New EU guidelines for companies on how to avoid to help Russia circumvent sanctions

The European Commission has published guidelines for businesses on how to avoid becoming complicit in circumventing sanctions against Russia by trading with third countries.

The European Commission reminds that European companies must conduct “due diligence” when trading with a third country to eliminate the risk that their partners are intermediaries for circumventing sanctions.

For businesses in areas where this risk is heightened, the report provides detailed recommendations and a list of “red flags” that should raise suspicion when assessing a trading partner.

“Russia is applying increasingly sophisticated schemes to circumvent restrictions and is trying to continue to buy goods that its defence industry desperately needs to continue its aggressive war against Ukraine,” the European Commission said.

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This is important, as the latest package of EU sanctions over Russia’s war against Ukraine is primarily aimed at combating the circumvention of existing sanctions against Moscow.

The 11th package of restrictions is aimed at preventing the circumvention of existing sanctions. To this end, a new tool is being introduced to counteract sanctions circumvention. This will allow the EU to restrict the sale and export of sanctioned goods and services to third countries.

Russian independent journalists have recently exposed a scheme whereby Russia imports sanctioned goods, particularly for the military-industrial complex.

An investigation by the Russian non-governmental project Verstka claims that almost all sanctioned goods worth hundreds of billions of dollars continue to enter Russia.

The investigation is based on classified data from Russian customs and communication with knowledgeable interlocutors – logisticians, freight forwarders, and entrepreneurs who know about the supply of sanctioned goods.

The journalists discovered that in the first half of 2023 alone, sanctioned chips made in the West were imported into Russia worth more than $502 million. These components are used to manufacture missiles and other weapons.

Read more in our article Scheme to smuggle sanctioned goods for Russian army exposed.

Recently, it was reported that Germany is investigating a businessman over German electronics in Russian Orlan drones.

Read also: US, UK and EU put pressure on UAE to stop helping Russia in war with Ukraine.