HM Revenue and Customs (“HMRC”) recently announced that it concluded a compound settlement with an unnamed UK exporter that allegedly “made goods available to Russia” in breach of The Russia (Sanctions)(EU Exit) Regulations 2019. According to HMRC, the UK exporter paid £1,160,725.67 to resolve the claim – a penalty that was reportedly paid to HMRC in May 2025. According to the Notice to Exporters (“NTE”) 2025/18, this is the largest compound settlement that HMRC has concluded in connection with a Russia sanctions offense.
HMRC also shared two key compliance lessons related to this case. The first involves the risk of exporting goods to Russian companies operating in “third countries.” HMRC warned UK companies that export sanctioned goods to Central Asia other regions where Russian companies tend to operate, to make sure that the consignee, end-user, or other party that receives exported goods is not a Russian-owned company. Failing to do may result in a breach of UK trade sanctions. The second compliance lesson addresses the risk of being uninformed and the importance of learning about new trade sanctions before they take effect. HMRC urged companies to sign up for UK sanctions email alerts to avoid unintentionally breaching sanctions and encouraged companies to review their trading relationships as soon as new sanctions are introduced.
HMRC also clarified what it means to be “connected with Russia” as it is used in Russia regulations that prohibit making certain goods, technology or software available to “a person connected with Russia.” According to HMRC, a person is considered to be connected with Russia if they are an individual or association that is “ordinarily resident in Russia or “located in Russia,” or if they are person (other than an individual) that is incorporated under the law of Russia or domiciled in Russia.
HM Revenue & Customs Case Study