UK sanctions guidance for Georgian businesses
Source: gov.uk (2025-08-19)

Information about UK sanctions and relevant local laws to support compliance of non-UK businesses operating in Georgia.

This guide is produced by the Foreign, Commonwealth and Development Office (FCDO) to help businesses in Georgia that are seeking to comply with UK sanctions.

This guide is general, so you should also refer to the relevant up-to-date legislation, including Governmental Decrees.

While every effort has been made to ensure the accuracy of the information in this guide, it does not constitute legal advice and cannot be relied upon as such. If you are unsure about your obligations in any given case, you should take independent legal advice.

This guide is specific to sanctions targeting Russia, but the UK has other sanctions regimes in place. View a full list of UK sanctions regimes (https://www.gov.uk/government/collections/uk-sanctions-regimes-under-the-sanctions-act).

1. Aim of this guide

This guide is published by the UK government to help businesses in Georgia to be aware of:

restrictions in Georgia’s national laws relevant to doing business with persons sanctioned by the UK and with Russia

the risks of losing access to services and goods provided by UK and other international banks and suppliers. This may happen if they are concerned that you may be dealing with sanctioned persons or exporting sanctioned goods to Russia

practical steps you can take to manage the risks of potentially severe disruption to your business

2. Context

The UK and its international partners have implemented sanctions on an unprecedented scale in response to Russia’s invasion of Ukraine. The UK has designated over 2,000 individuals and entities and has imposed wide-ranging restrictions on trade and economic activities involving Russia.

UK sanctions aim to:

encourage Russia to cease activity which destabilises Ukraine or undermines its territorial integrity, sovereignty and independence and

promote the payment of compensation by Russia for damage, loss or injury suffered by Ukraine since February 2022 as a result of Russia’s invasion

The UK government will keep these sanctions in place until these objectives have been achieved.

3. Why this matters to businesses in Georgia

3.1. Circumvention of UK sanctions

Russia is going to great lengths to circumvent sanctions and continues to procure Western military, dual-use and other critical goods through third countries, including battlefield technologies. Russia relies on deceptive tactics, such as indirect shipping routes, falsification of the end-uses of goods and professional evasion networks.

For example, in the context of Georgia, this might include:

A firm in Georgia may receive an order from a Russian importer for goods that are subject to UK sanctions and so cannot be obtained directly from the UK.

The Georgian firm orders the goods from a UK supplier without informing them or others involved (such as banks, insurers, shippers) that the end-user of the goods is in Russia.

The UK supplier exports the goods to the Georgian firm, which then re-exports them to Russia.

This type of practice and others like it constitute the circumvention of sanctions. These risks may affect all parties in a supply chain, irrespective of the form of their involvement or their size. The UK, alongside G7 partners, committed to take action on circumvention in 2024 (PDF, 768 KB) (https://www.g7italy.it/wp-content/uploads/Apulia-G7-Leaders-Communique.pdf).

3.2. Who must comply with UK sanctions

UK sanctions are instruments of UK law. However a breach does not need to occur within UK borders for UK enforcement authority to be engaged. There simply has to be a connection to the UK, which we call a ‘UK nexus’.

UK sanctions apply to all persons within the territory and territorial sea of the UK, and to all UK persons wherever they are in the world. This means that individuals and legal entities who are within or undertake activities within the UK’s territory must comply with UK sanctions.

In addition, all UK nationals and legal entities established under UK law, including their branches must also comply with UK sanctions, wherever their activities take place. Other connections to the UK can also create a UK nexus. All cases will be fact dependent.

Throughout this guidance we refer to ‘UK Persons’, meaning those who must comply with UK Sanctions (what is stated about UK Persons will also apply to non-UK Persons who are within the territory or territorial sea of the UK).

UK Persons who breach UK sanctions may become liable to penalties or prosecution in the UK, potentially including severe fines. They are expected to have in place strong and effective measures for compliance, including ensuring that no goods or services that they supply to a third country are diverted to Russia or to sanctioned persons.

For further information on UK nexus and the UK’s sanctions enforcement powers, view Financial sanctions enforcement and monetary penalties guidance (https://www.gov.uk/government/publications/financial-sanctions-enforcement-and-monetary-penalties-guidance/financial-sanctions-enforcement-and-monetary-penalties-guidance) (available in English only).

3.3. Risks for Georgian businesses

However, while only UK Persons are legally obliged to comply with UK sanctions, non-UK persons who facilitate the circumvention of UK sanctions face certain risks, as follows.

3.3.1. You may be sanctioned

The UK may impose sanctions directly on you as an individual or on entities that you own or control if you are involved in activities that could contribute to Russia’s invasion of Ukraine,

The UK has already imposed sanctions on this basis on businesses in a range of third countries that have been identified as engaged in activity which undermines the objectives of UK sanctions against Russia.

Even if you are not a UK Person, becoming subject to UK sanctions can have serious consequences for your business and other financial dealings. UK sanctions bind UK nationals and entities everywhere. Therefore, if you are designated by the UK, it will prevent UK nationals, businesses, and any other persons in the UK from providing you with access to the UK economy. In addition, many international businesses may voluntarily choose not to do business with you – behaviour often described as de-risking.

In practice, this may mean:

all UK businesses must, and many international businesses may, refuse to conduct any business with you as well as with any entities that you own or control. This could mean that UK businesses refuse to supply goods to you, purchase goods from you, repair or service your equipment, or provide most professional and business services to you.

all UK banks must, and many international banks may, freeze any of your assets that they hold and would refuse to provide you with any services

if insurance or shipping/freight services are to be provided by UK firms, they will also refuse to take on your business if you or any of the other parties or goods concerned are sanctioned.

3.3.2. You may be considered a high risk by UK suppliers

UK sanctions may impact your business if you do not take the requirements of UK sanctions into consideration within your own business operations.

This is particularly the case where UK persons are involved since they are required to ensure that their activities do not circumvent UK sanctions. If a UK company (including a UK bank) supplies you with goods or services, they will want to be assured that these will not be passed on to, or be for the benefit of, a UK-sanctioned person, or to Russia or to a ‘person connected with Russia’ if that would be in breach of UK sanctions. (A ‘person connected with Russia’ means an individual or a combination of individuals who are located or ordinarily resident in Russia, or an entity that is incorporated or constituted under the law of Russia, or domiciled in Russia.)

Accordingly, some UK companies may take a cautious approach (sometimes termed ‘de-risking’) and refuse to do business with you on the grounds that, for example:

a sanctioned person holds a minority interest in your company

you have links with sanctioned persons

they have any other concerns that they are unable to resolve to their satisfaction

they prefer to adopt a cautious approach on the basis of their internal policies

As a result, many UK Persons will decline to do business with you if you are unable to demonstrate that you have implemented effective measures to prevent any goods or services that you receive from them being sent to Russia or to a person connected with Russia. This may apply whether they are sent directly by you or indirectly by others in your supply chain. This could make it difficult for you to access, for example:

components used in your manufacturing processes

goods that you trade

investment

insurance

banking

financing

debt servicing

payments services

foreign exchange services

letters of credit

servicing and spare parts for machinery

If UK persons are unable to resolve concerns to their satisfaction, they may also choose to halt trading with your business altogether, including the import of your goods to the UK.

In addition, it is possible that some non-UK businesses will refuse to do business with you if you are unable to demonstrate that you have taken UK sanctions into account. This is particularly the case with financial institutions, such as banks, which may refuse to process transactions which are at risk of breaching or undermining UK sanctions.

It is also important to note that the national laws of Georgia may regulate some of the same activities that are prohibited by UK sanctions. They may restrict what can be exported or re-exported to Russia. Details on such laws in Georgia are set out in Section 5.

4. Overview of UK sanctions on Russia

Given the risks for Georgian businesses identified in the preceding section, this section explains the main features of UK sanctions. Understanding how UK sanctions operate is important for informing the steps you should undertake if you are seeking to manage the risks identified above. Practical guidance on such steps is set out in Section 6.

The UK government publishes statutory guidance on its Russia sanctions (https://www.gov.uk/government/publications/russia-sanctions-guidance/russia-sanctions-guidance). This guidance is not exhaustive. More detailed guidance is also published on certain issues, listed in section 7. You should also seek legal advice where you are uncertain of your obligations, or of the sanctions risks involved.

4.1. Legal basis

UK sanctions on Russia are set out in: The Russia (Sanctions) (EU Exit) Regulations 2019 (https://www.legislation.gov.uk/uksi/2019/855/contents) (the ‘Regulations’), as amended from time to time. The link takes you to the full text of the Regulations. If you want to look into a specific issue in the Regulations, for example to check whether goods you are dealing with are sanctioned, tips to help navigate this legal text are in section 7.1.

Two aspects of UK sanctions measures are relevant to businesses in Georgia:

asset freeze designations

trade in high priority goods

Details on each of these types of sanctions are set out below, followed by a summary of the other main types of UK sanctions.

4.2. Financial sanctions

4.2.1. Asset freeze designations

Asset freeze sanctions play a critical role in targeting individuals and entities that support Russia’s military in its invasion of Ukraine, cutting them off from access to funds and business. Individuals and entities subject to an asset freeze are known as ‘designated’ or ‘sanctioned’ persons.

As set out in section 3, if goods or services are to be supplied to Georgian persons by a UK company, the UK supplier will want to be assured that these will not be passed on to, or be for the benefit of, a UK-designated person. Without adequate assurances, the UK supplier – including any UK banks involved – is likely to decline the business.

4.2.2. How to check who is designated

All individuals and entities designated by the UK are included in the UK Sanctions List (https://www.gov.uk/government/publications/the-uk-sanctions-list). This is updated immediately whenever changes are made, which occurs frequently. Guidance on how to check whether an existing or prospective partner or customer of yours is designated can be found in section 6.3. The UK government also issues e-alerts to businesses to inform of changes to the UK Sanctions List. Details can be found in section 7.4.

4.2.3. Ownership and control

This section provides an explanation of the concept of ‘ownership and control’ since UK designations apply not only to persons that are designated in their own names but also to entities that they own or control. Ensuring compliance therefore requires additional due diligence than simply checking the UK Sanctions List. More detailed guidance can be found in section 6.3.

An asset freeze applies not only to those who are listed in the UK Sanctions List, but also to entities if:

a designated person holds, directly or indirectly, more than 50% of the shares or voting rights in the entity

a designated person has the right, directly or indirectly, to appoint or remove a majority of the board of directors of the entity or

it is reasonable to expect that a designated person would be able to ensure that the affairs of the entity are conducted in accordance with their wishes. Details of how this may be interpreted are set out in the UK financial sanctions general guidance (https://www.gov.uk/government/publications/financial-sanctions-general-guidance/uk-financial-sanctions-general-guidance)

Such entities may not be designated in their own right, so their names may not appear on the UK Sanctions List. But they must nonetheless be treated as subject to an asset freeze.

If 2 or more designated persons together hold more than 50% of the shares in an entity, but each one holds less than 50%, the entity is not generally considered to be owned by a designated person. However, if there is evidence of a joint arrangement between them or the shares are held jointly, then the entity would be considered to be owned by a designated person.

Before conducting a transaction, it is strongly recommended to check both:

whether any of the parties to the transaction are listed in the UK Sanctions List; and

whether they are owned or controlled by any person in the UK Sanctions List

This is particularly important for any transactions by Georgian businesses that involve UK parties, given that it is prohibited for a UK Person to:

deal with the funds or economic resources belonging to or owned, held or controlled by a designated person

make funds or economic resources available, directly or indirectly, to, or for the benefit of, a designated person

engage in actions that, directly or indirectly, circumvent the financial sanctions prohibitions

The funds and economic resources must be ‘frozen’ immediately by the UK Person in possession or control of them.

Funds or economic resources are considered to be owned by a designated person, and must therefore be treated as ‘frozen’, if:

a designated person owns any legal or equitable interest in them

they are owned jointly with a non-designated person

4.2.4. Exceptions and licences

The UK government issues a number of licences that permit certain activities that would otherwise be prohibited. There are 2 types of licence:

General licences: these authorise specified activities that would otherwise be prohibited, without the need to obtain a specific licence. The UK government publishes a list of the General Licences (https://www.gov.uk/government/collections/ofsi-general-licences) which is frequently updated as new licences are issued and existing licences expire. General licences include requirements for prior notification of use, record-keeping and reporting.

Specific licences: applications may be submitted by UK persons, or a company that employs UK persons, or by designated persons, or by their representative (e.g. a law firm acting on their behalf). Licences may only be issued if the circumstances meet one of the licensing grounds listed in Schedule 5 (https://www.legislation.gov.uk/uksi/2019/855/schedule/5) of the Regulations. These are limited and include, for example:

to meet the basic needs of a designated person

to settle a pre-existing judicial decision

to satisfy an obligation that arose before the person was designated

for humanitarian, medical or food-related activities

The Regulations provide for certain exceptions to asset freeze sanctions. These apply automatically in certain defined circumstances and do not require a UK Person to obtain a licence. Read more information about exceptions (https://www.gov.uk/government/publications/financial-sanctions-general-guidance/uk-financial-sanctions-general-guidance#exceptions-and-licensing). The circumstances in which these exceptions apply are very limited and you should seek legal advice before assuming they apply to you.

4.3. Trade sanctions

The UK has imposed extensive trade sanctions against Russia, covering the vast majority of goods and services. A key priority of UK trade sanctions is to prevent Russia from acquiring goods which contribute directly to its military. Goods which are of particular concern in this respect are published in the Common High Priority List (https://www.gov.uk/government/publications/russia-sanctions-common-high-priority-items-list/15bbaf12-a67d-40ec-94b4-a6d5499c892b) (CHPL), which has been jointly compiled by the UK, US, EU and Japan. While the CHPL is not an exhaustive list of sanctioned goods (see section 4.3.2), and all circumvention of UK sanctions is treated seriously, businesses based in Georgia should exercise caution when trading these CHPL goods if there is risk that Russia may be their ultimate destination.

As set out in section 3, if goods or services are to be supplied by a UK company, it will want to be assured that these will not be passed on to Russia or to a person connected with Russia if that would be in breach of UK sanctions. Without adequate assurances, a UK supplier – including any UK banks involved – is likely to decline the business.

4.3.1. Activities subject to UK sanctions

UK sanctions on certain goods and technology include prohibitions on the following range of transactions. These sanctions apply to goods and technology that are specifically listed in the Regulations. A practical guide to how to check whether a specific item is subject to UK sanctions is in Section 7.1. While only UK Persons and persons located in the UK are obliged by law to comply with these restrictions, Georgian businesses that participate in these transactions may expose themselves to the risks outlined in Section 3.3.

The below sets out, in high level summary, the activities that are restricted by UK trade sanctions. The precise terms of the restrictions will vary depending upon the specific goods or services you are dealing with. More information is in: Russia sanctions guidance (https://www.gov.uk/government/publications/russia-sanctions-guidance/russia-sanctions-guidance).

1. Exports:

exporting sanctioned goods directly from the UK to Russia

exporting sanctioned goods from the UK ‘for use in’ Russia; this includes, for example, if the goods are sent to a third country but are then sent on to Russia

2. Imports:

Importing sanctioned goods into the UK if they are consigned from Russia or they originated in Russia; this includes, for example, sanctioned goods that are not shipped directly from Russia to the UK but are sent via a third country

directly or indirectly acquiring sanctioned goods with the intention of the goods entering the UK, if they originate in Russia, or are located in Russia, or they are from a person connected with Russia

3. Supply and delivery:

supplying and delivering sanctioned goods, directly or indirectly:

from a third country to Russia

from Russia to a third country, or

between third countries

4. Making sanctioned goods available directly or indirectly:

for use in Russia

to a person connected with Russia

5. Transfer of sanctioned technology (which includes software):

to a place in Russia

to a person connected with Russia

from Russia to persons or places outside the UK

6. Technical assistance related to sanctioned goods:

directly or indirectly providing technical assistance in relation to sanctioned goods:

to a person connected with Russia

for use in Russia

to designated persons (in relation to aircraft and ships)

7. Financial services or funds related to sanctioned activities:
- directly or indirectly providing financial services or funds to a person connected with Russian in connection with sanctioned trading activities
8. Brokering services related to sanctioned activities:

directly or indirectly providing brokering services related to the supply or delivery of sanctioned goods:

from a third country to a place in Russia or

to a person connected with Russia

Similar restrictions apply to the regions of Ukraine that are not controlled by the Ukrainian government (Crimea, Donetsk, Luhansk, Kherson and Zaporizhzhia).

4.3.2. Goods subject to UK sanctions

The sanctions on exports (and related activities, as listed above) to Russia apply to a wide range of goods and, in some cases, technology including (with links to the relevant Regulations):

military, defence, security and dual-use goods and technology (Chapter 2 (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/2))

’critical industry’, oil refining, aviation, maritime and space goods and technology (Chapter 2 (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/2))

energy-related goods (Chapter 4) (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4)

luxury goods (the sanctions apply to listed goods above certain values, including cars valued at over £42,000) (Chapter 4B) (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4B)

a wide range of goods for which Russia is particularly reliant on supplies from the UK and its G7 partners, or which are of significant importance for the Russian economy (Chapter 4H (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4H) and Chapter 4M (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4M))

The sanctions on imports (and related activities, as listed above) from Russia similarly apply to a wide range of goods, products and, in some cases, technology including:

oil and oil products, liquefied natural gas, and coal and coal products (Chapter 4I (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4I), Chapter 4K (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4K) and Chapter 4L (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4L))

certain iron and steel products, including Russian iron and steel that has been processed in third countries (Chapter 4C (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4C) and Chapter 4CA (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4CA))

certain materials and manufactured goods generating revenue for Russia (Chapter 4G (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4G) and Chapter 4GA (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4GA))

gold and diamonds, including items processed in third countries (Chapter 4J (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4J), Chapter 4JA (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4JA), Chapter 4JB (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4JB) and Chapter 4JC (https://www.legislation.gov.uk/uksi/2019/855/part/5/chapter/4JC))

4.4.1. Services subject to UK sanctions

UK sanctions on services include bans on the provision of the following:

professional and business services (https://www.gov.uk/government/publications/professional-and-business-services-to-a-person-connected-with-russia/professional-and-business-services-to-a-person-connected-with-russia) including accounting, business and management consulting, public relations, advertising, architectural, auditing, engineering and IT consultancy and design services to persons connected with Russia. Sanctions also apply to the provision of legal advisory services to any person who is not a UK person in relation to any activity which would, if carried out by a UK person or in the UK, contravene UK sanctions on Russia

maritime transport, insurance and other financial services (https://www.gov.uk/government/publications/uk-maritime-services-ban-and-oil-price-cap-industry-guidance/uk-maritime-services-ban-and-oil-price-cap-industry-guidance) for ships carrying Russian crude oil/refined oil products to or between third countries. This applies unless the crude oil/refined oil products has been sold below a specific price cap

a ban on all Russia-owned or operated aircraft and ships (https://www.gov.uk/guidance/transport-sanctions) from UK airspace, landings, and ports

4.4.2. Exceptions and licences

As is the case for financial sanctions, the UK government issues a number of licences that permit certain trade activities that would otherwise be prohibited. There are 2 types of licence: general and specific licences.

General trade licences: these authorise specified activities that would otherwise be prohibited, without the need to obtain a specific licence. These include a licence for oil and oil products (PDF, 142 KB) (https://assets.publishing.service.gov.uk/media/665081f1adfc6a4843fe0538/OPC_GL_-_INT-2024-4423849_-_24_May_2024.pdf) that are below a ‘price cap’. General trade licences include requirements for prior notification of use, record-keeping and reporting.

Specific licences: applications (https://www.gov.uk/guidance/how-to-apply-for-a-trade-sanctions-licence) may be submitted by UK persons, or a company that employs UK persons, or by their representative (for example, a law firm acting on their behalf). Decisions on whether to grant a licence are considered on a case-by-case basis. Specific activities that the UK authorities consider to be consistent with the aims of the sanctions are set out in the table in section 3.4 of the Russia sanctions guidance.

The Regulations also provide for limited exceptions to trade sanctions, which apply automatically in certain defined circumstances and do not require UK Persons to obtain a licence. The exceptions include, in summary:

personal effects of a person travelling to Russia

consumer communication devices and software updates for civilian use

certain exceptions for aircraft and ships

certain exceptions relating to professional, business and legal advisory services

certain iron and steel imports

oil and oil products that transit through Russia

The circumstances in which these exceptions apply are very limited, and you are encouraged to seek legal advice before assuming they apply to you.

4.5. Other types of sanctions

In addition to the measures described above, the UK sanctions cover a range of other activities. These are not addressed here since they are less likely to be relevant to businesses operating in Georgia. Further information can be found in the UK statutory guide (https://www.gov.uk/government/publications/russia-sanctions-guidance/russia-sanctions-guidance).

5. Relevant national Georgian laws

Georgia does not implement UK sanctions or its own national sanctions. However, certain Georgian laws and measures regulate some of the same activities that are prohibited by UK sanctions. These are summarised below.

The UK government does not take responsibility for the accuracy of the content of this section. When operating under Georgian jurisdiction you should consult relevant official sources of information and should seek appropriate qualified legal advice.

The purpose of this section is to highlight additional barriers and risks that individuals and entities operating in Georgia may face if they participate in activity that may circumvent UK sanctions.

5.1. Measures applicable to the Georgian financial sector

Banks and other financial services firms in Georgia are required to comply with decrees issued by the National Bank of Georgia (https://nbg.gov.ge/en) (NBG). It has adopted a number of measures that may in practice restrict business related to Russia or persons connected with Russia. Such measures may also mean that Georgian banks and financial services firms refuse to handle certain transactions if they have concerns that they are not compliant with UK (or other) sanctions:

on 26 February 2022, the NBG instructed Georgian financial institutions to adhere to the requirements of UK (as well as US and EU) sanctions on Russia and Belarus

the ‘Rule on implementation of Sanctions Regimes by Obliged entities under the Supervision of the National Bank of Georgia’ issued on 4 August 2023 by the NBG in Order No. 208/04 (https://matsne.gov.ge/ka/document/view/5888234?publication=0) provides that Georgian persons may be subject to penalties only if there has been a final judgment of conviction in a domestic court issued regarding the basis of the sanction imposed upon them

Order 208/04 also requires entities subject to the NBG’s supervision to submit monthly reports to the NBG detailing remittances from Russia and Belarus. This requirement is intended to enable the National Bank to monitor compliance with foreign sanctions

‘The Rule on Screening SWIFT Messages’ issued by the NBG in Order 273/04 of 9 October 2023 (https://matsne.gov.ge/ka/document/view/5936431?publication=0) requires banks to conduct screening of SWIFT messages in order to identify any payments to individuals/entities subject to foreign sanctions. If such payments are identified, banks are required to block them

5.2. Measures by Georgian banks

In addition to the measures mandated by the NBG listed above, banks and other financial services firms in Georgia are required to comply with measures relating to anti-money laundering and currency control. In practice these may restrict business related to Russia or persons connected with Russia, including those sanctioned by the UK. Such measures may also mean that Georgian banks and financial services firms refuse to handle certain transactions if they have concerns that they are not compliant with UK (or other) sanctions. Such measures include:

under the Law of Georgia on Commercial Bank Activities (https://matsne.gov.ge/en/document/view/32962?publication=37), commercial banks have the right to refuse to open an account or to provide their services, without providing reasons

banks may decline specific transactions, including payments related to the export of any sensitive items (including CHPIs)

under the NBG Order 24/04 on Establishing Instructions for Bank Account Opening (https://matsne.gov.ge/ka/document/view/1279467?publication=21) dated 7 April 2011, commercial banks may close clients’ bank accounts under various circumstances

the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism (https://matsne.gov.ge/ka/document/view/4690334?publication=12) obliges commercial banks to implement internal controls to address risks related to money laundering and the financing of terrorism which could potentially be used to identify designated persons and activities sanctioned by the UK

5.3. Trade measures

No specific legal acts have been adopted for the purpose of the implementation of trade sanctions imposed by other countries. However, the Georgian Revenue Service (RS) has taken a number of steps relevant to Georgian businesses conducting trade with Russia:

the RS has issued a public statement (https://www.rs.ge/NewsArchive-en?newsId=657) that all products included in international sanctions imposed by the US, UK, EU and other countries on Russia and Belarus are subject to strict customs control in Georgia

the RS has provided on its website a List of Sanctioned Goods, Persons and Companies (https://rs.ge/Callcenterguides?Listofsanctionedgoods,personsandcompanies&guid=0641DC256C2915E9E0637A0214AC6D8B)

goods intended for entry into Russia are subject to additional checks under a stricter customs regime

5.4. Penalties and enforcement

Since existing Georgian law contains no sanctions regime, with the exception of the measures taken by the NBG set out in Section 5.1 there are no specific civil, administrative or criminal penalties for failure to observe sanctions imposed by other countries such as the UK. However, Georgian businesses that fail to observe the requirements set out above may be subject to a range of penalties:

the NBG has a wide array of measures at its disposal in response to non-compliance with its instructions to financial institutions, including in some instances monetary penalties

any person or company committing crimes related to money laundering can be subject to criminal proceedings. While non-compliance with ‘Know Your Client’ requirements to avoid the risk of sanctions is not explicitly covered under the relevant article of the Criminal Code (Article 194), the provision broadly defines punishable actions – such as the concealment or disguising of the true nature or origin of funds – which may in principle encompass failures to establish the identity of the client

under the Criminal Code of Georgia (https://matsne.gov.ge/ka/document/view/xx-xxxx-xxxx?publication=264), violations of the procedures related to the movement of goods across the customs border may be subject to criminal liability. This applies if they involve large quantities of movable property (more than 15,000 GEL) by circumventing customs control, including deceptive use of documents as well as the entry of false data. The range of penalties varies from a fine to imprisonment from 3 years up to 15 years (in more severe cases)

in addition, the Customs Code of Georgia (https://matsne.gov.ge/ka/document/view/4598501?publication=7) provides for various customs offences (for example, illegal export or import of goods, breach of conditions of customs procedures) which are subject to penalties such as a warning, fine, or confiscation of the goods. Penalties may be imposed in cases related to sanctions circumvention on the grounds of customs misdeclaration

the RS may also refuse the entry of goods into Georgia if the goods and/or the individuals and/or companies involved are included in the List of Sanctioned Goods, Persons and Companies if it is suspected that the goods are being imported for the purposes of circumventing sanctions on Russia

6. Practical steps to manage sanctions risks and promote compliance

There is no ‘one-size-fits-all’ approach to managing sanctions risks. In general, best practice is to conduct a risk assessment of the specific activities of your business and then to design and implement a company sanctions policy to manage the risks effectively. The following outlines simplified, practical steps to assist in this process. It is not guaranteed that following this guidance will ensure that you are compliant with the relevant legislation. Legal advice should be taken where you consider that you may be involved in activity that engages UK sanctions or any of the Georgian legislation identified in section 5.

6.1. Risk assessment

Drawing on the information in this guide and other sources of guidance (such as those listed in section 7), identify and assess the risks for your business of:

breaching national laws

conducting transactions that, while not a breach of national laws, may nonetheless have consequences for your ability to trade in the future

Risk profiles (also sometimes referred to as ‘red flags’) may include the following. This is an illustrative list and not intended to be exhaustive. It is drawn from various sources of guidance, including the UK’s countering Russian sanctions evasion guidance for exporters (https://www.gov.uk/government/publications/countering-russian-sanctions-evasion-and-circumvention/countering-russian-sanctions-evasion-guidance-for-exporters) and G7 updated industry guidance, preventing Russian export control and sanctions evasion (https://www.gov.uk/government/publications/preventing-russian-export-control-and-sanctions-evasion).

1. Your business partners and customers:

sanctions designations:

are they designated persons or are they owned or controlled by designated persons, or is this information unavailable (guidance on how to conduct these checks is in section 6.3)

did they have a change of ultimate beneficial ownership shortly before or after sanctions were imposed

do they have links with designated persons, such as joint ventures or cooperation agreements

are their address or contact details similar to those of a designated person.

connected with Russia:

are they individuals who are resident or located in Russia

are they companies that are established or domiciled in Russia

are they overseas branches or subsidiaries of Russian companies

do they do business with Russian companies, particularly those in the Russian defence sector

possible front companies:

are they reluctant to provide clear details about themselves; do they have no website or little information on it

do they use unnecessarily complex trading processes, for example using layered letters of credit, intermediaries, or brokers

does their address not appear consistent with their business or is it a residential address

do they share their premises or registered address with multiple businesses or holding companies dealing in comparable goods - this may be intended to conceal illicit trade in sanctioned goods

are they recently established, or reactivated or have they had recent changes in their ownership or control

do they have little or no prior history of purchasing the item in question

are communications routed via a representative while senior management staff are not available

do they decline routine installation, training, or maintenance services associated with the product

end-use of the goods:

is there any reason to suspect that they are engaged in sanctions evasion

is the intended end-use of the goods clear and rational, or are they reluctant to provide details about this

do their supporting documents, such as the invoice, contain inconsistent information or not list the actual end-user but instead name only an intermediary such as a mail centre, trading company or logistics company

2. Your goods and shipping:

are they imported, directly or indirectly, from the UK (or other countries that have imposed sanctions on Russia)

are they subject to any sanctions or export or import controls – check their commodity codes; in particular, are they on the list of CHPLs; does your UK supplier inform you if any items are sanctioned or CHPLs

do they contain components that are on the list of CHPLs and are liable to be extracted and diverted

is your proposed trade inconsistent with normal trade patterns, for example have the volumes or prices of the goods increased significantly since the imposition of sanctions

do the goods not fit the nature of the customer’s business, for example, an order of sophisticated computers for a small bakery

is there any reason to suspect that the goods’ country of origin or commodity code has been falsely declared

do they use an abnormal or circuitous routing of the goods

are invoice values divided into smaller amounts to remain under the value limits of sanctioned goods or export controls

3. Your payments:

do your customers use shell companies to conduct international wire transfers

do they use crypto currency for payment

do they use circuitous routing of financial flows, for example outside of SWIFT, via small overseas banks

are purchases made under a letter of credit that is consigned to the issuing bank, not to the actual end-user

are they not interested in guarantees, maintenance, service, spare parts

do transactions involve a last-minute change in payment routing through a different country or company

is the customer willing to pay significantly above the market rate for the goods

6.2. Establish a company policy

On the basis of the risk analysis of your business, establish a company policy on sanctions compliance. This does not need to be long or complex but should be proportionate to the risks and be effective in managing them. An illustrative example of 3 main components of a policy:

Signal senior commitment to compliance by the CEO, assign responsibilities for tasks, and provide training and raise awareness of staff.

Conduct due diligence on your current and prospective partners/customers, considering the questions listed in the Risk Assessment. Require them to clarify any issues that are not clear and, if the goods are subject to sanctions, to sign an End User Certification certifying that the goods will not be supplied to Russia and include provisions in your contract requiring their compliance. Further detail on these points is set out below.

Keep your policy updated. Be alert to changes in the national laws and sanctions and adapt your procedures as necessary. Conduct checks and audits to ensure the procedures are effective. Update your staff training regularly.

6.3. Check whether your partners/customers are subject to an asset freeze

For existing partners/customers: these should have been checked as part of the Risk Assessment process. The same checks should be repeated on a regular basis in case they are added to the sanctions list in the future.

For prospective new partners/customers, the same checks should be conducted. Screening of the names and details of existing and prospective partners/customers may be conducted manually or by using commercial software tools. A screening check involves:

Check the name: search for the name and, separately, the address, in OFSI’s UK Sanctions List (https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets) using ‘Control f’ or using a search tool (https://sanctionssearchapp.ofsi.hmtreasury.gov.uk/). If you find a match for the name, check the other details provided in the lists (such as aliases, dates of birth and addresses) to confirm whether the match is accurate. Note that an address which matches one in the sanctions lists may indicate the use of shell companies or trust and company service providers – this should be looked into further.

Check ownership: if a partner/customer is not named in any of the sanctions lists, you should also look into whether they are owned more than 50% by a designated person, as described in section 4.2.2. These details may be provided by the partners/customers themselves, but you should check these against public sources. You should proceed with great caution if reliable information on the identities of the owners and ultimate beneficial owners cannot be found or if there is any reason to suspect that they are owned by a designated person.

Check control: if a partner/customer is not designated in their own names nor owned by a designated person, you should also consider whether they are controlled by a designated person, as described in section 4.2.2. Again, it is advisable to treat partners/customers with great caution if there is any reason to suspect that they may be controlled by a designated person.

If a partner/customer is designated, or they are owned or controlled by a person that is designated, or there are serious grounds to suspect that they may be, it is strongly recommended that you do not conduct any form of business with them. Doing so may:

contravene national laws

lead your banks, suppliers and other partners to stop doing business with you

in serious cases, lead to you being designated yourself

6.4. Check for connections with Russia

Unlike a sanctions designation, the fact that a partner or customer has a connection with Russia does not mean that you should not conduct any form of business with them. But when considering doing business with a new partner or customer, you should be clear about their history and business practices, and particularly about the end use, end user and ultimate country of destination of the goods that you supply to them. You should:

include clauses in your contracts prohibiting the re-export of the goods to Russia and their resale to any third party that does not make the same commitment

conduct open-source research, including looking at public business registries and trade databases

consider the questions on end-use listed in the Risk Assessment in section 6.1, to confirm as far as possible that there is no reason to suspect that your goods will be re-exported to Russia; check for further documentary evidence that supports the customer’s statements

verify the identity and role of any third parties involved in transactions, including brokers, sub-contractors and freight forwarders

include clauses in your contracts permitting you not to fulfil the contract without liability if doing so would be either a breach of your national laws or that would cause you to breach your contracts with your UK and other suppliers

require a signed end-user certificate stating a credible, legitimate intended end-use of the goods concerned and certifying that the goods will not be supplied, sold, exported or transferred to Russia or to any person connected with Russia, nor to any other person that does make the same commitment (an example of an end-user certification is provided in section 7.2)

It is strongly recommended that you do not supply to any partner/customer any sanctioned goods, particularly CHPLs, if there is any reason to suspect that your goods may be sent on to Russia. If you do so, you expose yourself to a number of serious risks:

contravening national laws

leading your banks, suppliers and other partners to stop doing business with you

in serious cases, leading to you being designated yourself

6.5. Regular checks and updates

Sanctions and the national laws that implement them can change rapidly. Be alert to any changes and update your procedures as necessary. You can sign up for email alerts from the UK government (see section 7).

Those seeking to evade sanctions are highly resourceful. Circumvention routes and techniques are frequently adapted in an effort to evade detection. It is important to remain vigilant to any emerging signs that your business has been targeted for the purpose of circumvention.

Tracking your business’s trade flows and buyer patterns over a period of time may reveal significant shifts in exports of higher-risk products, indicating the possibility that these products are being procured for diversion to Russia.

Businesses should continuously evaluate their sanctions risk exposure as the circumvention landscape evolves, to ensure that compliance procedures and due diligence frameworks remain effective.

You should repeat the process of mapping business-specific vulnerabilities regularly, as business customers and trade flows change, new sanctions are adopted, and circumvention techniques adapt.

Even with established trading partners, due diligence should be repeated at intervals to ensure that the risk has not changed. For example, a change of directors, organisational status, or transactional patterns may indicate a more significant shift in a customer’s business operations.

Conduct spot checks and audits to ensure the procedures are effective. You should conduct post-transaction reviews to check whether any payments made had any Russian nexus or there is any other reason to be suspicious activities.

7. More information

7.1. Checking whether goods are sanctioned

First, you need the commodity code of the item concerned. (The first 6 digits are the same worldwide under the ‘Harmonised System’, which is why in some cases these are referred to as ‘HS codes’. Individual countries can then add up to another 4 digits for their own classification purposes; countries may apply slightly different codes to the same product). If you import items from the UK, the UK commodity code will be stated in the commercial invoice. If you do not know the code, you can look it up using the UK’s Trade Tariff tool (https://www.gov.uk/trade-tariff).

Check whether such items are included in the Schedules (annexes) of the UK Russia sanctions Regulations (https://www.legislation.gov.uk/uksi/2019/855/contents). There is not currently a search tool available for doing this, so the check needs to be conducted manually by searching the Regulations. The following explains how to do this:

Check that you are looking at the latest available version of the Regulations (in the left-hand menu) in the ‘Table of contents’ page.

Open ‘Print options’ in the menu at the top of the page and select ‘The whole instrument’ (either PDF or web page).

Use ‘Control f’ to search for the commodity code of your item, starting with the 4-digit code before progressing to the 6- and 8-digit codes. If the 4-digit code is listed, all goods under that heading are caught by the sanctions, and so on for 6- and 8-digit codes.

The commodity code may be listed in more than one place; check the number of the Schedule in which it appears and then the Regulations that apply to that Schedule; some prohibit exports (and related actions) to Russia while others prohibit imports (and related actions) from Russia.

Finally, if your item is not listed, look through Schedule 2A (https://www.legislation.gov.uk/uksi/2019/855/schedule/2A). This lists ‘Critical-industry goods and technology’ by their description rather than commodity code. Look through the headings and, where relevant, the detailed listings, to check if your item falls within any of the categories. These items are all prohibited for export (and related actions) to Russia.

7.2. End user certification and contractual clauses

The following provides an illustrative example of the undertakings that you could ask your customer to sign or to incorporate in your contract, to provide you with assurances that your transaction with them will not result in the circumvention of sanctions. You may find that your suppliers in the UK, the EU, US and elsewhere require you to provide similar certifications or clauses in your contracts.

Your customer could be asked to confirm:

They are not designated as subject to an asset freeze under the sanctions laws of the United Kingdom, the United States, the European Union or other applicable national sanctions laws nor are they owned 50% or more or controlled by any person or entity designated under such laws.

The goods will not be sold, supplied or otherwise provided, directly or indirectly, to any person or entity designated as subject to an asset freeze under the sanctions laws of the United Kingdom, the United States, the European Union or other applicable national sanctions laws or any entity owned 50% or more, or controlled by, any person or entity designated under such laws.

The goods will not be sold, supplied or otherwise provided directly or indirectly to, or for use in, Russia or in any other country or region that is subject to sanctions imposed by the United Kingdom, the United States or the European Union where that act would be in breach of the terms of such sanctions if conducted by a national of those countries or of a Member State of the European Union.

The goods will not be sold, supplied or otherwise provided directly or indirectly to a person that is ordinarily resident or located in, or to an entity that is incorporated or domiciled in, Russia or in any other country or region that is subject to sanctions imposed by the United Kingdom where that act would be in breach of the terms of such sanctions if conducted by a national of the United Kingdom.

The goods will not be exported, sold or otherwise supplied and delivered, directly or indirectly, to a third party unless that third party accepts the commitments listed in this declaration as binding for itself and on condition that the third party is known by us to be trustworthy and reliable in the observance of such commitments.

That any violation of a particular undertaking shall constitute a material breach of an essential element of a contractual Agreement, and you shall be entitled to seek appropriate remedies, including, but not limited to termination of the Agreement and a penalty.

That they shall immediately inform you of any problems in meeting the commitments listed in this declaration, including any relevant activities by third parties that could frustrate those commitments.

7.3. Screening tools

A range of additional sanctions-oriented screening tools is available to support businesses in conducting customer due diligence checks.

The tools suggested here are not UK government resources and are operated by external organisations. We cannot verify their veracity or completeness.

7.4. Useful links
- full text of the UK Russia sanctions regulations (https://www.legislation.gov.uk/uksi/2019/855/contents)
- guidance on UK sanctions on Russia (https://www.gov.uk/government/publications/russia-sanctions-guidance/russia-sanctions-guidance)
- list of Common High Priority Items (CHPLs) (https://www.gov.uk/government/publications/russia-sanctions-common-high-priority-items-list/15bbaf12-a67d-40ec-94b4-a6d5499c892b)
- Consolidated List of UK financial sanctions targets (designated persons) (https://www.gov.uk/government/publications/financial-sanctions-consolidated-list-of-targets/consolidated-list-of-targets)
- general guidance on UK financial sanctions (https://www.gov.uk/government/publications/financial-sanctions-general-guidance/uk-financial-sanctions-general-guidance)
- guidance on UK financial sanctions on Russia (https://www.gov.uk/government/publications/financial-sanctions-guidance-for-russia/financial-sanctions-guidance-for-russia)
- FAQs on UK financial sanctions (https://www.gov.uk/government/publications/uk-financial-sanctions-faqs/uk-financial-sanctions-faqs)
- FAQs on EU sanctions on Russia (https://finance.ec.europa.eu/publications/consolidated-version_en)
- FAQs on US sanctions (https://ofac.treasury.gov/faqs)
For further updates and details on designations, subscribe to FCDO’s e-alerts (https://public.govdelivery.com/accounts/UKORGESO/subscriber/new).