UK Updates Guidance on Russia Sanctions Covering Professional Services and Construction

The UK government has updated its guidance on sanctions restricting the provision of professional and business services to Russia, clarifying the scope of consultancy and public relations activities and publishing detailed guidance on construction services. The changes, issued on 27 October 2026, provide businesses with further direction on identifying prohibited services, assessing indirect recipients and determining when an exception or licence may apply.

The updated material is relevant to companies providing services to Russian businesses, international groups with Russian subsidiaries, professional advisers and organisations whose operations involve cross-border contracts. It emphasises that compliance cannot rely solely on checking whether a customer appears on the UK Sanctions List. Certain service restrictions apply to people and businesses connected with Russia even when they have not been individually designated.

The restrictions have been introduced in stages. Prohibitions on accounting, business and management consulting, and public relations services began on 21 July 2022. Restrictions covering advertising, architecture, auditing, engineering, and IT consultancy and design followed on 16 December 2022. Construction services were added on 20 May 2026. The October update explains the application of these existing restrictions rather than introducing all of them as new measures.

The rules cover the direct and indirect provision of specified services to a person connected with Russia, subject to applicable exceptions and licences. The definition of a person connected with Russia is broader than the list of designated individuals and entities. It can include individuals ordinarily resident in or located in Russia, as well as legal persons incorporated or constituted under Russian law or domiciled there.

This distinction is important for international corporate groups. A Russian-incorporated subsidiary may fall within the restrictions even if it is not separately sanctioned by name. Services delivered through a parent company, an overseas affiliate or a third-party contractor may also require scrutiny where the ultimate recipient is connected with Russia.

The guidance clarifies that business and management consulting encompasses advice, guidance and operational assistance relating to business policy, strategy, planning, structure and organisational control. Intragroup services provided to oversee a subsidiary may therefore require assessment, as may advisory work connected with divestment or the winding down of operations. Certain certification activities performed by conformity assessment bodies may also fall within the relevant definition, depending on the nature of the work.

The focus is on the substance of the service rather than the industry in which the supplier operates. Technology companies, multinational headquarters and professional services firms may all provide activities covered by the restrictions. Routing a service through an intermediary or contracting with a company in a third country does not automatically remove the prohibition if the service is ultimately delivered directly or indirectly to a Russian-connected recipient.

The updated guidance also addresses boundaries around IT consultancy and design. Routine civilian telecommunications, specified internet communications and data storage are not automatically prohibited simply because they involve digital technology. However, businesses must examine the actual services being supplied and consider whether other sanctions restrictions apply. A contract containing several different deliverables may require a more detailed assessment than its general description suggests.

The construction guidance covers a broad range of activities, including demolition, site preparation, civil engineering, assembly of prefabricated structures, electrical and plumbing installation, roofing, finishing work and equipment rental with an operator. These restrictions operate alongside existing measures covering architectural and engineering services, making it important for contractors to distinguish between different elements of a project.

A transitional exception applied to certain obligations under contracts concluded before 20 May 2026, including necessary ancillary contracts. However, the relevant work had to be completed by 20 August 2026, and notification to the authorities was required by the same date. Both deadlines have passed. Businesses therefore cannot assume that a contract entered into before the restriction began continues to provide permission for ongoing work.

Exceptions may be available for emergency work and essential maintenance. Emergency work concerns the urgent prevention or mitigation of events likely to have a serious and significant effect on health, safety, infrastructure or the environment. Essential maintenance may include work necessary to preserve structural integrity, maintain plumbing or energy systems, or repair deterioration and faults. For these exceptions, the guidance requires justification to be provided to the Office of Trade Sanctions Implementation (OTSI) within five working days after the work begins.

Other exceptions cover certain diplomatic or international-organisation activities and services required to comply with UK statutory or regulatory obligations. Their availability depends on the specific wording and circumstances, and businesses should not interpret them as blanket exemptions for an entire project or contractual relationship. Where no exception applies, a licence may be required before the service can be provided.

The guidance also highlights the importance of reviewing subcontracting arrangements and complex corporate structures. A business outside Russia may commission services that ultimately benefit a Russian-incorporated company. A single engagement may combine design advice, engineering assessments, construction and installation, with different elements potentially subject to different restrictions. Identifying the actual recipient and mapping the delivery chain can help establish whether each activity is permissible.

The UK sanctions framework also distinguishes between restrictions on financial activity and restrictions on providing services. Financial sanctions administered by the Office of Financial Sanctions Implementation (OFSI) include asset freezes and other measures relating to designated persons. The service restrictions fall within the trade sanctions framework, for which OTSI has relevant licensing and enforcement responsibilities. A transaction may require assessment under both regimes.

For compliance teams, the updated guidance reinforces the need for due diligence that goes beyond name screening. Businesses should identify the legal identity and location of each recipient, define the services and deliverables being supplied, establish the relevant UK connection of the service provider and document the legal basis for proceeding. Contracts, statements of work, ownership structures, subcontracting arrangements and communications identifying the ultimate beneficiary may all be relevant.

Licensing decisions also require precision. A licence granted for one provider, recipient, service category or period should not be assumed to cover different activities. Approval for consulting services, for example, does not automatically authorise construction work that is separately restricted. Businesses should review the precise scope of any existing authorisation and obtain confirmation where necessary.

The updated guidance provides greater clarity on how the UK’s Russia-related service restrictions should be assessed in practice. For companies with Russian-connected customers, subsidiaries or contractual relationships, the immediate priority is to review existing and proposed engagements against the relevant definitions, exceptions and licensing requirements. The key question is not simply whether a counterparty is sanctioned by name, but whether the service itself is restricted and who ultimately receives it.

By fLEXI tEAM