In a landmark 526 pages long ruling, the 16th criminal chamber of the Paris civil court found on 13 April 2026 Lafarge S.A, four former top executives, including the CEO, two former security managers and two intermediaries guilty of financing terrorism in the groundbreaking case regarding the payment of over $5 million by Lafarge’s Syrian subsidiary to terrorist groups, including ISIS between 2013 and 2014 to maintain the activity of its cement plant in the surrounding of Aleppo, Syria. The plant whose construction cost $680 million started operating in 2010 (para. 78). The objective for the plant was to supply 30% of Syrian market cement needs (para. 78), competing against Turkish cement industry.
This case is historic in many respects: (1) for the first time a French company has been convicted for financing a terrorist organisation, (2) the parent company has been convicted for financing a terrorist organisation through its subsidiary and (3) two former top executives were sent out to jail immediately after the ruling delivery.
In a separate proceeding in the United States, in October 2022, Lafarge S.A and its Syrian subsidiary pleaded guilty before a federal court to conspiring to provide material support to foreign terrorist organisations and agreed to pay a $778 million criminal fines and forfeiture.
Financing terrorism
The court found that Lafarge had established a system of payments to armed groups, including terrorist organisations in order to keep its Syrian cement plant running and protect its economic interests. Opaque financial arrangements were used to conceal these payments which took the forms of (1) security payments and (2) the acquisition of raw materials.
1. Security payments: Securing financial interests
Security payments intended to facilitate employees’ movement, their release in case of arrest and the movement of trucks were made directly by Lafarge Syrian subsidiary’s security managers and indirectly through intermediaries to armed groups operating around the plant. While some of these armed groups, such as the Free Syrian Army and Kurdish forces, were not considered terrorist groups, others, notably Jabhat al-Nusra, ISIS, and Ahrar al-Sham, were subject to international sanctions and classified as terrorist groups under French law (para. 115-137). Such payments were implemented in September 2012 (para. 418).
ISIS appeared on the company’s accounting records from 1 November 2013 (para. 119), and in July 2014, Lafarge Syrian subsidiary’s security manager met with the number two of ISIS regarding the resumption of operations at the plant with a tax to be negotiated (para. 131). The cooperation between the company and ISIS was demonstrated by the issuance by ISIS of passes for the company’s employees (para. 134-137).
2. Acquisition of raw materials: Godsend for ISIS
The acquisition of raw material for cement production included the purchase of hydrocarbons covered by restrictions under European Regulation 36/2012 prohibiting trade in these products with Syria, whether the suppliers were under the control of the official regime or terrorist groups, and mineral materials, including sand and pozzolana, not subject to specific sanctions but whose supply from or for the benefit of terrorist groups fell under sanctions of European Regulation 881/2002 and French criminal law (para. 138-152).
The court noted that unlike Al-Qaeda-linked groups historically dependent on external financial networks, ISIS benefited from its rapid territorial expansion, covering a vast area rich in raw material to earn money and reinvest it in its terrorist attacks, including those perpetuated abroad (para 138).
3. Defendants’ criminal liability: Business partners of terrorist organisations
Article 421-2-2 of the French criminal code states that “Also constituting an act of terrorism is the act of financing a terrorist enterprise by providing, collecting, or managing funds, securities, or any other property, or by giving advice for this purpose, with the intention of seeing such funds, securities, or property used, or knowing that they are intended to be used, in whole or in part, to commit any of the acts of terrorism provided for in this chapter, regardless of whether such an act actually occurs.”
In order to assess the defendants’ criminal liability, the court analysed the nature of the groups receiving Lafarge’s funds and whether the defendants were aware of the terrorist nature of such groups. Recalling the interpretation of article 421-2-2 by the Court of Cassation (French’s highest judicial court), the judge noted that it was of little importance to establish liability whether the defendants intended the funds to be used by the terrorist groups for terrorist acts, and even less important whether these acts were actually committed (para. 411).
Regarding Ahrar al-Sham, several defendants, including Lafarge S.A and its former CEO, contested its terrorist nature, notably based on the absence of its designation as a terrorist organisation by the UN or the EU (para. 413). The court recalled that case law has long excluded this condition for determining the terrorist nature of an organisation, pointing out the partial analysis of case law by the defendants’ counsels (para. 413). It is enough for the court to establish the concrete participation in the preparation of acts of terrorism as defined under article 421-1 of the French criminal code to determine the terrorist nature of an organisation (para. 413). Therefore, considering Ahrar al-Sham’s ideology, its links to Al-Qaeda and its crimes against the Syrian population, the organisation falls under the qualification of a terrorist organisation (para. 413). Additionally, the investigation demonstrated that the defendants were aware of the terrorist nature of the organisation, as emails showed (para. 413).
As for Jabhat al-Nusra, in addition to meeting the criteria of a terrorist organisation under French law, the organisation was designated as such on international lists since December 2012 (para. 414). In particular, the listing on the US Department of State’s website of international terrorist organisations as an offshoot of Al-Qaeda was reported and considered public knowledge in a note dated December 2012, from the Observatory of Arab Countries, communicated to Lafarge S.A as part of a consulting mission (para. 414).
Regarding ISIS, the court noted that “the defence’s arguments generally attempt to minimise or even deny the defendants’ knowledge of the terrorist nature of ISIS/DAESH/the Islamic State. The court does not adopt these arguments, which appear futile as they disregard the objective elements presented in the investigation file, as well as those presented at the hearing in the reports and precise interrogations, supported by emails shown during the proceedings. It is established, and this has not been disputed, that the Islamic State (ISIL/ISIS/Daesh) was included in security payments … from November 2013 and the subject of numerous emails related to the case between October 2013 and September 2014. … The Islamic State … as an entity linked to Al-Qaeda was listed by the UN and the EU since May 30 and June 28, 2013.” (para. 415).
When analysing the financial flux between Lafarge and the terrorist organisations, the court stressed that the use of intermediaries to act as a shield, as well as the desire to prevent Lafarge’s name from appearing on the security passes and the hidden and/or deceptive methods of remuneration of the main intermediary, “demonstrate in themselves, the intentional element, in that the defendant did not want to appear as what it would ultimately be, namely, a business partner of terrorist organisations (emphasis added)” (para. 417).
Regarding the moral element of the act of financing terrorism, the court noted that the law only requires the intent to transfer the funds knowing that they are intended to be used by entities identified a terrorist, regardless of the actual use made of them, since these funds will necessarily have contributed to the maintenance and development of their operational capacities (para. 427). Moreover, the court recalled that a strictly economic and financial motive must not be confused with the intention, i.e., the awareness of contributing to the financing of terrorist groups with the knowledge of the nature of their actions and therefore of the purposes for which the funds may be used (para. 427). “All the defendants, driven by a desire for profit for the economic entity they served, or in some cases for direct personal gain, organised, validated, facilitated, or implemented a policy involving the delivery of funding to the terrorist organisations established around the cement plant.” (para. 427).
Lastly, regarding the arguments brought by some defendants that the company was victim of a racketeering economy, which therefore dismisses the intentional element of the offence, insofar as maintaining the security of employees was an imperative that compelled the company to hand over funds to terrorist organisations, the assessment of emails exchanged between the defendants during the hearing never revealed the concept of extortion, but at the most, the use of the term “taxation”. On the other hand, emails and meeting notes revealed the use of the terms “discussion” and “negotiations” with the terrorist groups (para. 428). “It is certain that Lafarge S.A had full decision-making autonomy and could therefore cease operations at the plant when its management became aware of the financial demands of the terrorist entities. By agreeing to pay these terrorist organisations, Lafarge S.A and its representatives assessed the benefits the company could obtain in order to maintain its operations, such as unblocking roads, ensuring the free movement of trucks and plant employees through the issuance of passes, and finally, potentially neutralising Turkish competition.” (para. 428).
Violation of international sanctions
In addition to financing terrorism, Lafarge S.A and four former top executives, including the CEO, were also convicted for violating international sanctions, in violation of article 459 of the French custom code. By financing terrorist groups, the company and its representatives violated European Regulation 632/2013 which classified Jabhat al-Nusra and ISIS as groups linked to Al-Qaeda, as well as European Regulation 881/2002 which imposes economic sanctions on organisations listed therein (para. 586-612).
The company’s counsel argued the inapplicability of European Regulation 881/2002 considering on one hand the principle of territoriality of European sanctions that only apply to funds within the EU and on the other hand, the Syrian nationality of the subsidiary and main intermediary (para. 594). The court however recalled that while the acts were committed within the framework of the activities of the Syrian subsidiary, the parent company exercised total control over its subsidiary, both in terms of capital, operational and financial matters (para. 595). Indeed, Lafarge S.A, through a Cypriot subsidiary and the establishment of intra-group loan agreements, disbursed funds located within the EU to the Syrian subsidiary which not only enabled it to avoid defaulting on its payments but also to address its cash flow difficulties and ensure payments to terrorist entities with the concerted aim of maintaining the plant’s operations (para. 595).
The fate of Syrian employees
The initial case brought against Lafarge S.A included the charge for endangering others (article 223-1 of the criminal code), here Syrian employees who kept the plant running despite the pressuring presence of armed groups and terrorist groups around the plant. In 2021 and in 2024, the Court of Cassation rejected this charge considering French law did not apply to the employees’ working contract which was ruled by Syrian law.
In parallel, Syrian employees filed a civil case in relation to the offence of financing terrorism.
1. Terror endured by Syrian employees
In January 2012, as the presence of armed groups increased in the region around the plant, the Syrian subsidiary initially relocated its employees to the neighboring city of Manbij and then, starting in April 2012, consolidated them within the factory itself. In July 2012, foreign employees were evacuated, leaving only the Syrian employees, who were subjected to mismanagement and to kidnappings for ransom by armed groups (para.11). One former security manager confirmed the occurrence of 11 kidnappings (para. 301).
Nevertheless, during the hearing, some defendants argued that the continuation of operations in Syria had to be done while ensuring the security of Syrian employees (para. 255, 278, 282, 289, 321).
This theory was undermined by the testimonies of 11 former Syrian employees who described the terror they felt when passing through checkpoints held by terrorist groups when commuting, during which they could be searched and interrogated, as well as the “death passage” riddled with snipers when collecting wages at the bank in Aleppo (para. 386-396).
The court noted that “this seemingly humanist and socially conscious argument was in reality cynical and merely a fallacious pretext brandished to justify decisions made exclusively in the financial interest of Lafarge S.A, or even its representatives and executives.” (para. 613).
2. The offence of financing a terrorist enterprise, a “preventive” offence, hindering civil action by Syrian employees
Under French law “when, during proceedings before a court, it is argued that a legislative provision infringes upon the rights and freedoms guaranteed by the Constitution, the Constitutional Council may be seized of this question upon referral by the Council of State or the Court of Cassation, which shall rule within a specified period” (article 61-1 of the Constitution). In order to be transferred to the highest courts, the question must meet the following criteria: (1) the contested provision is applicable to the dispute or proceedings, or forms the basis of the prosecution; (2) it has not already been declared constitutional by a decision of the Constitutional Council, unless there has been a change in circumstances; and (3) the question is not frivolous.
In this case, out of seven priority questions of constitutionality, three were raised by former Syrian employees, all relating to the exclusion of the possibility of characterising direct harm caused to victims of the offence of financing a terrorist enterprise (article 421-2-2 of the criminal code and its interpretation by the Court of Cassation and its interpretation of article 2 of the criminal procedure code), arguing such an exclusion constituted a violation of the right to effective remedy, the principle of equality before the law and the principle of safeguarding human dignity as it deprived the right to seek remediation. Indeed, former Syrian employees reported having been concretely exposed to a risk of death or traumatic anxiety at each crossing of checkpoints and roadblocks manned by terrorist groups in a context maintained and fueled by payments made by their own employer (pages 69-82).
However, the court ruled that all questions must be regarded as lacking in seriousness and therefore be rejected. In fact, the court considered that in ruling that the offence of financing a terrorist group cannot cause direct harm, the Court of Cassation did not deprive individuals of the right to seek compensation from a criminal court for personal harm directly resulting from the commission of an offence, but only that the offence of financing a terrorist group could not, by its very nature, directly cause personal harm. Therefore, there can be no infringement of the right to an effective judicial remedy guaranteed under the Constitution since the conditions for the admissibility of a civil action apply equally to all claimants in an identical situation and access to a judge remains, in any event, preserved in order to have the civil action adjudicated (pages 69-82).
Later in the ruling, when assessing the civil action filed by 193 former Syrian employees (and 149 victims and their relatives of the terrorist attacks perpetuated by ISIS on 13 November 2015 in Paris), the court underlined that “the offence of financing terrorism is a so-called “preventive” offence which aims to cut off the financial resources of terrorist enterprises in their plans to harm human life and the foundations of the Nation.” (para. 647). Following case law of the Court of Cassation, the court noted that the offence of financing terrorism can only harm the public interest (para. 650). While the court emphasised that individuals who filed the civil action are direct or indirect victims of terrorist acts and that their powerful testimonies conveyed the consequences of these serious acts on their lives, the court held that “the offence of financing terrorism is a so-called “preventive” offence, in that it aims to prevent terrorist acts from being carried out, thereby punishing behavior that undermines the fundamental interests of the State. Consequently, while terrorist acts obviously cause direct and personal harm to victims, the same cannot be said of the offence of financing a terrorist enterprise.” (para. 650). Therefore, the civil action was rejected.
Behind criminal liability: Governance failures
Beyond the criminal liability of the eight defendants, the investigation revealed serious governance failures, which, even though do not constitute criminal offence, resemble, at least, a collective failure.
1. The Syrian context off the radar of the legal department
As a preamble, the court noted that “The members of the legal department did not appear to have been particularly proactive in monitoring the situation in Syria, given that it was a country whose government was subject to international sanctions and whose territory was fragmented into several areas, notably controlled by terrorist organisations.” (para. 187).
Interviewed during the preliminary investigation, the head of legal stated she had provided secretarial services to the board of directors and had several teams under her responsibility: one coordinating regional legal departments, another managing the legal aspects of significant financial transactions, and a third handling competition, compliance, and construction contracts. She specified that she had personally attended some security committee meetings but could not recall any specific mentions of Syria (para. 189).
She explained, somewhat vaguely, a legal position circulated within Lafarge in 2013, regarding the application of international sanctions to the activities of Lafarge S.A and its Syrian subsidiary. The chosen approach appeared to be to consider the subsidiary, a non-European company, not subject to European regulations. She claimed, however, to know nothing about the terrorist designations of local armed groups or the successive resolutions targeting them, attributing this lack of knowledge to the absence of consultation or information sharing by the national director (para. 189).
One can argue that considering the situation in Syria, it is rather surprising, to say the least, that the legal department did not ensure a proactive monitoring of (1) the armed conflict, (2) the stakeholders taking part in it and their qualification as terrorist organisations, and (3) compliance with international sanctions.
In particular, various press articles from spring 2013 confirmed the knowledge, from that time, of the nature of Jabhat al-Nusra and ISIS (para.14). Therefore, even without information sharing by the national director, the legal department should have raised concerned about the risk linked to maintaining operations in Syria. Furthermore, the legal position on the application of European regulation to the Syrian subsidiary seems rather weak considering the ownership and capital control of the subsidiary by a European entity.
2. Information shared during security committee meetings ignored
Lafarge’s security department was under the authority of the head of human resources who was the chair of the security committee meetings (para. 209). Importantly, the security committee did not have a decision-making role (para. 335).
Meetings were organised each month, the minutes of which were shared to all members (para. 26). Members of the committee were the head of security, members of the executive committee corresponding to the heads of the countries mentioned, the deputy directors general in charge of operations, the heads of legal, social policies, insurance and communication (para. 332).
It is noteworthy that until 2016, the head of security who was responsible for protecting the company’s staff and property was assisted at the group level by only one person (para. 332) and that local security managers were not under his management (para. 333).
Hearings established that functional departments other than security did not consider themselves concerned by security issues citing superficial information transmitted in security committee meetings due to the large number of cement plant situations to be addressed. In particular, for instance, the head of legal deemed she was not in charge of implementing processes designed to ensure compliance with international financial sanctions (para. 13). In 2013, meeting procedures changed: support functions were only invited when there was a topic of interest to them (para. 339).
Each meeting whose minutes were included in the documents examined by the court contained a section dedicated to Syria with the first notable incidents occurring as early as 2012, concerning the kidnapping for ransom of a driver followed by shootings approaching the plant, leading to decision-making meetings bringing together several defendants. In the following months the emergence of the terrorist threat was mentioned (“the presence of Al-Nusra extremists“; “tensions between the Kurds of the PYD and (…) salafist networks (Al-Nusra Front, now listed as a terrorist organisation by the US)“; in May 2013, the deterioration of security conditions due to clashes between the various factions, including the “Salafist fighters” repeatedly referred to as “salafist terrorist networks” and “Al-Nusra,” was described; ISIS was mentioned for the first time in July 2013) (para. 26).
In September 2013, the joint threat posed by Jabhat al-Nusra and ISIS, as well as their attempts at extortion, appeared to be the main item on the agenda of the security committee regarding Syria: “Since July 2013, logistical flows and personnel movements have been disrupted, and sometimes even blocked, by Islamist groups, including the National Army (AN) and ISIS. These groups demand a “tax” to allow trucks and other vehicles to pass. Bruno Pescheux and Jacob Waerness have even been summoned by ISIS (…). The presence of these Islamist groups constitutes the main threat we must consider. It is becoming increasingly difficult to operate without negotiating directly or indirectly with these networks, which are classified as terrorist organisations by international organisations and the United States. The major difficulty lies in assessing the extent of their demands and threats and, consequently, the limits we want to set for the site’s operation (emphasis added)” (para. 26). On the following meeting in October 2013, negotiations conducted with the various stakeholders that had enabled the resumption of operations at the plant were mentioned (para. 26).
One may wonder what the purpose of the security committee meetings was, as none of its members, and this, despite their function, were concerned by the nature of the information shared. Neither the presence of terrorist groups around the plant, nor the mention of negotiations with them arise the slightest concern or raise any questions among members. Considering the responsibilities of members of the security committee, in particular, members of the executive committee and the head of legal, it was reasonable to expect them to take stock of the information being discussed and challenge decision-making.
3. The absence of a compliance department and gaps in internal control
As previously mentioned, compliance was under the head of legal. The deputy legal director explained he had been involved in implementing a compliance policy while highlighting that there was no compliance department within Lafarge but “these functions were carried out within the framework of strong internal control.” (para. 42). The head of internal audit shared for his part that regarding Syria, no audit report had been drawn up on this country during his time in this position (until 2014), due to the inability to meet the required security conditions, which had not given rise to any reaction from either Lafarge’s management or the audit committee (para. 43).
At the subsidiary level, the person responsible for legal conformity explained that he had not been in charge of the entire compliance process and that he had never had access to contracts established with the main intermediary (para. 58). On his side, the head of internal control, initially under the authority of the financial director and then under the country director, was responsible for verifying the proper implementation of the control processes defined at the group level. He described certain inconsistencies detected, without having uncovered any suspicious transactions, in particular no financing of terrorism (para. 59).
At the hearing, Lafarge’s representative considered that the Syrian subsidiary’s internal control demonstrated “a certain robustness, even though the events had revealed procedural flaws and circumventions that were not attributable to Lafarge S.A, which also had its own internal control” (para. 381).
When analysing Lafarge’s overall governance structure, we can note two major failures: (1) the lack of clarity within Lafarge’s framework of responsibilities regarding compliance and (2) the inefficiency of the management chain. In particular, beside the fact that compliance and internal control failed to identify that the company was doing business with terrorist organisations, the absence of audit report on Syria did not raised question from the audit committee which in itself constitutes a failure.
4. The Lafarge’s board of directors that does not ask questions
In May 2012, Lafarge’s CEO reported to the board of directors on the continuation of the company’s operations in Syria “in a particularly difficult context linked to the current crisis.” (para. 29).
According to a board member, Syria was only mentioned during three board meetings in May 2012, February 2013 and July 2013, in a rather vague manner and without mention of security issues or the agreed methods for addressing them (para. 50). Other members added that Syria had only been discussed at the board meetings in terms of the economic performance of the local entity and the valuation of the assets held in that country, but never in an operational way (para. 53-54).
Given the “particularly difficult context” in which Lafarge was operating in Syria, one could have expected board members to ask questions about how operations were being conducted, especially as it was common knowledge that the situation on the ground was deteriorating over the months and to challenge decision-making. In particular, some board members had undeniably knowledge of the risks linked to operating in a conflict zone (two were also on the board of Total which stopped its operations in Syria in 2011 due to the embargo on oil and two were also on the board of BNP Paribas (including its CEO), which was under investigation in the US for violation of embargo in Sudan (and for which the bank was fined in 2014 for nearly $9 billion). One could have reasonably expected these directors to be critical of Lafarge CEO’s decision to maintain operations in Syria.
At the local level, a member of the Syrian subsidiary’s board of directors (who was also in charge of Lafarge’s cement activities in the Middle East until January 2012) described the subsidiary’s board as a a mere rubber-stamping body (para 34). This does not appear as a surprise considering the composition of the subsidiary’s board of directors preventing independence (in particular it included a minority shareholder of the Syrian subsidiary and Lafarge deputy director general of operations, both defendants in this case, the minority shareholder being the main intermediary with terrorist organisations (para. 74, 633)).
Conclusion
This case sends a strong message to companies operating in high-risk contexts and to their top executives: accountability can no longer be evaded through corporate structure and delegation of power. Their criminal liability is on the line. Despite acts committed within the framework of the activities of a subsidiary which has its own governance and local treasury, a parent company which is directing strategic decisions of its subsidiary can be held liable for the illegal acts committed by the subsidiary. Likewise, a CEO cannot hide behind his employees to avoid accountability.
Beyond criminal liability, this case also underlines the importance of strong governance structure coupled with robust human right due diligence process (heightened process in case of high-risk context). It is key that support functions, particularly legal, compliance and internal audit, take a proactive approach. Those functions must be structured in a way scope of responsibilities is clearly defined and reporting centralised. Additionally, direct reporting channels to the board of directors must be established to ensure independence of control and ensure accountability of the CEO. In fact, without such direct channel, in a case like this one where the CEO is directly involved in illegal actions, there is no mechanism to internally hold him/her accountable, especially if directors do not have a proactive approach, asking questions during board meetings. Board members must also take their role as CEO’s supervisor seriously. One may wonder whether people who collect director positions in several companies simultaneously can actually fill their responsibilities rightly.
While this is a landmark ruling for corporate accountability, one cannot forget the sense of incompleteness from the point of view of Syrian employees. Would the facts take place today, Syrian employees could use the Duty of Vigilance Law to seek damages in line of the recent ruling of the Paris civil court in the case of Yves Rocher which confirmed that the law applies to the activities of French companies’ subsidiaries operating abroad.
In parallel to the appeal proceedings filed by defendants, a second case for complicity in crimes against humanity against Lafarge is still at the investigation phase.
To be continued!