UK Outlines Russia Compliance Expectations for Forwarders, Warns Against 'Blind' Shipments

“All businesses operating in the freight and shipping sector should be aware of the countries and types of goods to which trade sanctions apply, and the types of activities which could be in breach of sanctions,” the U.K.’s Office of Trade Sanctions Implementation said in the guidance. “Companies should undertake due diligence to ensure that each consignment they handle or process complies with sanctions.”

The guidance outlined the steps that the U.K. government expects forwarders and other shipping businesses to take to counter Russia sanctions evasion, identify red flags and carry out due diligence. Those steps may need to include screening each cargo shipment and every customer. The guidance also warned that postal and express operators have a duty to make sure the goods they’re shipping aren't violating U.K. sanctions.

“Any person or business who knowingly or recklessly provides untrue information to a customs officer may be held criminally liable,” it said.

OTSI said forwarders should carry out “background checks” of their customers and may want to use “additional third-party screening tools to aid with customer due diligence.” Those checks should be carried out continuously to “ensure that the risk has not changed,” even for “established trading partners.”

In addition, the agency warned forwarders and carriers to look out for “any irregularities in the shipper’s request,” consider requesting confirmation from the shipper that shows they have carried out a sanctions risk assessment on their export, and consider adding sanctions-specific clauses to trading conditions and contracts of carriage.

Forwarders should also “check and confirm the contents of the consignments” from customers “insofar as this is possible in the context of your business model.” That may include checking to make sure any export paperwork is authentic and accurate, making sure the language in the paperwork is “consistent with the stated destination,” and verifying that the packing lists with commodity codes and descriptions of each item match those on the commercial invoice and other documents. “If information provided in the packing list is vague, ask the shipper to provide further details,” OTSI said.

Where possible, companies that handle the goods should inspect the consignment to verify its contents if they're transporting sanctioned goods that are at “increased risk of circumvention.” Forwarders should use tamper-evident seals and keep consignments “secure at all stages of transit,” looking out for any signs of “damage or interference.” After delivery, they should check that the information in the bill of lading handed over by the consignee matches the information provided in “your copies of the documentation.”

Another portion of the guidance urged forwarders and carriers to be especially careful when handling “blind shipments,” saying they should accept those shipments only “from trusted partners or parties you have independently verified.” They should also look out for requests from third-party intermediaries wanting to arrange a transaction in which the consignee’s identity is hidden from the original supplier or exporter, adding that they should “verify that the reason for using blind shipping procedures is legitimate, and not for the purpose of facilitating the diversion of goods to a sanctioned country, individual, entity, or shell company.”

Postal and express couriers should be “especially mindful of the risk that the contents of consignments may be falsely declared to avoid detection,” OTSI said. Many sanctioned items sought by Russia can be packaged in smaller consignments and "declared at a value under customs thresholds," so sanctions evaders are taking “advantage” of postal services that benefit from simplified customs processes, such as bulk declarations.

If possible, those couriers should prioritize checks of shipments that contain electronic goods, especially microelectronics, communication devices, parts, power tools, other mechanical components and devices. They should also check packages with “vague or dubious descriptions,” such as “spare parts,” and be suspicious of packages marked as a “gift” when other information suggests the package may be commercial.

OTSI asked those couriers to publish a “sanctioned goods policy” as well, which should “make clear that the export of sanctioned goods to Russia, Belarus, and other sanctioned destinations is prohibited, and that your company is taking steps (for instance, spot checks) to tackle the circumvention of sanctions via third countries.”

“Very few goods are now permitted for export to Russia and Belarus,” the agency said. “Consider implementing checks on all consignments to Russia and Belarus to ensure that sanctioned goods are not being smuggled under false descriptions.”