G7 Updated Guidance on Preventing Russian Export Control and Sanctions Evasion:

Since 24 February 2022, Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the European Union (collectively referred to as the “Group of 7” or “G7”) have implemented unprecedented export controls and sanctions that restrict Russia’s access to technologies and other materials required to sustain its military operations and illegal war campaign in Ukraine.

The G7 has also coordinated these regulations with the Global Export Control Coalition (GECC). This 39-member coalition has implemented substantially similar controls in response to Russia’s unprovoked and unjustified invasion of Ukraine.

The work of the G7 has impacted Russia’s ability to access goods and technologies used for weapons development. The coordinated application of export controls and sanctions has limited Russia’s access to key markets it relied on to access and purchase technologies. The actions of the G7 have also degraded Russia’s economy and Moscow’s ability to generate revenue that could be used to purchase Western technologies.

• In February 2023, the G7 announced the creation of a new Enforcement Coordination Mechanism (ECM) to bolster compliance and enforcement of multilateral export controls and sanctions and to deny Russia the benefits of G7 economies.
• In September 2023, the ECM established a Sub-Working Group on Export Control Enforcement, through which G7 representatives would exchange information and operational results, discuss trends in research and analysis, and share best practices.

As part of the G7 coordinated efforts, a core principle of the G7 Sub-Working Group on Export Control Enforcement is to provide industry with guidance on preventing the diversion of controlled items to Russia, including through third countries.

THE collective aim is to assist the industry in identifying Russian evasion practices and complying with GECC controls, thereby protecting their technology from misappropriation, preventing reputational harm, and mitigating liability risk while supporting the continued success of the G7 export controls and sanctions.

This guidance document contains:

1. A list of items which pose a heightened risk of being diverted to Russia,
2. Updated red flag indicators of potential export control and/or sanctions evasion,
3. Best practices for industry to address these red flags, and
4. Screening tools and resources to assist with due diligence.

EXTRACTS FOLLOW…

1. The Common High Priority List (CHPL) The European Union, Japan, the United Kingdom, and the United States developed the CHPL to highlight for industry that these items pose a heightened risk of illicit diversion to Russia because of their importance to Russia’s war efforts. These items have been retrieved from Russian weapons found on the battlefield or have been identified as essential items for Russia to manufacture its military equipment. The CHPL shall aid the industry in conducting necessary due diligence.
2. As of this document’s publication, the CHPL includes 50 tariff lines Russia seeks to procure for its war effort. The 50 tariff lines are identified by six-digit Harmonized System (HS) Codes, a standardised numerical method of classifying goods known to every exporter, shipper, and freight forwarder worldwide.
3. The CHPL may be found here.  https://finance.ec.europa.eu/publications/list-common-high-priority-items_en

SOURCE

https://www.bis.gov/media/documents/g7-updated-guidance-industry-preventing-russian-export-control-and-sanctions