Doesn't matter, to a degree, the rules apply to anyone selling to Europeans regardless of where they are based. How and if non-compliance will be prosecuted is a more complicated matter.

Indeed. As far as I can tell, it's only been tested in a limited sense when there are relatively clear violations, such as drug markets, blatant piracy, or gambling. But extend that a bit further, and you get into the sort of murky territory where you're forced to blacklist entire countries because they have crazy people running them.