The UK has released sector-specific guidance for the freight forwarding, shipping and logistics services industries on countering the evasion of sanctions by the Russian Federation (Russia) by setting-out clear expectations for freight forwarders, carriers, haulers, customs intermediaries and postal/ express operators.
This guidance, issued by the Department for Business and Trade (DBT) and the Office of Trade Sanctions Implementation (OTSI), signals that front-line logistics actors will now be expected to conduct a higher standard of due diligence and be able to identify a wider array of red-flags.1 It addresses, with specific examples, misclassification under Harmonized System (HS) codes (i.e., tariff classification numbers used to identify goods), vague goods descriptions, “blind shipment” requests (i.e., arrangements that conceal the consignee or supplier), “switch” Bill of Lading instructions, small-parcel channel abuse by postal/express operators, third-country trans-shipment and payment anomalies.
The UK sector-specific guidance mirrors the stepped up compliance rules and expectations being issued in other jurisdictions. Regulatory and enforcement agencies around the world are placing the compliance burden not just on the buyers and sellers of products, but to “intermediaries” or “facilitators” such as shipping companies, logistics service providers, freight forwarders and transport intermediaries. 2
Due Diligence Standard
Firstly, regarding “Know-Your-Customer” (KYC) checks, the guidance asks companies to re-screen counterparties when owners or trading patterns change, and to embed a clear “no re-export to Russia” clause in their terms of carriage, so they can refuse or stop risky movements when they appear to have an ultimate destination in Russia. The need for such clauses is illustrated by the fact that His Majesty’s Revenue and Customs (HMRC) recently concluded a £1.16 million compound settlement with a UK exporter that had made goods available to Russia via third-country entities.3
Firms should repeat KYC on existing partners, monitor patterns over time and include sanctions clauses such as “no re-export to Russia,” steps that would have made the third-country network in the aforementioned HMRC settlement far harder to run through ordinary freight channels.
Where possible, operators should verify the identities of both shipper and consignee through background checks, drawing on the non-exhaustive screening checklist in section 3.2 of the circumvention guidance for businesses, as well as any third-party screening tools noted in section 4.3 of the aforementioned guidance.4 In parallel, they should check whether the shipper, the consignee or any known directors appear on the UK Sanctions List. Even where relationships are established, due diligence should be refreshed periodically so that changes in directors, corporate status or transactional patterns are captured. Staff should watch for requests or behaviors that depart from normal practice.
As to “know your cargo,” the guidance moves beyond declarations. It asks firms to reconcile HS codes, descriptions, weights, dimensions, labels and serial numbers and, where risk factors exist, to check the goods themselves rather than relying only on paperwork. A “Bill of Lading” is just a document that proves that the shipper took the goods and spells out the carriage terms. The importance of carrying out this level of due diligence is demonstrated by the fact that on 19 May 2025, Polish customs seized five tons of Boeing aircraft tires that had been mistakenly declared as car or bus tires while transiting Belarus and Russia.5 This new guidance expects freight handlers to detect these kinds of mismatches by comparing documents to the physical attributes of the shipment, as well as by inspecting where appropriate.
Standard procedures should incorporate an awareness of diversion risks associated with blind shipments. As a rule, blind shipment requests should be accepted only from trusted partners or from parties whose identity and bona fides have been independently verified. Enquiries from intermediaries who seek to conceal the consignee’s identity from the original supplier or exporter should prompt verification that blind shipping is being used for a legitimate purpose rather than to divert goods to a sanctioned country, individual, entity or shell company.
In April 2025, the Kingdom of Norway’s Financial Supervisory Authority reported fake protection-and-indemnity certificates issued to Russian-linked tankers by “Romarine AS,” which shows why simple reliance on a document is insufficient; the new approach expects independent checks before accepting carriage. 6 Regarding paperwork authenticity and service providers, the guidance puts the burden on carriers and agents to verify that insurers and other counterparties actually exist and are authorized.
Operators should consider whether it is unusual to ship the product in question via blind methods (e.g., specialized manufacturing parts) and should treat discrepancies or anomalies as potential indicators of concealment. If asked to issue altered Bills of Lading (i.e., “switch bills”) for the blind party, operators should ensure that all documentation aligns with the known shipment process and party identities, as well as that any replacement documents describe the goods accurately and record correct quantities. Even on standard shipments, staff should remain alert to later requests to change paperwork or labels in transit, particularly where those features resemble blind shipping and were not part of the original arrangements disclosed to the exporter.
Circumvention Red Flags
The new guidance supplies a list of red flags tailored for identifying circumvention attempts within the freight and shipping sectors. These indicators are intended to guide tailored due diligence on customers and transactions; operators should remain attentive to other warning signs that may arise in context. No single red flag is determinative of illicit activity; transactions should be assessed holistically as part of a thorough due diligence process.
The risk increases where a consignment contains sanctioned goods, particularly items with military or dual-use applications or other products identified in the business guidance as carrying a higher risk of circumvention. Goods may be misclassified under HS codes that are similar or adjacent to those covering high-risk items; misclassification is especially suspect where the packet’s size and weight closely resemble those of controlled goods. Mismatch between a product’s capabilities and the consignee’s line of business is another warning sign, for example sophisticated computing equipment ordered by a small bakery. Quantities that are unusual for the product, including multiple smaller shipments apparently designed to stay below export-control thresholds or customs-value limits, merit scrutiny. Vague or generic descriptions in paperwork (e.g., “spare parts,” “samples” or “electrical goods”) may be innocent in some contexts yet can signal concealment, particularly where the shipper requests unusual packaging or labelling, asks to remove documentation or otherwise seeks to disguise contents. Discrepancies between declared product, quantity and packaging on the one hand, and the consignment’s actual dimensions or weight on the other, are red flags, as are labels in a language inconsistent with the stated destination. Finally, resistance to inspection or a general lack of transparency about cargo content should be treated as a significant concern.
During pre-screening, contracting and document review, warning signs include false, inaccurate, incomplete or unusually vague paperwork; inconsistencies across documents, such as a recipient named on transport papers who differs from the party on the commercial invoice or customs declaration; and indications that goods have been assigned HS codes that avoid sanctions or export controls. Non-specific or misleading product descriptions, or client requests that you insert information you know to be incorrect or needlessly vague, are risk indicators, as are documents presented in Russian or another language inconsistent with the declared destination. Commercial anomalies also matter: willingness to pay materially above market rates for the product and route, particularly where the path is unnecessarily complex or circuitous; repeated splitting of consignments and invoicing into smaller lots to stay under control thresholds, sometimes with later consolidation in a third country; and non-standard payment routes, including methods outside Society for Worldwide Interbank Financial Telecommunication (SWIFT), use of small overseas banks, cash or cryptocurrency. Operators in the freight and shipping sector should view as suspect any payments for services that arrive from a third country, business or bank account not named in the file.
Postal And Express Operators
Finally, there is a tailored chapter for postal and express operators that treats small-parcel channels as a known evasion vector and converts general diligence into programmatic requirements: operators are urged to publish a “sanctioned goods policy,” embed sanctions clauses in terms and conditions, prioritize checks on electronics, communications devices, drones and parts, power tools and mechanical components, scrutinize “gift” declarations that read as commercial, monitor transactional data over time for patterning below tariff or control thresholds, and, given that very few goods may lawfully go to Russia or Belarus, consider checks on all consignments destined for those two jurisdictions.
Takeaways
Put simply, the bar has been raised and the examples show why: reconcile HS codes and descriptions with the physical shipment, capture serial numbers where relevant, scrutinize labels and languages, challenge last-minute party or route changes, treat unusual or third-party payments as high-risk and build sanctions-specific KYC and “no re-export to Russia” commitments into contracts so facilitation cannot be excused by a clean screening hit; reliance on databases alone is expressly not a defense. A freight operator applying these controls would have had stronger grounds to refuse, delay or report each of the shipments described above, which is precisely what the DBT and OTSI now expect in ordinary operations. As experts in international trade law and sanctions compliance, we can review your Russia-exposed logistics, update your contracts with sanctions-specific clauses and train frontline teams to meet DBT/OTSI expectations. Contact us to design and implement a practical compliance program (screening, controls and escalation paths), so that your operations stay lawful and resilient.
- Countering Russian sanctions evasion: guidance for the freight and shipping sector - GOV.UK
- See, for example, the December 2023 “Quint-Seal Compliance Guidance” issued by the U.S. Department of Treasury and four other U.S. government agencies, or the October 2024 Compliance Communique issued by the U.S. Office of Foreign Assets Control. Our colleagues in the U.S. have issued a series of alerts on those developments. November 2024 Alert.
- £1.1 million compound settlement for sanctions breach
- Countering Russian sanctions evasion - guidance for businesses – section 3.2; Countering Russian sanctions evasion - guidance for businesses – section 4.3
- Poland seizes aircraft tires bound for Russia in suspected sanctions breach
- Firm issued fake insurance for Russian oil tankers, Norway’s FSA says
