ban on legal services to Russian clients extend to court representation?

No. Article 5n of the EU regulation explicitly excludes from the prohibition legal representation in court, ensuring access to justice, and mandatory legal advice in judicial and administrative procedures.

Which international agreements between Germany and Russia continue to be in effect in 2026?

Bilateral Investment Agreement of 1989 remains in force. The EU–Russia Partnership Agreement has not been formally denounced, but is effectively frozen. WTO rules apply with reservations under Article Twenty-One of GATT.

How can a German company protect its assets in Russia under current sanctions?

Key tools: maintaining corporate structures, utilizing bilateral investment agreement mechanisms, engaging with the governmental commission overseeing foreign investment control, and providing professional legal support for every asset transaction.

What law applies to a contract between a German and a Russian company in a dispute in 2026?

Applicable law is determined by the clause in the contract. In the absence of such a clause, the court or arbitration applies conflict-of-law rules. International commercial arbitration remains the preferred dispute resolution mechanism.

What is the liability of a German company for re-exporting sanctioned goods through a third country?

The company bears full responsibility if it knew or should have known about the final destination of the goods. Since 2026, the EU has been actively applying personal sanctions to organizations in third countries that facilitate the circumvention of restrictions.

Internal links

• EU Sectoral Sanctions: Consequences for Russian Companies — https://www.ratanwalt.com/eu-sectoral-sanctions-impact-russian-companies-legal-guidance
• Unlocking Sanctioned Assets: Legal Mechanisms and Practice 2026 — https://www.ratanwalt.com/unblocking-sanctioned-assets-legal-mechanisms-2026
• Buying a Share in a Russian LLC: Legal Risks and Buyer Protection — https://www.ratanwalt.com/buying-share-russian-llc-legal-risks-buyer-protection