Guidance to identify possible risks of sanctions circumvention

The European Commission published a guidance note for EU operators on “Implementing enhanced due diligence to shield against Russia sanctions circumvention”. The objective of the guidance is to help EU operators identify, assess, and understand the possible risks of sanctions circumvention – and how to avoid it. This guidance aims at providing a general overview of what EU operators need to do when conducting due diligence in their work, as required by EU law.

Under EU law, EU operators have an obligation to carry out due diligence when trading with third countries to ensure that their business partners are not circumventing EU sanctions. The Commission’s guidance note is intended as a practical guide outlining the successive steps to be applied by EU operators when conducting strategic risk assessments. This should mitigate as much as possible their exposure to sanctions circumvention schemes. In addition, for the European operators most exposed to this risk, it sets out guidelines for implementing enhanced due diligence, including by providing best practices with regard to the assessment of business partners, transactions and goods.

The guidance also provides a list of circumvention red flags. These red flags relate to business partners and customers and are indicators designed to alert EU operators to possible risks when they enter into a commercial relationship with a new trading partner.

All guidance published on the implementation and enforcement of the EU sanctions adopted as a response to Russia’s aggression against Ukraine may be found here, which is part of the broader Commission website dedicated to the sanctions against Russia.