New UK Sanctions Target Refined Oil and LNG Transport Prohibitions

As of 20 May 2026, the United Kingdom has significantly expanded its trade sanctions regime against Russia, introducing complex new layers of compliance for importers and logistics providers. The Russia (Sanctions) (EU Exit) (Amendment) Regulations 2026 (SI 2026/543), which were laid before Parliament on 19 May and came into force the following day, represent a major shift in how the UK handles 'back-door' imports of Russian energy products. For trade compliance professionals and customs brokers, these changes necessitate an immediate review of supply chain due diligence procedures, particularly for refined oil products (CN 2710) originating from third countries.

Closing the 'Refinement Loophole'

The most consequential update is the new prohibition on the import of oil products processed in a third country using Russian crude oil. Previously, Russian crude that underwent substantial transformation (refining) in a third country was often treated as originating from that third country for customs purposes. The 2026 Regulations effectively close this 'refinement loophole.' Under the new Regulation 46Z9F, it is now an offence to import relevant oil products into the UK if they were produced using Russian-origin crude, regardless of where the refining took place. This measure is specifically targeted at reducing the Kremlin's revenues by ensuring that intermediaries cannot bypass existing energy embargoes by simply moving oil through third-country refineries.

To mitigate the immediate impact on global energy stability, the government has introduced a 'Net Exporter' presumption. Imports from countries that are recognized net exporters of crude oil will benefit from a presumption that their products are made from domestic crude. In such cases, importers will not typically be required to provide exhaustive supply chain history at the point of entry. However, HMRC retains the power to request evidence retrospectively if they have 'reasonable grounds' to suspect circumvention or if the specific shipment originates from a refinery known to process blended fuels.

LNG and Maritime Restrictions

The amendments also introduce a ban on the maritime transportation of Russian liquefied natural gas (LNG). This includes prohibitions on transporting Russian LNG from Russia to third countries or between two third countries, as well as providing ancillary brokering or financial services. This brings the UK into closer alignment with EU Article 3ra measures introduced earlier this year. A transitional period is provided via General Trade Licences for pre-existing long-term contracts until 1 January 2027, but new contracts are strictly prohibited. Furthermore, the 'shadow-fleet' vessel list has been expanded, with wide-ranging service bans for specified ships involved in bypassing price caps or environmental standards.

Practical Implications for UK Trade Professionals

  • Enhanced Due Diligence: Customs brokers must now move beyond 'Country of Origin' certificates. For oil imports from non-net-exporter countries, you must secure 'End-Use Undertakings' and feedstock origin declarations from refiners to prove no Russian crude was used.
  • Licensing and Coding: A new General Trade Licence (GBSAN0004) has been issued for the import of diesel and jet fuel from specific sources. When using this, traders must use code 9L51 on their customs declarations. Failure to apply the correct code can lead to immediate vessel detention and potential criminal investigation.
  • Liability Risks: The 2026 Regulations do not prescribe a specific standard for due diligence, but the expectation is that 'reasonable precautions' are taken. Relying solely on supplier representations without independent verification may no longer satisfy the Office of Trade Sanctions Implementation (OTSI) or HMRC in the event of a breach.
  • System Updates: Compliance software must be updated to include the latest list of 'specified ships' and the revised list of 36 sanctions regimes now subject to the enhanced end-use controls that also came into effect this month.

Conclusion: The introduction of SI 2026/543 marks a new era of 'granular' sanctions enforcement. Members are advised to audit all petroleum-related contracts immediately and ensure that their customs clearance instructions for June 2026 onwards reflect these new, more stringent legal requirements.