Guidance

Countering Russian sanctions evasion - guidance for exporters

Published 7 January 2025

© Crown copyright 2025

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This publication is available at https://www.gov.uk/government/publications/countering-russian-sanctions-evasion-and-circumvention/countering-russian-sanctions-evasion-guidance-for-exporters

Disclaimer

This guidance is intended to support UK exporters in understanding Russian circumvention practices and in reducing the risk of their business being targeted by those seeking to evade sanctions.

While every effort has been made to ensure the accuracy of the information in this guidance, it does not constitute legal advice and cannot be relied upon as such.

It remains the responsibility of UK businesses to fully determine the extent of their specific sanctions risk exposure, and to develop an appropriate set of safeguards and controls tailored to their particular circumstances.  

Consulting the external screening databases indicated in this document is not in itself a defence if you are found to have facilitated the circumvention of sanctions against Russia.  

If you are unclear about any aspect of the Regulations, in particular about whether action you are considering taking could contravene the Regulations, you are advised to seek independent legal advice.

This guidance is specific to trade sanctions targeting Russia, but much of the advice can be translated to other countries where the UK government has imposed trade sanctions, including Belarus, Iran, and North Korea. A full list of UK sanctions regimes is available on GOV.UK.

Foreword

The aim of this document is to support exporters and manufacturers in identifying Russian evasion practices and developing strategies to mitigate the risk of their goods becoming targets of circumvention. It aims to help protect their technology from misappropriation and to prevent the financial loss and reputational harm which could arise as a result of engaging in sanctioned trade.

This guidance document contains:

  • information on the range of goods at heightened risk of being diverted to Russia
  • red flag indicators of potential sanctions evasion via circumvention
  • suggestions for compliance best practice and enhanced due diligence procedures
  • additional resources to aid businesses in managing their risk and meeting their compliance obligations

1. Sanctions evasion and counter-circumvention

Since February 2022, the UK has implemented an extensive system of sanctions and export controls, which restrict Russia’s access to the critical goods and technologies required to sustain its military operations and illegal war campaign in Ukraine. Many partner countries have opted to enforce sanctions in their jurisdictions.

Over £20 billion of UK trade with Russia is now sanctioned, and direct trade between the UK and Russia has fallen to historic lows.  However, Russia is going to great lengths to circumvent sanctions, and continues to procure Western military, dual-use, and other critical goods through third countries, including beyond battlefield technologies.

Russia has demonstrated that it relies on deceptive tactics, such as the use of indirect shipping routes, deliberate falsification of the end-uses of traded goods, and professional evasion networks, to evade established export controls and sanctions enforcement. These methods are still developing at pace, at times without the awareness of partner countries. It is therefore critical that all parties in the supply chain are aware of the diversion risks posed by Russia’s procurement efforts.

Reducing Russia’s capacity to prolong the war in Ukraine is a key strategic UK objective.

It is the responsibility of businesses to adopt appropriate measures to mitigate the risk of unwittingly facilitating Russia’s access to sanctioned goods and technologies.

It may be a criminal offence for a UK person or entity to engage in trade that is prohibited under sanctions, or to intentionally participate in activities knowing that the object or effect of them is to circumvent or to enable or facilitate the circumvention of sanctions and export controls.

2. Key circumvention data

2.1 Common high priority list

Alongside our partners in the European Union, Japan, and the United States, the UK government has developed the Common High Priority List (CHPL). This list highlights items that pose a heightened risk of illegal diversion to Russia due to their importance to Russia’s war efforts. It also aids industry in conducting necessary due diligence. As of this document’s publication, the CHPL includes 50 items which Russia seeks to procure for its war effort.

The list is divided into four tiers, with tiers one and two containing particularly sensitive items.

Tier Description
1 Integrated circuits (also referred to as microelectronics)
2 Electronics components including communications modules and passive electronic components
3A Further electronic components used in Russian weapons systems, with a broader range of suppliers
3B Mechanical and other components utilised in Russian weapons systems
4A Manufacturing, production and quality testing equipment of electric components, circuit boards and modules
4B Computer Numerically Controlled (CNC) machine tools and components

2.2 UK goods at higher risk of circumvention

There are indications that Russia is also seeking to procure the following items from UK companies, often via third countries, which support Russian military and industry. There is some overlap with the CHPL in this list of items:

  • a wide range of industrial machinery, plant and laboratory equipment
  • instruments for aeronautical and radio navigation
  • motor vehicles, engines, and vehicle parts
  • tractors and self-propelled works trucks
  • mechanical shovels
  • centrifugal pumps
  • turbojets and gas turbines
  • oil lubricants
  • printing inks
  • computer monitors, processing units, semiconductor devices, electronic integrated circuits, and apparatus for manufacturing these items

Goods in the following sectors are at generally greater risk of being diverted and re-exported to Russia to circumvent sanctions and export controls. Manufacturers, wholesalers, and exporters in these sectors are advised to implement additional oversight and controls on exported goods:

  • military and dual use goods
  • aerospace  
  • automotive 
  • microelectronics  
  • heavy machinery

2.3 Third-country entities

Russia continues to purchase sensitive goods and western-produced items from entities within third countries, often without governments being aware.

Several countries, including those within the following list, are taking steps to reduce the flow of CHPL goods to Russia from their jurisdictions. Businesses should continually assess the export control environment of countries they engage with.

Companies may wish to conduct enhanced due diligence when exporting at-risk products to certain countries to prevent re-export to Russia, although the risk of each country and individual trade can differ. The UK government is fully supportive of trade with these countries where the end destination is not Russia, or any other sanctioned destination. The inclusion of a country in the list below does not entail any attribution of responsibility to that country for actions of entities within their jurisdiction.

This list has been compiled on the basis of a number of risk factors. This includes data on trade flows of CHPL goods and UK government analysis of trade in UK-origin goods at an elevated risk of diversion. It is by no means exhaustive and will be updated periodically.

For exports of the goods listed above, businesses should consider conducting enhanced due diligence on customers based within, but not limited to, these jurisdictions:

  • Armenia 
  • China, including Hong Kong and Macau 
  • India 
  • Israel 
  • Kazakhstan 
  • Kyrgyzstan 
  • Malaysia 
  • Mongolia 
  • Serbia 
  • Thailand 
  • Türkiye 
  • UAE 
  • Uzbekistan 
  • Vietnam

2.4 The procurement cycle

The procurement cycle below illustrates the different stages and types of entities typically used to acquire goods covertly. Not all stages will necessarily be used in every procurement attempt. Using this model, the end-user typically uses a cover or front company to request goods from networks of complicit intermediaries.

The true end-users of goods procured with the intention of circumventing sanctions are unlikely to approach international suppliers directly or be named as end-users on paperwork. Instead, organisations often use a layered approach to conceal their procurement activities. Closer scrutiny of intermediary companies and apparent end-users can uncover discrepancies.

  1. International suppliers -
    Commodities from a range of sectors are sought from manufacturers or distributors.

  2. Intermediary -
    Trading companies (overseas or domestic) may be complicit, but probably also conduct legitimate business. An intermediary may claim to be the end-user or name another intermediary or front company as the end-user.

  3. Front or shell company -
    An entity acting entirely on behalf of a sanctioned entity. A front company may be a registered business, or solely a cover name. Such companies may be named in international trade paperwork.

  4. The true end-user -
    A sanctioned destination, person, or organisation.

3. Circumvention red flags

The following are potential red flag indicators of export control and sanctions evasion. We encourage industry to use these indicators to guide tailored due diligence on potential and existing trading partners prior to export, and to be alert for other possible indicators not listed below. No single red flag is definitively indicative of illicit activity and transactions should be assessed holistically as part of a thorough due diligence process. These indicators can be broadly grouped along the lines of inconsistencies concerning the product, customer, transaction, and export destination. The points listed in this section are not exhaustive.

3.1 Product

1 - The transaction concerns sanctioned goods, especially those with military or dual-use applications, or any other items flagged as being at high risk of circumvention. 

2 - The product’s capabilities do not fit the buyer or named end-user’s line of business, for example, an order of sophisticated computers for a small bakery.

3 - The item ordered is incompatible with the technical level of the country to which it is being shipped, for example, semiconductor manufacturing equipment being shipped to a country that has no electronics industry.

3.2 Customer

1 - The customer is, directly or indirectly, involved in the supply, sale, purchase or delivery of restricted or high-risk goods, particularly to  destinations for which additional due diligence is suggested.

2 - The customer has business ties to a sanctioned entity or person, a branch office in Russia, or other connections of concern.

3 - The customer has previously entered into a joint venture or cooperation agreements with designated persons or entities, or maintains other connections with designated persons.

4 - The customer is associated with companies that are suspected or known to be selling sanctioned goods or technology to Russia, based on publicly available sources.

5 - The customer is physically located in, adjacent to, or otherwise maintains connections with countries where Russia operates procurement networks.

6 - The customer or their address is similar to one of the persons or entities on the UK Sanctions List. This may also include personnel and telephone numbers matching or suspiciously similar to any found on publicly available sanctions lists.

7 - The customer shares their premises or registered address with multiple businesses or holding companies dealing in comparable goods. Whilst not a definitive indicator of circumvention, this may suggest the use of multiple front companies to obfuscate illicit trade in sanctioned and controlled goods.

8 - The company address provided is a residential address.

9 - The customer utilises complicated structures to conceal their involvement in transactions, for example, layered letters of credit, front companies, intermediaries, or brokers.

10 - The use of trust arrangements or complex corporate structures involving offshore companies or those with links to countries friendly to Russia.

11 - The customer had a change of ultimate beneficial ownership shortly before or after sanctions were imposed.

12 - The transfer of shares from sanctioned entities to non-sanctioned entities incorporated by the same individuals or entity (often with registered offices at the same address).

13 - Sudden changes in business activity after 24 February 2022, or after any subsequent changes in export controls or sanctions. This is particularly the case if the customer has little or no prior history of purchasing the item in question.

14 - A new customer whose line of business includes trade in military or dual-use goods, incorporated overseas after 24 February 2022.

15 - A customer with whom your company has no prior business relationship or knowledge thereof, or who is apparently new to the market and seeking a high-risk product. This is especially pertinent if the customer is based in a destination for which additional due diligence is suggested.

16 - Significant changes to the company structure of an existing customer. For example, acquisition by another company or individual, change of location, change of operations, or a significant change in registered directors.

17 - Anomalous increases in the volume or value of orders placed by existing customers.

18 - The shipping route or product concerned is inconsistent with the customer’s expected business activity. For example, the item does not fit the purchaser’s line of business.

19 - Examining the company’s business dealings to date reveals inconsistencies, or a suspicious lack of business activity in the period following the date of incorporation.

20 - The customer has little to no business background.

21 - The customer is unfamiliar with the product’s performance characteristics but still wants the product.

22 - The customer attempts to obfuscate the product’s ultimate destination and purpose by any means including being vague about details, providing incomplete information, or is evasive when further information is requested – especially information regarding:

  • the product’s end-use or end-user

  • whether the product is for domestic use or re-export

  • other third-party involvement in the transaction

  • company ownership. A sanctioned individual or entity may seek to disguise ultimate beneficial ownership of the company using complex corporate or trust structures, or via proxies. For example, relatives or other close associates

23 - All communications are routed via a representative who seems to possess general power of attorney, or senior management staff are never available for discussions when requested.

24 - The end-user or end-use is purportedly civilian, but research indicates that the customer or other parties to the transaction have military connections. For example, an address which is, or is co-located with, a military facility in country for which additional due diligence is suggested.

3.3 Transaction

1 - Payments from entities located in third countries which are not otherwise involved in the transaction.

2 - Requests to use a non-standard payment route. For example, outside of SWIFT, via smaller overseas banks, or using cryptocurrency.

3 - The customer is willing to pay cash for an expensive item when the terms of sale would normally require financing.

4 - Dividing an invoice value into smaller amounts to remain under the export control limits, or an otherwise anomalous approach to structuring payments with the apparent aim of avoiding detection.

5 - Customer pays significantly above the known market rate for those goods.

6 - Last-minute changes to parties involved in the transaction from an entity in Russia or Belarus to an entity in another country.

7 - The country of the stated end-user is not the same as the country from which the order was placed.

8 - Country codes of customer telephone numbers do not match those of the destination country.

9 - Payments or transfers to importers, exporters, agents or brokers that export to countries and ports near the border of sanctioned countries. Any country that shares a land border with, and has not imposed sanctions on Russia will inherently be an attractive location for Russia to use for sourcing sanctioned goods.

10 - Supporting documents do not list the actual end-user, are otherwise vague, or provide incomplete or inconsistent information.

11 - Indirect transactions, for example, using intermediaries or shell companies, with no clear economic rationale.

12 - Transactions involving entities with little to no web presence. For example, the absence of company website or domain-based email account, or inconsistent information provided on any company websites or profiles that do exist.

13 - False, inaccurate, or missing documentation.

14 - Any indications or suspicion that documentation (or material particulars therein) are fraudulent.

15 - The description of the goods on the trade or financial documentation is non-specific or misleading.

16 - Any indications or suspicion of attempts to record goods under a false Harmonised System (HS) code not subject to sanctions or export controls.

17 - The customer declines routine installation, training, or maintenance services associated with the product.

18 - Vague delivery dates, or deliveries planned for remote destinations.

19 - Disproportionate delivery costs are charged without a clear or justified reason.

20 - The use of ship-to-ship transfers.

21 - A freight-forwarding firm is listed as the product’s final destination.

22 - Using multiple third-country freight forwarders or shippers on a single transaction.

3.4 Export destination

1 - Additional due diligence is suggested for the destination country (as outlined by the criteria in section 2.3 above).

2 - Transit via a country for which additional due diligence is suggested.

3 - The destination country is actively engaged with a sanctioned country.

4 - Shipments involving individuals, companies, or a shipment route located in a country with weak export control laws or weak enforcement of those laws.

5 - The shipping route is abnormal for the product or the destination. For example, the country concerned does not normally import that product.

6 - Using an unclear transportation route, or complex route involving multiple third countries.

7 - Transporting an item through Russia to a final destination elsewhere.

8 - Analysing company sales data indicates a significant increase in exports of a specific product, for example, semiconductors or machine parts, to a third country. Especially if trade in that product to that destination was previously limited or non-existent.

4. Due diligence - best practice

It is the responsibility of UK businesses to fully determine the extent of their specific sanctions risk exposure, and to develop an appropriate set of safeguards and controls tailored to their particular circumstances.

It is essential to stay up to date with any amendments to The Russia (Sanctions) (EU Exit) Regulations 2019, and to consider how any additions and changes affect your business’s compliance obligations. 

The UK Sanctions List should also be regularly reviewed to ensure business arrangements involving any designated persons or entities are terminated. 

Decision-making processes should take account of the risks associated with sanctions.  When a business identifies a sanctions risk, it should take steps to fully address that risk. This could include conducting your own research, requesting further information from the entity, and taking legal advice if unsure about your obligations. 

Whilst there is no one size fits all approach, some suggestions are outlined below to assist businesses in mitigating the risk of their products being targeted by Russian circumvention efforts.

4.1 Strategic risk assessment

Undertake a strategic risk assessment. Assess your business’s exposure to the risk of being targeted by those seeking to circumvent sanctions, identifying key threats and business-specific vulnerabilities.

1 - Map out the types of products, transactions, and economic activities within your range of business activity, prioritising transactions involving higher-risk products for more extensive due diligence screening.

2 - Design and implement controls, processes and procedures to mitigate your business’s specific risks.  Key processes should include:

  • enhanced due diligence on current and prospective customers and business partners, especially with regard to corporate structures, supply chains, and ownership
  • taking steps to verify the end-use and end-user to avoid diversion of goods to Russia
  • instigating additional safeguards for the highest-risk product lines

3 - Where relevant, consider any business exposure via overseas subsidiaries or factories in third countries. Overseas subsidiaries and manufacturing operations are sometimes targeted by front companies seeking to procure sanctioned items on behalf of Russia.  Ensure that any overseas business operations are subject to appropriate oversight and consider implementing additional controls on the flow of goods from any overseas sites.

4.2 Enhanced due diligence

Implementing an enhanced due diligence model to screen customers and business partners forms a key pillar of mitigating your business’s risk of facilitating circumvention.

Enhanced due diligence screening should most heavily target transactions involving higher-risk products and export destinations which meet the criteria outlined in section 2.3. It should reflect your specific business model, geographic and sectoral areas of operation, and related risk assessment. Taking this approach can help to mitigate the risk of facilitating sanctions evasion through the early detection of unusual transactions which may be indicative of a circumvention pattern.

1 - With both new and existing customers, implement enhanced know your customer (KYC) data collection processes to verify the customer’s identity, beneficial ownership structure, background, and range of business operations.

2 - When assessing a transaction with a new or existing customer, investigate and verify:

  • the product’s end-user and end-use. Obtain the end-user certificate and verify its accuracy wherever possible

  • the identity and role of any third parties involved in the transaction, including brokers, sub-contractors, and freight forwarders

  • the payment process, looking out for any irregularities in relation to comparable transactions

  • shipping and transportation, looking out for any irregularities in the typical shipment route for the export destination or transit arrangements for the product concerned 

3 - An initial step when dealing with a new customer should be to check whether the entity or any known directors have been designated on the UK Sanctions List. Cross-check the list for similarly named companies operating out of the same physical address.

4 - Consider a new customer’s motives in initiating contact with you in the context of their business activities. For example, do they have a reliable, documented history in engaging in this kind of transaction with other UK exporters?

5 - Utilise internal customer databases to cross-check new trading partners. For example, have you previously traded with any other companies with the same physical address, or with the same named contacts or directors, bank accounts, or contact details such as telephone numbers?

6 - Due diligence in higher-risk transactions should articulate the customer’s full ownership and control structure so that all relevant parties can be screened. Further investigation into a company’s structure and beneficial ownership may indicate that the company is ultimately controlled by a designated entity or person.

7 - Request self-declarations of ownership details and organisational structures from your customer directly, and always cross-check these against reliable independent sources.

8 - Utilise the company records database made available by Companies House and overseas equivalents to cross-reference identity information.

9 - Examining official records can indicate convoluted or opaque corporate structures, companies sharing directors and registered addresses, and other inconsistencies in a potential customer’s background history.

10 - If relevant, you may also consider adding a no export to Russia clause to your contracts. While it is not legally required in the UK, many UK exporters already include such a clause or other statements in their contracts. Including these in your export documents could reduce the risk that your customer involves you in what may be deemed a breach of sanctions.

4.3 Screening tools

A range of additional sanctions-oriented screening tools are available to support businesses in conducting customer due diligence checks.

Please be advised that the tools suggested here are not UK government resources and are operated by external organisations. Consequently, we cannot verify their veracity or completeness.

It remains the responsibility of UK businesses to fully determine the extent of their specific sanctions risk exposure, and to develop an appropriate set of safeguards and controls tailored to their particular circumstances.

Tool Description
Open Sanctions The Open Sanctions database collates open-source data for business and civil screening purposes
War Sanctions The War Sanctions portal provides a range of resources to support businesses in conducting due diligence on potential counterparties, investments, and agreements
Trade Integrity Project (TIP) TIP is a searchable database listing third-country entities that have shipped CHPL items to Russia since 2023, according to publicly available trade data
KSE SelfSanctions and LeaveRussia The SelfSanctions and LeaveRussia databases, created by Kyiv School of Economics (KSE), collates data on foreign companies operating in the Russian market supported by research conducted by Yale University on business divestment from Russia

4.4 Ongoing monitoring

Those seeking to evade sanctions are highly resourceful. Circumvention routes and techniques are frequently adapted in an effort to evade detection. It is important to remain vigilant to any emerging signs that your business has been targeted for the purpose of circumvention.

Tracking your business’s trade flows and buyer patterns over a period of time may also reveal significant shifts in exports of higher-risk products to specific destinations, indicating the possibility that these products are being procured by intermediaries for diversion to Russia.

Businesses should continuously evaluate their approach to assessing their sanctions risk exposure as the circumvention landscape evolves, to ensure compliance procedures and due diligence frameworks remain effective.

The process of mapping business-specific vulnerabilities should be repeated at regular intervals as business customers and trade flows change, new sanctions are adopted, and circumvention techniques adapt.

Even with established trading partners, due diligence should be repeated at intervals to ensure that the risk has not changed. For example, a change of directors, organisational status, or transactional patterns may indicate a more significant shift in a customer’s business operations.

Keep written records of due diligence and compliance activities as part of your business’s broader risk management strategy.

Russia needs Western technology to continue its illegal war against Ukraine. Preventing Russian access to this technology is a government priority.

5. Enforcement and reporting

HMRC and the Office of Trade Sanctions Implementation (OTSI) within the Department for Business and Trade work together to enforce breaches of trade sanctions.

HMRC is responsible for enforcing trade sanctions on goods crossing the UK border in line with its role as the UK’s customs body. As part of its customs role, HMRC is also responsible for measures relating to strategic exports - such as military and dual-use goods - and the provision or procurement of services that are ancillary to the import or export of goods.

OTSI is responsible for:

  • sanctioned services that are not ancillary to the movement of goods
  • the movement of sanctioned goods, technology and ancillary services outside the UK, where a UK person is involved

If you have any indication that your products have been supplied or diverted to Russia, from the UK, please contact HMRC. If you discover you have imported or exported goods or transferred controlled technology without an appropriate export licence in place, it is very important to consider reporting the irregularity to HMRC (sometimes known as ‘voluntary disclosure’) as soon as possible. Details for making a disclosure can be found on the Export controls: military goods, software and technology page.

If you suspect that you, or someone else, has breached trade sanctions within OTSI’s remit, you should report it to OTSI as soon as possible using the online service: Report a suspected breach of trade sanctions. Guidance on OTSI’s enforcement approach can also be found on its website. For all other enquiries, you can use the OTSI contact form.

If you would like to discuss any wider concerns you may have regarding sanctions evasion and circumvention, please contact the Department for Business and Trade’s export sanctions policy team.

6. Additional resources

Please note that the UK government is not responsible for the contents of any external resources or screening tools indicated here.  Companies’ usage of these tools is at their own discretion.

6.1 UK government resources

6.2 International partners

6.3 Further reading

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