Syed Rahman outlines the latest advice from the Office of Trade Sanctions Implementation.
New guidance has been issued for shipping and freight companies in an attempt to tackle Russia’s efforts to transport banned goods.
The Office of Trade Sanctions Implementation (OTSI) has published best practices and advice to help transportation and logistics companies reduce the risk of them ending up transporting products covered by sanctions on Russia.
OTSI, which was created in 2024 to help combat Russia’s attempts to fund its war in Ukraine, has produced a 17-page list of goods that are at heightened risk of being diverted to Russia. It has also detailed potential red flags that the transport sector needs to be able to recognise and tactics that can be used to overcome these. These tactics include scrutinising paperwork for inconsistencies regarding names and languages used and carrying out visual inspections of items that may be wrongly classified to disguise their ultimate destination or purpose.
OTSI also suggests placing clauses in contracts that stipulate that parties to them will not trade with Russia. It emphasises the need to be particularly careful regarding certain goods - such as advanced computer technology, military hardware and heavy machinery – that are at increased risk of being diverted because of their importance to the Russian war effort.
The guidance includes reminders for conducting checks on the backgrounds of goods and parties involved in a transaction; including screening the names of individuals and entities against sanctions lists.
In a statement, OTSI said: “Reducing Russia's capacity to prolong the war in Ukraine is a key strategic UK objective. Enhanced compliance and due diligence can help prevent Russia's ability to circumvent UK sanctions and access the goods it needs to conduct its war against the people of Ukraine."
Supplement
This new guidance is a supplement to OTSI’s general guidance. A lot of guidance has, therefore, been put out prior to this. But while it could still be argued that this latest guidance could have come earlier, it is a result of industry and sectoral concerns. As such, it is providing advice on many issues that industry has raised. While some of this could possibly have been anticipated, not all of it could have been immediately clear to OTSI.
It should also be remembered that guidance on combating sanctions evasion must, by definition, come as a response to the sanctions evasion tactics that Russia has undertaken. The longer the war continues, the more refined sanctions circumvention practices will become, as will the resulting guidance.
Guidance from the authorities will always be reactive, although there are some areas that OTSI has yet to fully tackle. For example, there are some aspects of digital transformation and cyber security that could be more fully addressed. A broader integration with global standards would greatly assist companies within the sector who have to deal with many different national and international regulations at a time.
