Sanctions compliance: Russia, Iran & beyond – What should traders watch out for?

Authored by Geert-Jan Verhees, Quality & Compliance Manager at Gaston Schul

Silent risks, serious consequences

As a compliance manager at Gaston Schul, I see first-hand how easily businesses can be caught off guard. Sanctions breaches can happen silently: a customer changes ownership, a dual-use item is misclassified, or a seemingly routine shipment transits through a restricted region. The risks are real, and the consequences – both financial and reputational – can be severe. So, what should traders be paying attention to right now?

The Russia factor: More than just military goods

Since 2022, the EU and UK have imposed sweeping sanctions against Russia, with dozens of new packages rolled out in response to the war in Ukraine. But it’s no longer just about traditional ‘sensitive’ goods. We’re now seeing restrictions extend to:

• ‘Common high priority’ items (e.g., electronics, vehicle parts, bearings)
• Circumvention routes via third countries (e.g. Kazakhstan, UAE, Türkiye)
• Service bans on logistics, brokering, and consulting linked to sanctioned activities

In July 2025, the EU adopted its 18th sanctions package, introducing further restrictions on Russia’s energy, banking and military-industrial sectors. This included bans on transactions with 22 additional banks, tighter measures on petroleum products processed in third countries, and adjustments to the oil price cap, and an expansion of the list of vessels identified as part of the so-called ‘shadow fleet’. At the same time, the UK’s Office of Trade Sanctions Implementation (OTSI) published fresh guidance on countering sanctions evasion (August 2025), underlining the growing enforcement pressure on logistics and trade operators.

One area I’ve encountered regularly is the challenge around dual-use items – goods that have both civil and military applications. Many traders are unaware that even indirect involvement (e.g., arranging transport or documentation) can trigger liability.

Iran & re-emerging sanctions risks

Iran is another high-risk zone. While JCPOA negotiations have stalled, enforcement is tightening again. The EU recently extended its restrictive measures until July 2026, citing Iran’s support for Russia and destabilising activities in the Middle East.

Most significantly, in August 2025, the UK, France and Germany triggered the UN ‘snapback’ mechanism, which will automatically reinstate international sanctions unless Iran returns to compliance within 30 days. Russia has floated a compromise to delay this snapback for six months, but businesses should prepare for a hardening compliance environment.

At the same time, the U.S. has escalated its maximum pressure campaign, sanctioning a leading Iranian oil tycoon, Mohammad Hossein Shamkhani, for his role in financing Iran’s energy exports and collaborating with Russia’s shadow fleet. This marks the largest Iran-related designation since 2018.

Importantly, the line between commercial and prohibited activity can be murky. Components shipped to legitimate firms in the UAE, for example, may ultimately be destined for Iran. That’s why robust end-use and end-user checks are vital.

‘I didn’t know’ is not a defence

It’s easy to think sanctions breaches only happen to companies knowingly taking risks. In reality, most violations we encounter stem from:

• Poorly maintained customer or supplier master data
• Inadequate training for operational staff
• Lack of risk-based due diligence on third parties

This is where a proactive compliance culture makes the difference. Screening should not be a one-off activity – it must be integrated across the supply chain, from onboarding to shipment release.

What can you do?

At Gaston Schul, we work with clients daily to reinforce their compliance posture. Here are five immediate steps we recommend:

1. Update your sanctions screening software – Ensure it covers EU, UK, US and UN lists, and flag ownership/control relationships.
2. Conduct a risk-based review of your partners and customers, especially in high-risk jurisdictions or those using transhipment hubs.
3. Train your staff regularly – Particularly those in sales, procurement and logistics roles.
4. Implement red flag checks for unusual routing, vague end-users, or inconsistent documentation.
5. Work with customs and trade compliance experts who can monitor the regulatory landscape and support real-time decision-making.

Final thoughts: Building resilience through sanctions compliance

Sanctions compliance isn’t just a legal box-tick – it's a reputational safeguard and a sign of corporate responsibility. In the current climate, enforcement authorities are increasingly focusing on due diligence failures, not just direct breaches. With the EU’s latest Russia package, the Iran snapback mechanism now in motion, and renewed U.S. measures, the stakes for traders have never been higher.

As the pressure builds, LSPs and traders who get ahead of the risk will be best placed to maintain resilience and trust with customers and regulators alike.