Time to Review Due Diligence?

In a recent blog on the 22nd of May we discussed how the EU was tightening and enforcing Trade Sanctions against Russia, this week we say the UK Government issuing guidance and clarification on the scope of goods and items that it considers to be sanctioned.

Trade sanctions are used as a political tool to restrict or prohibit trade with a particular country or entity in order to achieve specific goals, such as promoting human rights, preventing the spread of weapons, or punishing countries that engage in harmful activities. The ultimate aim of trade sanctions is to bring about change in the targeted country's behaviour.

Sanctions against Russian Organisations and Persons have been ongoing and increasing since the invasion of Ukraine in February 2022. On the 30th of May the UK issues a Guidance Document on Russian Sanctions and listing high Priority items. The list is divided into four Tiers, with tiers one and two containing particularly sensitive items:

• Tier 1: Integrated circuits (also referred to as microelectronics).

• Tier 2: Electronics items related to wireless communication, satellite-based radio navigation, and passive electronic components.

• Tier 3: Discrete electronic components, electronics cabling and connectors, digital cameras and related optical components.

• Tier 4: Manufacturing, production and quality testing equipment of electric components and circuits.

As mentioned in our previous blog, Russia is seeking to procure restricted goods such as those on this list, via non-sanctioning countries. Businesses should ensure that they consider these risks. Businesses should undertake due diligence to ensure that the end destination of these products is not Russia. Now is probably a good time to review your due diligence processes and asses the risk of diversion of the goods you are exporting.

At Ceterus Consultants we deliver consultancy in Business Management, Quality Assurance and Export Controls. Our services and rates are tailored to customers requirements.