On 4 May 2026, UK Prime Minister Keir Starmer joined the European Political Community Summit in Yerevan – marking the first visit of a UK Prime Minister to Armenia – to sign a joint declaration with his counterpart, Prime Minister of Armenia Nikol Pashinyan. The declaration covers, among other things, commitments to deepen bilateral trade and investment ties and “unblocking regional transport communications.”
Just a few weeks prior, however, the UK authority on trade sanctions introduced “much tougher” controls to prevent UK goods from reaching Armenia and other “third countries” that pose a higher risk of diversion into Russia.[2] The introduction of such controls – which will come into force on May 13, 2026 – fundamentally changes the compliance landscape for UK exporters. To mitigate exposure and minimize risk of onward product flows to Russia, firms will need to rely on enhanced counterparty screening, supply chain mapping, ownership analysis, and on-the-ground intelligence.
On 22 April 2026, the UK’s Office of Trade Sanctions Implementation (“OTSI”) introduced a Sanctions End-Use Controls (“SEUC”) regime whereby exporters may be required to obtain a specific licence where the government identifies a risk that goods could be diverted to sanctioned destinations.[3] As it stands, UK exporters cannot apply for SEUC licences in advance; instead, the mechanism is triggered through an “informing notice” issued by OTSI after which export without a licence becomes a criminal offense, exposing companies to seizure of goods, financial penalties, and/or prosecution. The UK government’s Russia evasion guidance includes a non-exhaustive list of countries with an elevated risk of diversion: Armenia, China, India, Israel, Kazakhstan, Kyrgyzstan, Malaysia, Serbia, Thailand, Turkey, the UAE, Uzbekistan, and Vietnam.[4]
Until now, OTSI would flag its concerns to an exporter only if there was a suspicion of potential diversion to Russia, where goods are channelled into Russia via a third country, e.g., in the South Caucuses, Central Asia, or the Middle East. Under the new system, OTSI can oblige UK exporters to obtain a license if OFSI identifies any concerns about possible diversion. UK officials are increasingly concerned that certain categories of goods exported into Armenia and other “high-risk” jurisdictions after 2022 could be re-exported into Russia via regional trading networks, exposing structural weaknesses in end-use controls.[5] In February 2026, following an investigative report by The Guardian, Labour MP and business minister Chris Bryant ordered a review of exports of UK carbon fiber equipment to an Armenian firm with links to Russia.[6]
Since its launch in October 2024 “to crack down on companies dodging Russian sanctions,” OTSI has not issued any public fines or penalties. By contrast, its sister agency, the Office of Financial Sanctions Implementation (“OFSI”), established in 2016, has developed a mature enforcement record; one that includes multi-million-pound penalties for Russia-related sanctions breaches and, most recently, fining an Apple subsidiary £390,000 for breaching sanctions against Moscow.[7]
The introduction of Sanctions End-Use Controls regime represents a notable shift from general oversight to preventative intervention.[8] OTSI can now impose pre-export licensing requirements based on its own assessments of available intelligence. Further, the SEUC will extend to goods not already subject to dual-use controls. This includes consumer goods, electronics, industrial inputs, and high-value retail products that would not traditionally fall within export control frameworks.
For relevant firms, this significantly increases compliance expectations. UK exporters must now consider risks associated with not only the immediate counterparty, but also transit jurisdictions, intermediary entities, and potential for downstream resale. This is where strategic investigative capabilities become central to effective compliance.
Investigators typically combine global trade data, maritime tracking, corporate registry analysis, and other open-source intelligence tools to identify anomalous or high-risk trade patterns. Trade data can reveal indirect routing structures and intermediary hubs consistent with known evasion and circumvention pathways. Marine tracking and vessel tracing data can be used to validate the physical movement of goods and identify potential inconsistencies between declared and actual shipping behavior. Targeted research in corporate registries, ultimate beneficial ownership registries, and available financial statements helps to peel back the layers of corporate ownership and identify links to Russian business interests. Enhanced social media reviews and conversations with well-placed sources further provide the context necessary to distinguish real compliance risks.
The introduction of the SEUC marks a structural shift in UK sanctions enforcement: OTSI appears intent on transitioning into a more prospective and intelligence-led control body. In this environment, the ability to connect fragmented data from a variety of sources and understanding the on-the-ground reality of trade with high risk-of-diversion jurisdictions is invaluable.
[1] https://www.primeminister.am/u_files/file/documents/Declaration-UK-eng.pdf
[2] https://www.skadden.com/insights/publications/2026/05/uk-introduces-sanctions-end-use-controls
[3] https://www.gov.uk/government/publications/sanctions-end-use-controls-guidance-for-businesses/sanctions-end-use-controls-guidance-for-businesses
[4] https://www.gov.uk/government/publications/countering-russian-sanctions-evasion-and-circumvention/countering-russian-sanctions-evasion-guidance-for-exporters
[5] https://www.theguardian.com/business/2026/apr/22/uk-firms-to-face-tougher-checks-on-export-licences-to-bolster-sanctions-on-russia
[6] https://www.theguardian.com/politics/2026/feb/28/decision-allow-uk-exports-cygnet-texkimp-armenian-firm-review-russian-links
[7] https://www.gov.uk/government/publications/imposition-of-monetary-penalty-apple-distribution-international-limited
[8] https://www.skadden.com/insights/publications/2026/05/uk-introduces-sanctions-end-use-controls
