On January 7, 2024, the UK government issued guidance to enable UK exporters that work with Common High Priority Items that are critical to Russia’s military development, to insert a “no re-export to Russia” clause in their exporter contracts in order to prevent buyers/importers from re-exporting their goods to Russia. While the clause is not required, the Office of Trade Sanctions Implementation (“OTSI”) urges businesses that export items critical to Russian weapons systems to use the clause in contracts to reduce the risk of a customer exposing them to a possible breach of sanctions.
According to the guidance, many exporters are already inserting the clause in their export contracts as it can be a useful tool to counter the risk of circumvention and diversion. While the exact wording of a “no re-export to Russia” clause is at the discretion of individual businesses, OTSI provides a template that could be considered good practice for contracts involving the export of items relevant to the Russian military complex. However, OTSI emphasizes that businesses interested in drafting, negotiating and including a “no re-export to Russia” clause into existing or new contracts should do so with the help of independent legal counsel.