Do the New UK Sanctions End-Use Controls Apply to Your Business?

Summary

• From 13 May 2026, a new licensing requirement applies to exporters who receive a written government notice warning that specific goods are at risk of diversion to a sanctioned destination, even where those goods are not otherwise controlled under strategic export legislation.
• The trigger is targeted: no licence is needed until an 'informing notice' is issued by the Department for Business and Trade (DBT) or HMRC. Exporters who have not received one should continue as normal.
• Proceeding with an export after receiving an informing notice without first obtaining a licence is a criminal offence and can result in goods being detained, civil monetary penalties, public naming, and prosecution.
• Russia-related circumvention is the government's stated enforcement priority, with the highest-risk transit routes currently running through Central Asia, the Gulf, and South-East Asia.
• Civil monetary penalties are imposed on a strict liability basis: OFSI and the Office of Trade Sanctions Implementation (OTSI) can fine businesses even where no knowledge of the breach is shown, which makes due diligence the only reliable protection.

The new Sanctions End-Use Controls may apply to your business, and if they do, getting it wrong is a criminal matter. From 13 May 2026, the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 introduce a new Regulation 55A across all UK trade sanctions regimes, giving the government the power to require a licence before a UK exporter ships specific goods to a non-sanctioned third country where there is a credible risk of onward diversion.

The UK government has been transparent that the primary driver is Russia sanctions evasion, and that the mechanism is designed to close a gap that has long frustrated regulators: once goods crossed the UK border, there was no tool to stop them from being rerouted through a friendly third country to Moscow. For businesses with distribution networks in Central Asia, the Gulf, or South-East Asia, that gap is now closed.

This article explains how the controls work, which businesses are most exposed, what to do if a notice arrives, and how to structure your compliance processes before one does.

The Sanctions End-Use Controls were introduced by the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026, which come into force on 13 May 2026. They add Regulation 55A to eleven sanctions regimes: Belarus, North Korea, Iran (including the nuclear regime), Libya, Myanmar, Russia, Somalia, Syria, Venezuela, and Zimbabwe. The architecture is cross-regime deliberate, though the government’s enforcement guidance makes plain that Russia evasion is where resources are currently focused.

The Sanctions End-Use Controls only apply to goods not already controlled under the UK’s strategic export control legislation. If your product appears on the military or dual-use control lists and you already require a licence under those regimes, you are in the wrong queue. The two systems are separate.

How the Controls Work

There is no new blanket licensing requirement for any category of goods. The control only fires when the government has identified a specific diversion risk attached to a particular exporter, shipment, route, end-user, or intermediary, and has communicated that risk in writing through a formal informing notice.

The notice is issued by DBT, either directly by OTSI or through HMRC’s national clearance hub. Once received, the exporter faces a binary choice: apply for a licence before proceeding, or stop the transaction. There is no grace period. OTSI is not accepting advance licence applications from exporters who have not yet received a notice. The government guidance on the Sanctions End-Use Controls published on 21 April 2026 sets out the process in detail, including worked case studies showing both approvals and refusals.

Licence applications are assessed individually. DBT will weigh the nature of the goods, the diversion risk posed by the route or end-user, the exporter’s compliance history, and any available intelligence about the ultimate recipient. If the licence is granted, the export may proceed, sometimes subject to conditions. If refused, the goods cannot be sent to that destination by that route.

Russia Evasion and the Highest-Risk Routes

The government has been direct about where it expects to deploy these controls first. Its Countering Russian Sanctions Evasion guidance identifies goods on the Russia Common High Priority List as the primary concern. These are Western-sourced components critical to Russian weapons systems: electronics, bearings, machine tools, optical equipment, and precision machinery.

The transit routes carrying the greatest risk run through Central Asian jurisdictions (particularly Kazakhstan, Uzbekistan and Kyrgyzstan), the Gulf states (mainly the UAE), Türkiye, and parts of South-East Asia. The EU’s 20th sanctions package, adopted on 23 April 2026, is instructive here: it deployed the EU’s own anti-circumvention tool for the first time, specifically against Kyrgyzstan, after that country persistently re-exported EU-origin machine tools and telecommunications equipment to Russia. The UK mechanism operates on similar logic.

Businesses with distribution agreements in those regions, whether for industrial equipment, electronics, chemicals, or precision components, should treat this as a live risk. Informing notices are being issued now.

What Your Business Should Do

When it comes to sanctions, we always advise clients to start with the due diligence process. The Sanctions End-Use Controls do not change existing record-keeping obligations, but they do put a premium on knowing your supply chain one or two steps beyond your immediate buyer. If you sell to a distributor in Kazakhstan who resells to customers the government suspects are connected to Russian entities, the informing notice will arrive with your name on it. Our trade and export control sanctions team can carry out a supply chain assessment and advise on your specific exposure.

Six steps will reduce that exposure:

• Map your distribution network against high-risk destinations. Cross-reference your customer list against the government’s Countering Russian Sanctions Evasion guidance and the Russia Common High Priority goods list. If your products appear on that list and your route passes through a flagged jurisdiction, the risk is real.
• Screen counterparties at the point of each transaction, not just at the start of a relationship. Sanctioned entities change their corporate structures, and intermediaries who were clean on onboarding may not be clean today.
• Obtain end-use statements for elevated-risk applications. Ask the buyer to confirm in writing the identity of the ultimate end-user and the intended use. Keep that document. If a licence application becomes necessary, the quality of your due diligence file will directly influence the outcome.
• Train your logistics and sales teams. Informing notices may arrive through HMRC at the border as well as directly from DBT. A freight forwarder who does not recognise what the notice means and ships anyway can expose your company to criminal liability. The government’s published case studies make that consequence explicit.
• Appoint a senior compliance owner. Someone in your organisation needs to own the response to an informing notice: how to contact OTSI, how to submit a licence application, and how to place a hold on a shipment within hours of a notice arriving.
• Seek legal advice before the notice arrives rather than after. The licence application process works better when the exporter can demonstrate a track record of structured compliance, and that track record cannot be built overnight.

Regarding penalties, civil monetary penalties are imposed on a strict liability basis under SAMLA. OTSI does not need to prove you knew of the breach — only that one occurred. OFSI’s enforcement framework, reformed in February 2026, now offers cumulative reductions of up to 70% for voluntary disclosure and co-operation. That discount is available only if you self-report before enforcement action begins.

Wrapping Up

The Sanctions End-Use Controls reflect a broader shift from reactive prosecution to proactive disruption. Set alongside OFSI’s reformed penalty framework, the expansion of OTSI’s remit, and the first criminal charge for a Russia sanctions breach brought by the National Crime Agency in April 2026, the direction is consistent: the UK is building an enforcement apparatus that can act earlier, act harder, and reach further than before. Businesses that have taken the time to map their exposure and build a credible compliance file before a notice arrives will find that conversation with OTSI considerably easier. For those who have not, our sanctions compliance service can provide a rapid assessment.

Our Experience

Whilst this legislation is new, the sanctions regulations in the UK are being constantly amended, in particular the Russia Regulations. We therefore have significant experience of dealing with these regulations, including the Trade Regulations. We have acted for:

• A Kazakh state company in the energy sector on developing their compliance policy, specifically in relation to global supply chains, covering the sanctions regimes of the US, the UK, the EU, Australia, Canada, and Kazakhstan.
• We advised a UK company, with subsidiaries in India, on the export of medicinal products to Russia through alternative supply routes (from the UK through its Indian subsidiary to Russia).
• We advised a multi-national chemical company, headquartered in the UK, on the supply of chemical products through the EU and the UAE to Russia, providing both UK and EU law advice.
• We advised a UK chemical company on the export of chemical products to Russia, and divestment of its Russian subsidiary from Russia, successfully obtaining a licence from the Export Control Joint Unit (responsible for trade sanctions licencing) and approval from OFSI.

Frequently Asked Questions

Do I need to take any action right now, before receiving an informing notice?

Yes, businesses should audit their export distribution networks and due diligence processes against the government’s Countering Russian Sanctions Evasion guidance and the Russia Common High Priority goods list, particularly if they trade through Central Asian, Gulf, or South-East Asian markets, even though no licence is required until a notice is issued.

Do the Sanctions End-Use Controls apply to services as well as goods?

No, Regulation 55A, as introduced, applies only to goods and related technology; services are regulated by separate provisions under the relevant sanctions regulations and fall outside the new licensing gate.

What happens to goods already detained at the border when a notice is issued?

HMRC may hold the goods pending the outcome of a licence application or allow them to be returned to the exporter; the goods cannot proceed to the originally declared destination until either a licence is granted or the informing notice is withdrawn.

Can I apply for a licence in advance if I think my goods might be affected?

No, OTSI is not accepting advance licence applications; the licensing process only opens after receipt of a written informing notice, though you can prepare your compliance documentation and map your supply chain in anticipation.

My goods are already on the dual-use control list. Do the new controls add anything?

No, the Sanctions End-Use Controls only apply to goods not otherwise controlled under the UK’s strategic export control legislation, so if your products already require a licence under the dual-use or military control lists, you continue to use that existing process.

If your business has received an informing notice or if you are concerned about supply chain exposure to these new controls, please get in touch with us on +44 (0) 203 972 8469 or email mail@eldwicklaw.com.

Please note that this article does not constitute legal advice.