Russia sanctions: circum­vention via third countries

Since 2022, the direct supply of many goods to Russia has been prohibited. The demand has remained and is today met to a large extent via third countries, above all Türkiye, Central Asia, the Caucasus, the United Arab Emirates and China. For exporters this means that a customer outside Russia is no carte blanche. We have described the general screening obligations under sanctions in a separate article on sanctions and screening obligations. This article is about circumvention.

The prohibition of circum­vention

The legal basis of the goods-related Russia sanctions is Regulation (EU) No 833/2014. Its Article 12 prohibits participating, knowingly and intentionally, in activities the object or effect of which is to circumvent the prohibitions of the Regulation. Intent does not mean that you must positively know that the goods will arrive in Russia. According to the case law of the Court of Justice of the European Union, it is sufficient if you consider circumvention possible and accept it (judgment of 21 December 2011, Case C-72/11, Afrasiabi). Anyone who sees red flags and still delivers without asking questions is moving precisely within this area.

In addition, since the 11th sanctions package the EU can restrict the export of certain goods to individual third countries through which circumvention takes place systematically. With the 20th package of 23 April 2026, this instrument was applied for the first time, namely to Kyrgyzstan. The goods affected include CNC machining centres and network equipment.

Particularly critical goods

The focus is on the so-called Common High Priority Items, a list drawn up by the EU together with the United States, the United Kingdom and Japan of goods found in Russian weapon systems. These include above all electronic components, semiconductors, radio modules, navigation devices, bearings and machine tools. The list is arranged by commodity code, is continuously extended and, since the 14th sanctions package, has been included in the Regulation itself as Annex XL. The special obligations described in the following sections are linked to this Annex.

Red flags

Typical red flags, as also described by the European Commission in its guidance, are:

• New customer: The company was only founded after February 2022, has no internet presence or has the same address as numerous other companies.
• Atypical demand: A trading house without any recognisable production orders industrial components, spare parts for machines that hardly exist in the country, or quantities that do not match its size.
• Delivery route: The goods are to go to a freight forwarder, a customs warehouse or a free zone, or the onward transport remains open.
• Payment: Payments come from third parties, from countries other than the customer's or via unusual banks.
• Conduct: The customer waives installation, warranty or training, presses for speed or evades questions about end use and final destination.
• Russian connection: Managing directors, shareholders, contact persons or documents point to Russia or Belarus.

A red flag is not a prohibition on delivery. It does, however, require you to investigate. If the suspicion cannot be dispelled, you must decline the transaction.

No-Russia clause and subsidiaries

Under Article 12g of the Regulation, exporters selling certain goods to third countries must contractually prohibit re-export to Russia or for use in Russia. This concerns, among others, the goods in Annex XL, aviation goods and firearms. The contract must also provide for adequate remedies in the event of a breach, and any breach that becomes known must be reported to the authority. Partner countries whose export controls correspond to the EU sanctions are exempt. Article 12ga requires a corresponding clause where intellectual property rights, trade secrets or technical information relating to these goods are transferred.

Since the 14th package, Article 8a has required undertakings in the EU to undertake their best efforts to ensure that their subsidiaries in third countries do not undermine the sanctions. Article 12gb goes further. Anyone selling Annex XL goods to third countries must identify, assess, document and manage the risk of circumvention through appropriate internal controls. For subsidiaries in third countries, the parent company must ensure that the same requirements are applied there. This is an obligation of result and therefore stricter than the best-efforts obligation of Article 8a.

Criminal liability

Intentional violations of the Russia sanctions are criminal offences under section 18(1) of the Foreign Trade and Payments Act (Außenwirtschaftsgesetz, AWG); negligent violations are administrative offences under section 19(1). With Directive (EU) 2024/1226, the EU laid down minimum standards for sanctions criminal law. Germany transposed it by the Act of 3 February 2026, which entered into force on 6 February 2026.

Three provisions directly affect transactions via third countries:

• Section 18(6a) AWG: A particularly serious case, punishable by imprisonment of six months to ten years, generally exists if the offender provides a public authority with incorrect or incomplete information on end use, transport route, consignee, consignor, origin, buyer, seller, quantity, value or nature, or uses a third-country company under their control to conceal the violation. This is the typical circumvention structure.
• Section 18(8a) AWG: Reckless conduct (Leichtfertigkeit) is punishable by imprisonment of up to three years or a fine if a goods-related prohibition or licensing requirement under a sanctions act is concerned and the offence relates to dual-use items listed in Annex I or IV of Regulation (EU) 2021/821.
• Section 19(7) and (8) AWG: The corporate fine amounts to up to EUR 40 million for intentional offences under section 18(1) and for a breach of supervisory duty in connection with them.

Under section 18(10) AWG, these provisions also apply to offences committed abroad by Germans, regardless of the law of the place where the offence was committed.

The legislature has not created a separate general offence of circumvention. Section 18(1) no. 3 AWG covers only circumvention of the freezing and making-available obligations, and thus concerns funds and economic resources. Goods-related circumvention is covered by the general offences and the particularly serious case.

You cannot rely on a decision not to prosecute under section 22(4) AWG for sanctions violations. That provision applies only to negligent administrative offences under section 19(2) to (5).

The sanctions change continuously. The current one is the 21st sanctions package, adopted by the Council on 23 July 2026 (Regulation (EU) 2026/1848). It adds 51 further companies to Annex IV, including in Türkiye, Kyrgyzstan, Kazakhstan, India, the United Arab Emirates, China and Hong Kong. For companies in Annex IV, tightened restrictions apply to dual-use items and advanced technology.

How to proceed

1. Know your risk goods. Compare your product range with Annex XL and the other annexes of the Regulation.
2. Identify risk customers. Analyse your exports to the regions mentioned since 2022, that is, new customers, rising quantities and new goods.
3. Ask and document. Obtain end-use statements, check their plausibility and record why you are delivering.
4. Adapt contracts. Include the no-Russia clause with remedies in all affected contracts and general terms and conditions.
5. Involve subsidiaries. Lay down in binding form which checks also apply abroad, and monitor compliance with them.
6. Take suspicion seriously. If in doubt, put the delivery on hold and have the facts assessed before you make any statements to authorities. Incorrect or incomplete information constitutes the particularly serious case under section 18(6a) AWG.

How you build these steps into your existing export control depends on your product range and customer structure. Advice in the individual case is usually useful here.