G7 Jointly Addresses Russian Sanctions Evasion – Why Asian Companies Should Take Note

On September 24, 2024, the G7 nations published, for the first time ever, joint guidance on preventing Russian export control and sanctions evasion (the "Guidance") to restrict Russia's access to critical technologies and military material.

The Guidance targets deceptive tactics by Russia to bypass sanctions and export control restrictions such as conducting procurement via third countries and legalizing parallel imports. Therefore, it remains critical for companies to maintain robust due diligence requirements and take steps to ensure employee awareness of potential sanctions evasion red flags.

Three Pillars of the Guidance are:

1. A Common High Priority List

A Common High Priority List, ("CHPL,") identifies 50 tariff lines that pose a heightened risk of diversion to Russia. The CHPL includes integrated circuits, Computer Numerically Controlled ("CNC") machine tools, and other electronic components used in Russian weapons systems which are critical