Lucy Mellows

Residency-based retail trade sanctions: “reasonable cause to suspect” and compliance risks under the 2019 Regulations

This article analyses the operational challenges introduced by residency-triggered trade controls under Regulation 46B of the United Kingdom’s Russia (Sanctions) (EU Exit) Regulations 2019. Unlike list-based financial sanctions, the prohibition on making luxury goods available to persons connected with Russia can apply to unlisted individuals by reason of ordinary residence in Russia or location in Russia. Screening against the United Kingdom Sanctions List does not itself establish whether an unlisted customer is connected with Russia. Businesses, therefore, require contextual verification procedures while distinguishing the criminal defence based on lack of knowledge and reasonable cause to suspect from the applicable civil monetary penalty framework. This article examines the compliance tension between trade-sanctions compliance and anti-discrimination risk under the Equality Act 2010, concluding with technical recommendations for risk-based reform.