Avoiding Sanctions Circumvention And Penalties: EU/UK Guidance

Western countries are increasingly focussed on the effective implementation of their sanctions regimes. In particular, they are intensifying their demands and expectations on industry to ensure that goods and services are not diverted to (or are used for the benefit of) Russia or a sanctioned person. Failure to take adequate due diligence could itself amount to a sanctions violation.

Overview

The UK and EU have long prohibited the circumvention of their sanctions regimes. It means that companies cannot simply develop clever supply chains or elaborate corporate services structures to avoid their obligation to abide by the sanctions regimes in place. This has traditionally meant that an organisation could be found to breach sanctions where it 'knows or intends' to circumvent those sanctions. However, new guidance from the UK and EU suggest the regulators will start to take a more robust approach to potential circumvention and to expect more of companies to