British military equipment diverted to Russia

Wednesday 11 February 2026

The revelation that the United Kingdom granted export licences for specialised machinery to an Armenian intermediary, amidst credible concerns that the equipment could be diverted into Russia’s military supply chain, is not merely an embarrassment for British export control. It is a demonstration of how sanctions regimes, however carefully drafted, are beaten in practice—by routing goods through states that are not themselves sanctioned, by using corporate structures designed to conceal beneficial ownership, and by exploiting the gap between what an exporter can reasonably know and what a determined procurer can hide. 

Shadow exports are not always “smuggling” in the cinematic sense. Often they are paperwork exports—lawful on their face—performed through a chain of distributors, freight forwarders, re-packagers and “civilian” end-users whose true commercial purpose is to launder origin and intent. Western governments have responded since 2022 with sweeping prohibitions and a growing body of counter-circumvention guidance, including explicit warnings to exporters about diversion risks and the limits of end-user certificates. Yet the trade persists because the incentives are strong, enforcement is technically difficult and the modern economy is built around intermediaries.

What further measures can be taken, beyond the present mixture of licensing, company compliance and occasional prosecutions?

Treat diversion risk as a licensing fact, not a vague suspicion

Export control officials already consider risk, but recent cases show that “risk” can be judged too politely. Where a destination is demonstrably associated with re-export surges into Russia, the presumption should shift—especially for goods that are dual-use (civilian in appearance, military in effect).

This means:

• A rebuttable presumption of denial for categories of goods that Russia has repeatedly sought via intermediaries, where the destination state shows abnormal trade patterns with Russia since 2022.

  
  

• A formal requirement that applicants explain the commercial logic of the deal—why the end-user needs this item, in this quantity, with this specification—rather than simply naming an end-user.

  
  

• Mandatory beneficial ownership disclosure for the end-user, any parent company and any broker in the chain, with criminal liability for false statements.

None of this requires a new treaty. It requires a political decision that licensing is not simply “permission to export” but a national security judgement, and that the default answer in high-risk corridors must sometimes be “no”.

Move beyond end-user certificates towards verification and auditing

End-user certificates are necessary, but they are not sufficient—particularly when the end-user is newly formed, poorly capitalised or connected (directly or historically) to sanctioned Russian industry. If a government is willing to license, it must also be willing to verify.

Western governments can expand post-shipment verification in three practical ways:

• Contractual “no re-export to Russia” clauses, backed by audit rights and immediate termination provisions, should be required for specified goods and destinations; the UK has already encouraged such clauses in its guidance to exporters. 

• Randomised compliance audits of exporters and freight forwarders for high-risk destinations, including document sampling across shipments; not merely investigations after a scandal.

  
  

• A standing programme of post-shipment checks, conducted either by diplomatic staff or trusted third parties, to confirm the item is installed where it was said to be installed.

Verification is not perfect, but its purpose is not perfection—it is deterrence. If intermediaries believe there is no realistic chance of inspection, they will continue to take the risk.

Build a sanctions intelligence picture that is shared, usable and fast

Sanctions enforcement is often hampered by a familiar problem—information exists but sits in silos. Customs services see shipping data. Financial intelligence units see payments. Export control offices see licence applications. Industry sees suspicious approaches. Too often these pictures are not fused into a single, operational view.

A stronger approach includes:

• A joint sanctions intelligence cell that combines customs, export control, financial intelligence and relevant security services, tasked specifically with identifying diversion networks and feeding that intelligence into licensing decisions.

  
  

• Rapid alerting to industry, not as generic “be careful” circulars but as actionable typologies—common front-company patterns, recurrent freight routes, suspicious payment terms and “red flag” intermediaries.

  
  

• Shared lists across allied states of high-risk entities that are not yet sanctioned but are assessed as procurement nodes.

The United Kingdom has published general counter-circumvention guidance, which is helpful, but the next step is targeted, intelligence-led prevention. 

Use trade data as a trigger for enforcement, not merely analysis

One of the clearest indicators of circumvention is statistical—sudden, disproportionate growth in exports in sensitive categories to a destination state, followed by mirror growth from that state to Russia. Investigations have repeatedly pointed to this pattern in the wider region, which is precisely why Armenia has attracted scrutiny. 

Western governments can institutionalise data triggers:

• If exports of controlled or near-controlled goods spike beyond a defined threshold, licences for that category to that destination are paused pending review.

  
  

• Customs and port authorities receive automated flags for consignments whose routing resembles known diversion pathways.

  
  

• Financial institutions are required to apply enhanced due diligence to payments associated with these corridors.

This is not an ideological project. It is an engineering project—link databases, define anomalies, act quickly.

Expand “catch-all” controls for Russia-related military end-use

A persistent difficulty is that Russia’s procurement networks deliberately shop in the grey zone—items that are not listed as controlled, but which can be used in manufacturing processes relevant to military production. When a case involves machinery used to produce advanced materials relevant to military applications, the moral argument is obvious but the legal control category may be contested. 

“Catch-all” controls—powers to require a licence for items not otherwise listed when there is reason to believe a military end-use—are the correct tool. The further measure is to make Russia-related military end-use a specific, explicit trigger for such controls across allied jurisdictions, with common definitions, so that procurers cannot exploit the weakest link.

Target the intermediaries’ enablers: freight, insurance and finance

Diversion networks rely on mundane services:

• Freight forwarders willing to accept implausible routing

• Insurers willing to underwrite shipments without asking questions

• Banks willing to process payments with thin documentation

Western governments should widen enforcement from “exporters” to the service layer.

That can include:

• Licensing or registration requirements for freight forwarders handling controlled or sensitive categories to high-risk destinations, with meaningful penalties for repeated red-flag failures.

  
  

• Sanctions designations that focus on logistics nodes as well as end-users.

  
  

• Clear liability standards for financial institutions that ignore patterns consistent with sanctions evasion.

Russia’s “shadow fleet” debate has shown how service-layer pressure can bite in practice—when insurers and ports are constrained, behaviour changes. The same logic applies to shadow exports of industrial goods. 

Make penalties real and reputationally painful

A system that treats breaches as administrative mishaps will be exploited. The point is not to punish innocent error. It is to raise the cost of wilful blindness.

Further measures include:

• Higher civil penalties scaled to company turnover, not merely shipment value

• Director liability for repeated compliance failures

• Public naming of enforcement outcomes, so that the market itself imposes discipline

Where enforcement is visible, compliance becomes a board-level concern rather than a compliance officer’s headache.

Diplomacy with intermediary states: enforcement support, but also consequences

Armenia is not Russia’s vassal in the way Belarus is, and she has her own security anxieties, trade needs and political pressures. Yet if her territory is being used as a procurement corridor into Russia’s war economy, western governments must treat this as a serious matter of shared security. That means a dual approach:

• Offer practical support—training customs officials, sharing typologies, building investigative capacity, helping legitimate Armenian businesses comply with sanctions expectations; the UK has already produced sanctions guidance aimed at Armenian businesses. 

  
  

• Establish consequences—where a state persistently fails to address re-export to Russia, apply escalatory restrictions on categories most abused, and consider targeted sanctions on entities facilitating diversion.

The aim is not to “punish” a small country. It is to remove the commercial space in which diversion networks flourish.

Acknowledge the uncomfortable truth: allied unity is a supply-chain problem

Sanctions are often described as diplomacy. In practice, they are supply-chain governance. Russia’s war effort is sustained by thousands of components, machines and materials, many of which originate in countries that have formally condemned her aggression. Western governments can, and should, tighten controls further—but the decisive shift is cultural as much as legal.

It requires accepting three truths.

First, the licensing question is not simply whether a particular export is lawful today, but whether it is likely to strengthen Russia’s capacity to kill Ukrainians tomorrow.

Secondly, intermediary trade is not a side issue—it is now the principal battlefield of sanctions enforcement.

Thirdly, prevention is cheaper than scandal. Once the machinery has shipped, the argument becomes diplomatic, the trail becomes contested and the public trust in the system becomes harder to repair.

The United Kingdom’s case is a warning to every western capital. If the lesson drawn is merely to write sterner guidance notes, diversion networks will adapt and continue. If the lesson is to treat sanctions evasion as an intelligence-led, service-layer, data-driven national security problem—then the space for shadow exports can be narrowed, and Russia’s procurement effort made slower, more expensive and more fragile.