Compliance Challenges Raised by Russia’s Evasion of New U.S. Trade Restrictions on Luxury Goods, Industrial Products and Controlled Items
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- Following Russia’s invasion of Ukraine, many companies withdrew their products from Russia, and in response, the Russian government has authorized a wide range of consumer, industrial and technology products for “parallel import,” permitting Russian businesses to import products that are not licensed for sale or distribution in Russia without obtaining permission from the rights holder.
- In light of recent changes in U.S. export controls against Russia, such parallel imports may raise meaningful compliance considerations for both U.S. and non-U.S. companies—companies selling covered luxury goods and industrial products, as well as a wide range of technology companies, may find themselves subject to new and broad export-control requirements at a time when their downstream distributors and resellers may have strong incentives to violate those requirements.
- If a company has information indicating a high probability that a distributor or customer is circumventing U.S. export controls, failure to act on that information could raise compliance implications for the supplier.