The risks of transferring dual-use goods to Russia lay a heavy compliance burden on the exporter. With the ever-changing sanctions and control lists to monitor, even a slight oversight can cause a critical export control violation, with associated consequences.
Many businesses have paid the cost of non-compliance, from legal penalties to restricted market access to loss of export privileges. And the last thing you want for your business is risking non-compliance when importing into Russia.
At Blackthorne IT, this blog explores dual-use controls and the consequences of export control violations when exporting to Russia.
Understanding Dual-Use Control Violation
Dual-use items (including software and technology) are products that can be used for military and commercial applications.
Russia’s continued invasion of Ukraine has significantly contributed to global supply chain disruption, increasing global commodity prices, and trade conflicts.
Exporting dual-use equipment into Russia could contribute to the development of military weapons or surveillance systems, escalating the war effects.
Such a situation increases the risks of non-compliance, requiring exporters to strictly adhere to export regulations governing the transfer of dual-use goods to Russia.
Hence, many countries have imposed strict controls on goods destined for Russia to limit access to critical technology that can be repurposed for military use, such as drone manufacturing.
Dual-use control violation occurs when exporters fail to fulfill the national and international export control regulations, falling victim to non-compliance. And hence, facing legal consequences for the violation.
7 Consequences of Dual-Use Export Control Violation
Any form of non-compliance, planned or not, is considered a violation of trade regulations and has accompanying consequences.
Breaking export control regulations when exporting dual-use goods to Russia can result in the following:
1. Financial Penalties
Dual-use violations can result in civil penalties of up to $12,000 or criminal penalties of up to $1 million per violation.
For instance, Boeing was charged a $51 million penalty for violating the Arms Control Act and the International Traffic in Arms Regulations (ITAR), based on technical data downloaded in China and Russia, risking national security.
2. Legal and Criminal Liability
Individuals and companies can face criminal penalties of up to 20 years imprisonment, asset freezes, or severe financial penalties.Example: Gabriel Temin, the CEO of two Finnish companies, received a suspended nine-month prison sentence for illegally exporting defence equipment to Kazakhstan via Russia, and breaching the EU’s sanctions against Russia.
3. Market Access Restrictions
Companies involved in export control violations may be exempted from accessing specific markets through additional export licensing requirements or a ban from trading with certain entities.
4. Export Privileges Denial
Export authorities may issue an order denying a company or individual the right to export, re-export, or transfer dual-use goods for violating dual-use goods regulations. For instance, in February 2025, the US BIS issued a temporary denial order (TDO) against several individuals and companies for facilitating illegal transshipment of US-origin goods to Russia.
5. Reputational Damage
Export control breaches can lead to adverse media coverage, ruining a company’s ability to attract new customers or trade with existing ones.
6. Increased Government Scrutiny
The company under investigation for non-compliance may face extended audits and inspections from governments in the origin and destination countries.
7. Civil Lawsuits and Contract Termination
Non-compliance can result in delays or cargo seizures, causing trade partners to terminate contracts or pursue legal claims for damages.
How Controls Impact Dual-Use Compliance
Dual-use item controls have created significant legal, operational, and strategic challenges for exporters, including:
Increased Export Licensing Requirements
Exporters must now obtain licences that were not initially required, with extended approval timeframes.
Even goods not listed as controlled can be subject to catch-all regulations if suspected of military end-use or end-user involvement.
Advanced Compliance Obligations
Exporting dual-use goods demands knowledge of current sanction regimes, export licensing requirements, country-specific embargoes, and export control classification numbers.
Screening of the buyer, intermediaries, freight forwarders, and logistics providers is also essential to avoid risking non-compliance.
Multi-Level Inspections and Investigations
Companies suspected of facilitating transshipment to reach Russian importers are subjected to compliance audits and inspections.
Once proven guilty, penalty impositions are inevitable, even when the violation is seemingly unintentional.
3 Ways to Ensure Dual-Use Compliance
Transferring dual-use goods to Russia requires a high level of vetting, from the parties involved to the associated non-compliance risks.
Here are the three main ways to mitigate risks when exporting to Russia:
1. Conducting Sufficient Due Diligence
Due diligence is the basis of any high-risk dual-use transaction, such as exporting to Russia.
You can refer to the best practices discussed under the seven risks of transferring dual-use goods to Russia for the actions you can take to ensure due diligence, including:
- Staying updated on applicable controls
- Thorough end-use and end-user screening
- Accurate HS classification
- Documentation verification
- Effective internal controls
- Tracking capabilities for supply chain visibility
2. Consulting Officially Designated Regulatory Agencies
Liaising with the export control authorities in your country of origin and Russia can help you understand applicable dual-use control and licensing requirements for your shipment.
Such authorities include BIS and EAR in the US, and the Export Control Joint Unit (ECJU) in the UK.Decision tools such as Strategic Trade Authorization (STA) and CCL by BIS and the OGEl and Goods Checker by ECJU can also help in classifying goods accurately and determining dual-use licensing requirements.
3. Collaborating with International Trade Compliance Professionals
We get it. You may lack the time and expertise in international trade to conduct due diligence or engage export licensing authorities. Additionally, you may not have the various record-keeping, scanning, and tracking tools for supply chain visibility.
And that’s where trade compliance professionals like Blackthorne come in.
With expertise in dual-use regulatory compliance, they can handle all your export compliance requirements, ensuring a timely, safe, and cost-efficient transaction.
Ensure Dual-Use Export Control Compliance with Blackthorne
You don’t have to risk export control violations when transferring dual-use goods to Russia.
With a dedicated export licensing consultancy team, we conduct due diligence on your behalf and take on legal responsibilities for every dual-use transaction. These responsibilities include:
- Identifying applicable technical regulations, customs requirements, sanctions, and tariffs for controlled goods
- Fulfilling all export requirements, including acquiring relevant export licences and performing conformity assessments for your goods
- Representing you during customs clearance to address any issues and facilitate a timely delivery
- Managing the transportation of your goods with a door-to-door delivery to avoid transshipment and export diversion
- Ensuring post-import compliance with record keeping, licensing management, regular audits, and compliance with regulatory updates
Email us at sales@blackthorneit.com or call us today to start importing dual-use goods compliantly at lower costs.
