Global Trade Today leads the Day in Trade with a reminder that compliance with sanctions and export controls isn’t just about avoiding fines. It’s also about supporting the UK’s foreign policy and national security objectives, particularly as the war Ukraine-Russia war continues.
Europe’s reliance on US tech is also a matter of concern for EU member states, according to a recent survey by Politico, while the Chartered Institute of Export & International Trade was cited by the shadow business and trade secretary in a debate on the UK-India trade deal in Parliament yesterday (9 February).
Not just a compliance issue when it comes to Ukraine, says expert
A leading export controls expert has reminded businesses that they need to be vigilant with their end-user due diligence and consider going “further than just compliance” when it comes to efforts to avoid inadvertently sending controlled goods to Russia.
Daniela Turiccki, export controls advisory lead at the Chartered Institute of Export & International Trade, was speaking to Global Trade Today in response to a report in the Guardian that a UK company’s exports to Armenia could be inadvertently used in Russia’s war in Ukraine.
British firm Cygnet Texkimp has a government-issued licence to export to Armenian firm Rydena. According to the Guardian, Cygnet is planning to export machines that are used to produce carbon fibre materials that can be used across both military and civilian applications.
However, Guardian reporting has found that Rydena “was established two years into Russia’s invasion of Ukraine by former executives of a company that has emerged as one of the Kremlin’s important military suppliers”.
Rydena has said it doesn’t do business with Russia, while Cygnet said it “undertook detailed end-user checks required by export controls and received full export approval” from the government. However, MPs and experts are raising concerns about the arrangement.
“There are a bunch of red flags here and the government has to explain what it did to assure itself that this was all fine,” said Liam Byrne MP, who chairs the House of Commons business and trade committee.
“We’re deeply concerned that the government’s enforcement posture is not in the right place.”
Sanctions expert Anna Bradshaw told the Guardian that there are wider questions to be raised about end-user undertakings.
“There is a clear diversion risk and if the response is that this is mitigated by an end-user statement then that’s very worrying,” she said.
“Everyone knows that an end-user undertaking is a limited remedy. If it’s breached, the ship has sailed.”
Turiccki, who advises businesses with sanctions compliance, said the episode is a reminder of the importance of due diligence beyond end-user undertakings.
“Companies looking to attain export licences should complete end-user undertakings, as is required by the government,” she said.
“However, given the seriousness of Putin’s illegal invasion of Ukraine, businesses should be extra careful about who they are selling to. This isn’t just a matter of compliance, but it is a question of not contributing to the atrocities that the Kremlin is instigating in Ukraine, and an issue of national security for the UK.
“Companies exporting goods subject to controls and sanctions should consider going further than compliance when it comes to ensuring they aren’t inadvertently supporting Putin’s illegal war efforts.”
EU reliant on US tech
EU member states are pessimistic about their ability to decouple from US tech, amid concerns that the White House could use Europe’s reliance on American technology as a tool for coercion.
Politico surveyed EU capitals on “their relationship with American tech”, with four out of the eight that responded noting that the task of “building a non-American digital ecosystem capable of supporting governments and essential services” was “enormous”.
“A full technological ‘decoupling’ from the US is neither a realistic objective nor one that would serve Europe’s broader strategic interests,” said Lithuania’s economy minister, Edvinas Grikšas.
The pessimism comes amid claims from French President Emmanuel Macron that the EU must reduce dependencies on foreign technology and should adopt a “European preference” policy to support the bloc’s own tech sector.
The US, for its part, is looking to back its tech sector by exempting companies such as Amazon, Google and Microsoft from upcoming tariffs that the White House is imposing on semiconductor chips, the FT reports.
UK-India deal debated in Parliament
MPs began a debate on the upcoming implementation of the UK’s new free trade agreement with India.
Trade minister Sir Chris Bryant opened the debate by saying that UK trade with India had already grown by 15% last year, with India set to become the third largest economy in the world by 2029.
Shadow business and trade minister Andrew Griffith welcomed the deal, citing evidence submitted to the House of Lords International Agreements Committee by the Chartered Institute that it would help to bring down consumer prices, particularly for textiles, gems and engineering goods.
Also in the trade news today
- The Hill reports that Republicans in the US House of Representatives are trying to reinstate a ban on fellow members calling snap votes on Trump’s tariffs
- German chemical company BASF has decried the EU’s “obsolete” emissions trading system for increasing energy costs and red tape amid increasing competition from China, the FT reports
- Preliminary 2025 figures from shipping giant Hapag-Lloyd, including an 8% increase in transport volumes, suggest “robust growth” for global trade last year
Yesterday in trade
- EU leaders were preparing to gather to discuss the future of the single market
- National Apprenticeship week began
- Pound sterling dropped against the Euro amid uncertainty over Sir Keir Starmer’s position as prime minister
You can read yesterday’s trade news here.
