The UK’s Foreign, Commonwealth and Development Office has released new guidance for non-UK businesses operating outside the UK regarding Russia sanctions compliance. This guidance, which includes country-specific advice for Kazakhstan, Uzbekistan, Kyrgyzstan, Georgia, and Armenia, signifies a heightened level of scrutiny from the UK government in its global enforcement efforts.
While UK sanctions primarily target UK nationals and entities, foreign companies and individuals involved in circumventing these sanctions can face severe repercussions.The guidance highlights risks such as asset freezes by UK institutions, loss of access to UK financial and professional services, and significant reputational damage.
This development underscores the UK’s expectation that businesses in third countries shoudl not facilitate the circumvention of its sanctions, regardless of their operational base. Similar to the US approach, UK sanctions compliance is no longer a purely domestic concern but extends globally. UK authorities intend to pursue any company that aids Russia in accessing prohibited goods and services, thereby undermining the UK sanctions regime. This applies not only to businesses in the five mentioned countries but to any entity assisting Russia in circumventing sanctions. Translated versions of the guidance have been issued to ensure clarity and clarity for international market participants.
To ensure compliance, businesses should:
Conduct risk assessments: Identify potential red flags that could lead to breaches of UK sanctions law.
Establish and update sanctions policies: Ensure all personnel are aware of their obligations and responsibilities.
Map supply chains: Identify any indirect routes through which restricted goods might reach Russia.
Screen partners and customers: Implement standard questioning to confirm that goods or services will not be used in Russia or any other sanctioned country or region.
Monitor for Russian connections: Ensure no goods or services are provided, directly or indirectly, to entities or individuals on the UK Sanctions List.
Check ownership and control: Verify the ownership structures of entities to prevent the use of front companies or complex arrangements to evade sanctions.
Given the UK’s increased focus on third-country circumvention, companies, especially those in logistics, are advised to take these compliance measures seriously.
