UK Government introduces new trade sanctions end-use controls

On 22 April 2026, the UK Government, under the Sanctions (EU Exit) (Miscellaneous Amendments) Regulations 2026 (the “Regulations”), imposed new trade Sanctions End-Use Controls ("SEUC"). This is a new mechanism enabling the UK Government to impose targeted licensing requirements on UK exporters to tackle the circumvention of trade sanctions and to complement existing circumvention provisions under available trade sanctions regimes and the Sanctions and Anti-Money Laundering Act 2018. The UK Government has also published its guidance on the operation of SEUC (the “Guidance”).

The Regulations and the SEUC will come into force on 12 May 2026.

What are SEUC?

SEUC constitute a new licensing requirement for exports to non-sanctioned third countries, where the exporter (or freight-forwarder) has been informed by the UK Government that there is a risk of diversion of the goods or related technology to sanctioned destinations or persons. Importantly, SEUC only apply to goods and related technologies that are not otherwise subject to strategic controls — that is, items not included on the UK's strategic control lists for military and dual-use items. SEUC will apply to the following sanctions regimes: Russia and non-government-controlled territories of Ukraine, Belarus, Iran, North Korea, Libya, Myanmar, Somalia, Syria, Venezuela and Zimbabwe.

How do the controls work in practice?

As of 12 May 2026, it will be prohibited for a UK person to export or transfer goods or related technology once they have been informed that such goods or technology “are or may be intended, in their entirety or in part, for export, transfer or use in [sanctioned jurisdictions], or to a person connected with [sanctioned jurisdictions]”.

Once a specific sanctions diversion risk has been identified, the Department for Business and Trade ("DBT"), which may act through HMRC's National Clearance Hub (which works closely with Border Force) or through the Office of Trade Sanctions Implementation ("OTSI"), will issue a written "informing notice" to the exporter or freight forwarder. The informing notice will identify the shipment or transaction in scope and specify that an export licence is required. The case studies in the Guidance suggest that diversion risks are, in practice, most likely to be identified at the border. If the goods have already been intercepted at the border, HMRC may detain them while a licensing decision is made or allow them to be returned to the exporter pending the outcome of a licence application.

When applying for a licence, exporters are encouraged to submit detailed, complete and accurate licence applications as early as possible after receiving an informing letter to minimise potential delays, detailing in particular any information the exporter obtained on the intended end-use of the products.

OTSI is not currently accepting proactive licence applications from exporters who independently identify potential diversion risks, although the Guidance indicates that this position is kept under review. It is therefore possible that a mechanism for proactive and voluntary licence applications under SEUC may be introduced in the future.

Due diligence and record keeping

The Guidance confirms that SEUC do not change existing record keeping or due diligence expectations for exporters. Businesses are expected to conduct adequate due diligence to demonstrate compliance with UK sanctions. If informed, an exporter may be asked to supply details of its due diligence, and a licence will only be granted if the exporter can satisfactorily demonstrate that its goods or related technology are not ultimately destined for a sanctioned jurisdiction.

Penalties for non-compliance

Once informed about a diversion risk, proceeding with the export of goods or transfer of related technologies would constitute a sanctions violation. The Guidance sets out a range of possible consequences, including:

• detention or seizure of goods by HMRC at the border;
• revocation or refusal of existing and future export licences;
• being publicly named under OTSI's enforcement powers;
• imposition of a monetary penalty by OTSI; and
• criminal investigation and potential prosecution.

The Guidance clarifies that, like for all other sanctions violations, monetary penalties may be imposed on a strict liability basis. The underscores the importance of responding promptly to any information notice and seeking legal advice where appropriate.

Commentary

The introduction of SEUC reflects the UK Government’s increased focus on preventing sanctions circumvention at source and strengthening pre‑export intervention, rather than relying solely on post‑breach enforcement.

The key takeaway is that SEUC do not impose a blanket licensing requirement — exporters will only need a licence where they have received a specific informing notice, and those who have not been informed will continue to be able to export as usual. That said, the Guidance highlights expectations around exporter due diligence, internal escalation and responsiveness to Government engagement. As such, businesses exporting to higher-risk jurisdictions (e.g. countries which have already been identified as potential circumvention hubs by under Countering Russian sanctions evasion - guidance for businesses) should ensure their due diligence and compliance frameworks are robust, given that the UK Government may draw on publicly available sanctions evasion typologies and trade data to identify exports at risk of sanctions circumvention; exporters are therefore encouraged to do the same.

We note that end‑use and end‑user controls already exist under a parallel export control regime, where exporters are required to obtain licences when they are informed by the Government of an end-use/end-user concern. SEUC can be seen, in effect, as extending a similar risk‑based approach into the trade sanctions context, under OTSI’s expanding licensing remit, by capturing situations where restrictions do not technically apply to the goods, but there is nonetheless an identified risk that the export may be circumventing sanctions for use in a sanctioned destination.

Under the existing export control regime, to assist in managing the risk of having goods stopped at the border and being served with an information notice (which may severely impact delivery times and supply chain certainty), the Export Control Joint Unit (“ECJU”) offers an informal, non‑binding advisory service through which exporters may seek early guidance on potential end‑use or end‑user concerns. This is a useful tool to assess whether a proposed export may be problematic from an end-use/user perspective – a ‘No Concerns’ letter from the ECJU means that the risk of being informed of a potential issue at the border is very low. Unfortunately, there is currently no equivalent service in relation to SEUC, with exporters not being able to seek guidance from the authorities on the likelihood of being served with an information notice for a proposed transaction. Unless a similar advisory process is introduced, a degree of uncertainty for businesses will remain, especially for those supplying goods or related technology to jurisdictions identified as likely circumvention hubs.