New EU sanctions on South Sudan 2026: what banks and companies must do

Key data

Any Spanish financial entity or company with counterparties in South Sudan or in the East African region has an urgent legal obligation: to verify whether any of its clients, suppliers or partners appear on the updated list of sanctioned parties under Regulation (EU) 2015/735. Council Implementing Regulation (EU) 2026/1402, published on 23 June 2026, modifies that list with new designations or modifications of existing entries.

The regulation entered into force on the same day of its adoption, 22 June 2026, which means that compliance obligations are enforceable from that moment, without any adaptation period.

What does this regulation establish?

Council Implementing Regulation (EU) 2026/1402 applies the EU restrictive sanctions regime relating to South Sudan, originally established in Regulation (EU) 2015/735. The modification consists of updating the annex of designated persons and entities, adding new entries or modifying existing ones.

The restrictive measures applied to designated parties are of two types:

• Freezing of financial assets: all funds and economic resources belonging to designated parties must be immobilized.
• Prohibition of making funds available: it is prohibited to transfer, assign or make available to designated parties, directly or indirectly, any funds or economic resources.

The sanctions regime on South Sudan has been in force since 2015 and has been updated periodically. Each update of the list requires all European entities to carry out a new counterparty verification. This 2026 modification follows the same pattern: it does not change the rules of the regime, but rather expands or adjusts the scope of persons and entities to which it applies.

Economic and operational impact

The direct impact is not a fee or fixed cost: it is the risk of non-compliance. Operating with a designated counterparty—even involuntarily—can result in:

• Administrative sanctions imposed by the competent authorities of each Member State.
• Criminal liability for natural and legal persons involved, according to applicable national legislation.
• Operational blockade: assets linked to operations with designated parties are frozen until resolution by the competent authority.

The immediate operational cost falls on compliance departments, which must update their counterparty screening systems with the new published list. For financial entities with large volumes of customers or transactions in the region, this process may require manual review of cases flagged as positive.

Reputational risk is also relevant: being identified as an entity that has operated with an EU-sanctioned party, even through omission, generates image damage that is difficult to quantify.

Who does it affect?

• Banks and credit institutions with customers or correspondents in South Sudan or in the East African region.
• Investment fund managers with positions in assets linked to the region.
• Exporting companies with active or negotiated commercial contracts with South Sudanese counterparties.
• Logistics and transport operators with routes or customers in East Africa.
• Insurance companies that cover risks or assets related to the region.
• Law firms and advisors that provide services to clients with exposure to South Sudan.
• Any company that maintains commercial or financial relationships, direct or indirect, with persons or entities domiciled or active in South Sudan.

Practical example

A Spanish bank with an active financing line for an exporting company operating in South Sudan receives, on 22 June 2026, the legal obligation to verify whether any of the final beneficiaries of that financing appear on the updated list of Regulation 2026/1402.

If the bank's screening system is not updated with the new entries and processes a transfer to a designated party, the bank will have breached Regulation (EU) 2015/735 as amended. The competent Spanish authority—in this case, the State Secretariat for Economy, which manages the financial sanctions regime—could initiate an administrative penalty proceeding, regardless of whether the bank can claim ignorance. Criminal liability would depend on whether gross negligence or intent is found.

The correct action: update the screening list before processing any operations related to the region, effective from 22 June 2026.

What should companies do now?

1. Immediately update counterparty screening systems with the new entries published in Council Implementing Regulation (EU) 2026/1402. Entry into force was 22 June 2026: any operation after that date must have been verified against the updated list.
2. Review active commercial and financial relationships with customers, suppliers and partners operating in South Sudan or in the East African region, identifying possible matches with the new designated parties.
3. Preventively freeze any suspicious operation until confirming that the counterparty does not appear on the list, and notify the competent authority if a confirmed positive is detected.
4. Document the verification process performed, including date, source consulted and result, to demonstrate due diligence in the event of an inspection.
5. Consult with the legal department or a specialist advisor in international sanctions if there is doubt about the company's exposure or if previous operations with possible designated parties have been detected.

Official source

Consult complete regulation at official source

Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202601402