Mitigation of the risk of non-compliance with EU sanctions

15/04/22

In view of the Russian war of aggression against Ukraine and the situation in Belarus, the EU has adopted various sanction packages against these countries. These sanctions amongst others relate to the import and export of concerned goods (i.e. goods subject to sanctions), but also prohibit the participation in circumvention of these measures.

Now the EU has provided advice on how to mitigate the risk of circumvention of those import and export measures. Circumvention of these measures might occur in case of exports to third countries from where concerned goods can be easily shipped to Russia and Belarus and imports from third countries from where concerned goods can be easily shipped to the EU. Especially exports to and imports from the Eurasian Economic Union (EAEU) require attention, because goods in any EAEU member are in free circulation throughout the EAEU.

What can this possibly mean for your company?

The EU provided some examples of due diligence measures that companies can take in this regard. It is advised to include provisions in import and export contracts to ensure that any imported or exported goods are not covered by the restrictions. This can be done in the following forms, for example:

A statement that the respect of such provision is an essential element of the contract;
A clause committing the importer in third countries not to export the concerned goods to Russia or Belarus;
A clause not to resell the concerned goods to any third party business partner that does not take a commitment not to export the concerned goods to Russia or Belarus; and,
Giving rise to liability in case the contract party does not comply with these clauses.

Although these due diligence measures are not legally binding and provided in the form of an advice, we recommend investigating whether your company has adopted sufficient measures to comply with the sanctions against Russia and Belarus. Especially because the EU announced that EU customs authorities may carry out more strict controls and may ask for conclusive evidence that concerned goods are not imported or exported to Russia and Belarus via third countries.

How can we help?

Should you need any advice on the implementation of sufficient due diligence measures in order to comply with the adopted sanctions, please contact your PwC customs and international trade specialist.