By Kavita Mistry 
UK sanctions impose extraterritorial compliance obligations on Indian businesses through comprehensive asset-freeze provisions, prohibiting dealings with designated persons’ funds and economic resources. The Russia Regulations categorically prohibit trust services provision and mandate reporting obligations. Contraventions constitute criminal offences punishable by imprisonment not exceeding seven years for financial offences or ten years for trade offences, alongside civil monetary penalties.
These sanctions potentially conflict with the India-UK Comprehensive Economic and Trade Agreement provisions for capital transfer liberalisation. Security-based exceptions permit restrictions only for narrow military-purpose cases, creating legal ambiguities regarding the current sanctions’ scope and application to commercial enterprises.
Indian enterprises in petroleum sectors and dual-use technology (as defined in the Russia Regulations by reference to the Dual-Use Regulation) face heightened compliance exposure and secondary sanctions risks, necessitating comprehensive legal risk assessments and strategic commercial reorientation.
Designation generates cascading effects within domestic markets and disrupts supply chain architectures with third-country jurisdictions that may elect voluntary compliance with UK sanctions, necessitating comprehensive commercial contingency planning and evaluation of alternative arrangements with UK counterparts. Enterprises pursuing alternative commercial methodologies to maintain legitimate Russian trade relationships must conduct comprehensive legal assessments of regulatory feasibility, commercial impact, and requisite compliance safeguards within the evolving sanctions architecture.