Questions and answers on sanctions risk and parallel imports

Russia has maintained a product-specific parallel-import mechanism since 2022 under Government Resolution No. 506 and implementing lists issued by the Ministry of Industry and Trade. Whether a particular genuine product may be imported without the right holder's consent depends on the list and rules in force on the date of import. Goods outside that mechanism require a separate intellectual-property analysis; Articles 1487 and 1252 of the Civil Code may be relevant, but the answer cannot be reduced to the list alone.

Parallel-import treatment does not resolve export controls in the country of origin, dual-use restrictions, sanctions or ownership restrictions affecting the parties, bank compliance, transit controls, end-use restrictions, or ordinary EAEU customs requirements for classification and value. Each layer has to be checked separately.

A product may fall within Russia's parallel-import mechanism and still be restricted for export by another jurisdiction. A counterparty may not appear on a primary sanctions list while a bank still declines the transaction because of ownership, correspondent-banking or internal risk rules. The chain has to work as a whole.

Product screening starts with the exact technical characteristics and customs classification, because many controls turn on specifications rather than trade names. Check the export-control rules of the country of origin or export, relevant EU, UK or US controls where they have a jurisdictional nexus, Russian restrictions and any applicable EAEU measures. The lists and thresholds must be checked as of the transaction date.

Screen all relevant parties: supplier, buyer, consignee, intermediaries, banks and end user, together with ownership and control. Use the current official sanctions lists for the jurisdictions that may apply. Ownership rules differ by regime; for OFAC, entities owned 50% or more in the aggregate by one or more blocked persons are themselves treated as blocked even if not separately listed.

Also screen the logistics and payment chain: transit countries and ports, carriers, all known banks and correspondents, payment currency, timing and recurring payment patterns. A compliant buyer and seller do not eliminate risks elsewhere in the chain.

Screening can combine official regulator sources with commercial databases such as World-Check, LSEG/Refinitiv or Dow Jones Risk & Compliance. Specialist legal review is appropriate where ownership, export controls, end use or cross-jurisdiction rules are not straightforward.

For a material transaction, keep a dated record of the screening sources, search results and conclusions. This helps show what the company checked at the relevant time and provides a baseline for later re-screening. It does not create automatic immunity under Article 2.1 of the Administrative Offences Code or any sanctions regime.

Sanctions jurisdiction is rule-specific. US controls may apply through US persons, US-origin items or technology, US financial infrastructure or provisions expressly reaching certain foreign conduct; EU and UK regimes have their own territorial and personal scope. Secondary-sanctions exposure is also measure-specific. Do not assume that any single US, EU or UK element automatically imports the whole sanctions regime into every transaction.

Third-country routing can still fail where the intermediary is owned or controlled by a restricted person, the route has no credible commercial function, a bank declines the transaction because of correspondent risk, or the end user is restricted. Substance, ownership and end use matter more than the number of borders crossed.

What can work is a lawful restructuring with genuine commercial substance: for example, a different supplier, manufacturer, payment bank or route where the resulting transaction independently complies with the applicable rules. Re-labelling the same restricted transaction through a nominal intermediary does not solve the legal issue.

Banks and regulators increasingly examine third-country routing, ownership and end use. Building a lawful structure before shipment is generally more manageable than trying to repair a transaction after a payment or cargo has been stopped.

Determine what triggered the stop—goods, counterparty, ownership, jurisdiction, route, intermediary bank or currency—who made the decision, and whether the institution can disclose the basis. Banks and carriers may be unable or unwilling to disclose all internal compliance reasoning, so work from the notice, document request and transaction facts.

Once the trigger is known, consider only lawful alternatives: a different compliant product configuration, supplier, distributor, route, bank, currency or payment instrument where the underlying transaction remains genuine and permitted. Adding an intermediary solely to disguise the original parties or destination is not a compliant restructuring.

Do not alter documents to disguise the transaction, split or reroute it merely to evade controls, or keep resubmitting the same risk through different institutions in the hope that one will overlook it. If the stated or suspected concern is wrong, address it with evidence and the relevant legal rule.

For material transactions, prepare fallback options before performance begins. A lawful alternative bank, route or supplier can reduce disruption if the primary structure later becomes unavailable.

Dual-use controls arise from national legislation informed in part by international export-control regimes. In Russia, the applicable control lists, licensing authority and procedure must be checked under the current export-control framework for the specific goods or technology. Do not rely on Government Resolution No. 1166 as a universal or current source for all controlled items.

Higher-risk categories can include advanced electronics, specialist materials, scientific and measuring equipment, cryptographic items and software, certain biological materials or equipment, optics, lasers and other technology with military or strategic applications. Classification depends on exact technical parameters and end use.

Potential exposure can include Russian criminal provisions such as Articles 189 or 226.1 of the Criminal Code and administrative provisions such as Article 16.3 of the Administrative Offences Code, depending on the goods, conduct, value, intent and applicable version. Sanctions or foreign export-control consequences may also arise. Penalties should be checked from the current text rather than hard-coded from a generic summary.

For potentially controlled goods, classify the item against the relevant control list before shipment. If controlled, determine which export or import licences, permissions or end-user documents are actually required in the jurisdictions involved. Keep a documented supply chain and end-use record.

The contract file should include the agreement and amendments, any sanctions or change-in-law clauses, a map of the relevant parties and intermediaries, ownership information needed for sanctions analysis, and end-user information where end use matters.

The product file should contain a precise technical specification, manufacturer literature, the customs classification and any export-control classification relevant to the exporting jurisdiction, together with supporting certificates and technical records.

The payment file should identify the payment method, currency and known participating banks, payment schedule and any lawful fallback arrangements agreed in advance. A backup payment route must be independently compliant; it is not a device for bypassing restrictions.

The logistics file should show the actual route, transit and transshipment points, carriers and relevant registration or flag information, insurance arrangements and any intermediate storage. This allows the route to be screened against current restrictions.

Where required, keep the applicable export or import licence, authorisation from the competent authority, end-user certificate and any regulator correspondence. The responsible authority and document depend on the item and transaction; FSTEC, the FSB, the Ministry of Industry and Trade or another body may be relevant in different cases.

Keep dated sanctions-screening records, the sources used, any legal assessment of difficult issues, the internal approval record and relevant compliance procedures. For recurring sensitive transactions, training and escalation records may also matter.

Pre-payment screening has a cost, but it is usually easier to control than a blocked transaction after goods have shipped. Avoid generic cost figures: the real economics depend on the transaction value, jurisdictions, screening depth and consequences of delay.

A sanctions clause may address representations about sanctions status, notice of changes, suspension or termination rights, allocation of losses, change-in-law mechanisms and cooperation where performance must be adapted. The clause should define which sanctions regimes count as 'applicable' rather than using an unlimited global reference.

Possible structures include change-in-law provisions, material-adverse-change mechanisms, narrowly drafted termination rights and cooperation clauses. Their effect depends on governing law and wording; labels such as 'escape clause' do not themselves create a right to terminate without liability.

Without a tailored clause, the parties may have to rely on the governing law's general rules on illegality, impossibility, force majeure, hardship or termination. Those rules may not produce the commercial allocation the parties expected, so the contract should address foreseeable sanctions scenarios expressly.

For example, if export restrictions later prevent delivery of specified equipment, a well-drafted clause can define whether performance is suspended, alternatives must be explored, prepayments are returned and termination is available. Without that framework, the parties may have to resolve those issues through negotiation or dispute proceedings. The outcome and duration cannot be guaranteed.

For many international contracts involving sanctions exposure, a tailored sanctions and change-in-law provision is prudent. It is particularly important for long-term projects, staged payments and complex supply chains.

Primary sources include OFAC and BIS for US measures, EU regulations and Council decisions, OFSI and other UK authorities, UN Security Council measures, and the competent authorities of other relevant jurisdictions. Russian countermeasures and restrictions may arise from presidential decrees, government resolutions and agency acts. Always use the current official source for the measure in question.

There is no reliable fixed cadence for sanctions changes. New designations, regulations, licences, FAQs and guidance can appear at irregular intervals, including between contract signature and performance.

Monitoring tools include official regulator alerts, commercial screening databases and specialist legal updates. Internally, define how often critical counterparties and goods are re-screened based on transaction duration and risk rather than relying on a universal weekly or monthly schedule.

When a relevant rule changes, assess its effective date and scope, re-screen current transactions, pause steps that may create unlawful exposure where necessary, use the contract's change mechanisms, and update internal screening and approval procedures.

The monitoring model should match the business. A small importer with occasional transactions may use periodic external review; a business with material recurring trade may need a written sanctions-compliance process; a large international group may require dedicated compliance staff and automated monitoring.

A transaction structure that worked previously can become unavailable after a regulatory change. Re-screening before critical payment, shipment or delivery milestones is often more useful than discovering the change after a bank or carrier stops the transaction.