Catch-all rule for Annex VII goods subject to the Russia embargo: Why companies should act now 

With the EU’s 18th sanctions package against Russia, existing embargoes have been tightened, and a targeted catch-all mechanism has been introduced. This particularly affects sensitive Annex VII goods that could strengthen Russia’s military or defence industry — even if they are shipped to third countries.
 

What does this mean for companies?

The catch-all mechanism triggers a case-by-case licensing requirement. Unlike traditional dual-use authorizations, exports are not generally prohibited; restrictions only apply when the competent authority identifies a potential risk of diversion to Russia. In such cases, companies must provide all available information on the end-use, end-user, and any involved parties in the supply chain.
 
Practical example: A machinery manufacturer ships CNC machines to a customer in South Korea. The authority notes that the goods could potentially end up in Russia. The company must now examine: Who is the ultimate end-user? How will the machine be used? Are there intermediaries involved? Only with this information can the license application be submitted correctly.
 

Review and adjustment of contracts in time

Many existing supply contracts lack clear provisions on end-use or end-user information. This can be problematic in catch-all cases:

• Missing information: Without contractual obligations, exporters may not receive all necessary details.
• Liability risks: Delayed license applications can lead to sanctions violations.
• Solution: Adapt contracts! Clear agreements on information obligations, cooperation duties, and termination rights protect companies.

 

Trade Compliance Audits as a practical tool

Trade Compliance Audits help companies implement catch-all requirements systematically:

1. Increase supply chain transparency: Keep track of all relevant end-users and transit points.
2. Identify risks early: Determine who could forward goods to Russia.
3. Prepare authorizations: Systematically collect documents, evidence, and records.
4. Optimize contracts: Embed information and cooperation obligations in a legally secure way.

 
This not only ensures legal certainty but also strengthens a company’s reliability as an international business partner.

 

Conclusion

The catch-all mechanism is not a blanket ban but a targeted risk-control instrument. Companies that proactively adapt their contracts, processes, and compliance structures benefit from predictability and legal certainty. Those who delay risk delays, fines, or sanctions—and miss the opportunity to position themselves as responsible players in international trade.

Act now: Review your supply chains, adjust contracts, and implement Trade Compliance Audits to manage catch-all risks effectively.