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Enhancing Compliance and Building Safe Foundations for Export Lead Growth
Combining technology and vigilance can help businesses stay ahead of compliance challenges.
The UK Government yesterday issued guidance to assist exporters in identifying and mitigating risks associated with Russian sanctions evasion. This updated guidance aims to prevent the circumvention of trade restrictions imposed following Russia's actions in Ukraine. Whilst the guidance is specific to trade sanctions targeting Russia, much of the advice can be translated to other countries where the UK government has imposed trade sanctions, including Belarus, Iran, and North Korea.
As the latest Government Guidance notes:
“Russia has demonstrated that it relies on deceptive tactics, such as the use of indirect shipping routes, deliberate falsification of the end-uses of traded goods, and professional evasion networks, to evade established export controls and sanctions enforcement. These methods are still developing at pace, at times without the awareness of partner countries. It is therefore critical that all parties in the supply chain are aware of the diversion risks posed by Russia’s procurement efforts.” UK Govt, 2025
To navigate the complexities of sanctions compliance, businesses must focus on proactive strategies and risk management. Here are the essential insights to help mitigate risks and ensure compliance.
Key Areas of Focus for Strengthening Compliance
1. Understanding sanctions risk and exposure
Since February 2022, the UK has implemented extensive sanctions and export controls to restrict Russia's access to critical goods and technologies. The guidance emphasizes the importance of exporters being vigilant against the ever-evolving attempts to bypass these measures, noting the need to “adopt appropriate measures to mitigate the risk of unwittingly facilitating Russia’s access to sanctioned goods and technologies”.
2. Recognizing circumvention red flags
The guidance outlines specific indicators that may suggest attempts to evade sanctions, such as purchasing goods through 3rd country entities, the presence of front/shell companies and intermediaries within the network of the trade/transactions, the customer is physically located in, adjacent to, or otherwise maintains connections with countries where Russia operates procurement networks, the company address provided is a residential address and many others.
These indicators can be broadly grouped along the lines of inconsistencies concerning the product, customer, transaction, and export destination. Exporters are advised to be alert to these red flags in their operations and have strong and risk-based controls in place.
3. Enhanced due diligence practices
To help mitigate risks, the guidance recommends that exporters conduct thorough and regular enhanced due diligence on their customers and business partners. This includes not just verifying end-users, including beneficial ownership structure, background, but the identity and role of any third parties involved in the transaction, including brokers, sub-contractors, and freight forwarders.
Leveraging decision intelligence for compliance and growth
Decision intelligence offers advanced solutions that empower businesses to tackle sanctions compliance challenges while driving growth. By leveraging cutting-edge technologies such as entity resolution and graph analytics, decision intelligence platforms deliver transformative results:
Holistic sanctions risk management - Industries should adopt a holistic approach to sanctions compliance, leveraging advanced technologies such as entity resolution and graph analytics. These technologies enable the better identification of complex networks of relationships and transactions that may otherwise go undetected, particularly where customers or counterparties have connections of concern, such as hidden ties to sanctioned legal entities or addresses.
Ongoing & enhanced due diligence – Businesses should implement enhanced know your customer (KYC) data collection processes to verify the customer’s identity, beneficial ownership structure, background, and range of business operations, they should enhance their due diligence processes by focusing on incomplete or ambiguous data that may signal evasion attempts. Quantexa’s entity resolution capabilities, for example, can help aggregate and analyze customer and counterparty data, ensuring that even minor discrepancies are flagged for further investigation.
Graph analytics to uncover suspicious networks - Using Quantexa’s graph technology, banks and governments can better view the full supply chain and track and analyze relationships between legal entities and individuals, helping identify suspicious patterns that may suggest sanction evasion efforts. For instance, this technology is effective in detecting when entities are working through shell or front companies, higher risk intermediaries or obscure routes to facilitate illegal transactions.
Monitoring third-party risks - Given that Russia may be using third-party countries to circumvent sanctions, both governments and banks should increase scrutiny of third-party relationships. By mapping out entire networks of counterparties and clients, Quantexa’s technology helps prevent indirect involvement in sanction breaches.
What does this mean for your business?
Failing to address sanctions evasion risks can result in significant penalties, reputational damage, and disruptions to business operations. The ability to recognize circumvention red flags, supported by robust monitoring technologies, is critical in today’s dynamic regulatory environment. By leveraging solutions like Quantexa’s and following enhanced due diligence practices, exporters can confidently navigate complex compliance landscapes while supporting global efforts to enforce sanctions.
Quantexa’s solutions offer the form of holistic risk management necessary to help stay compliant and avoid reputational and financial risks in these evolving sanctions landscape.
To find out more, including results from work with global Tier 1 institutions actively addressing these issues, explore our resources on the topic.
