Guidance

Complying with sectoral software sanctions

Published 24 April 2025

This guidance contains information on sectoral software sanctions in the Russia (Sanctions) (EU Exit) Regulations 2019 (‘the Russia Regulations’).

It provides guidance on compliance and considers what information to include in licence applications related to the prohibitions in Chapter 4N of the Russia Regulations.

Chapter 4N and it’s corresponding Schedule 3IA have been inserted in an amendment to the Russia Regulations, the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025.

For general information regarding licensing for trade sanctions, please refer to the Russia sanctions statutory guidance.

This is a practical guide for professionals and businesses potentially affected by the Russia Regulations. It does not constitute legal advice.

If you are unclear about any aspect of the Russia Regulations, you should seek independent legal advice.

Overview

The purpose of the Russia Regulations is to encourage Russia to cease actions: 

• destabilising Ukraine 
• undermining or threatening the territorial integrity, sovereignty or independence of Ukraine 

Sanctions on sectoral software and technology aim to prevent individuals or entities in the UK, and UK persons overseas, or persons connected with Russia, from:

• directly or indirectly making available sectoral software and technology to a person connected with Russia or for use in Russia
• transferring sectoral software and technology to a place in Russia or to a person connected with Russia
• directly or indirectly providing technical assistance, financial services and funds, or brokering services relating to sectoral software and technology

These measures are aimed at increasing economic pressure on the Russian government, and degrading its ability to fund the war.  

All measures are subject to certain exceptions. Licences may be granted where the provision of prohibited sectoral software and technology is consistent with the sanctions regime. Please see the ‘exceptions and licences’ section below for more information.

Also see guidance on [complying with technology transfer sanctions] in the Russia Regulations.

Who the sanctions apply to

The prohibitions apply to any individual or entity in the UK and to UK persons overseas.  

‘UK persons’ includes UK nationals and all bodies incorporated or constituted under the law of any part of the UK. Accordingly, the sanctions apply to UK nationals and branches of UK companies operating overseas. See the full definition in Section 21 of the Sanctions and Anti-Money Laundering Act 2018. 

For subsidiaries of UK companies operating overseas, which have a different legal status to branches, businesses will need to consider how the sanctions apply to UK nationals who they employ or work with.

Definitions and scope

For the definition of sectoral software and technology please refer to Schedule 3IA of the Russia Regulations.

To understand when a person is regarded as ‘connected with’ Russia please refer to regulation 21 of the Russia Regulations. This can be considered to include:

• companies incorporated or constituted under Russian law, including a subsidiary of a UK company in Russia
• companies domiciled in Russia
• an individual or group of individuals who are ordinarily resident in Russia

Scope

The sectoral software and technology measure prohibits the transfer and making available of sectoral software and technology, as defined above, by intangible means. For example, by downloading software from the internet, providing the software by means of ‘Software as a Service’ (SaaS) or accessing the software via an app.

Broader prohibitions on the export, supply and delivery of certain goods already prohibit the transfer of software provided by tangible means. This is because goods sanctioned under the Russia Regulations - such as a flash drive; within the hard drive of a computer; or contained within other goods and machinery - are already subject to sanction.
Existing prohibitions on technology transfers may also prohibit software, for example - but not limited to - those focused on restricted technology; dual-use technology; and critical industry technology.

Whether the provision of sectoral software and technology is within scope of UK sanctions regulations depends on factors which include, but are not limited to:

• the type of software provided and whether this falls within the definitions as described within Schedule 3IA
• whether there is an applicable exception within the Russia Regulations
• who the suppliers and recipients of the software are

We recommend businesses take independent legal advice to determine whether their activities are within scope of the UK measures.

Compliance

Persons connected with Russia, including subsidiaries that are owned by UK persons, should not generally benefit from use of software and technology unless there is a relevant exception, or a licence has been granted.

To ensure compliance with sectoral software and technology sanctions, you should consider:

• who is providing the software and technology
• whether the software and technology falls within the scope of the prohibitions in Schedule 3IA
• who the recipients or end users of the software and technology are
• whether any relevant exceptions or licensing provisions are applicable

It may help to ask some of the following questions:

1. Are the providers UK persons as defined above?
2. Does the software you propose to provide fall in scope of the definitions in Schedule 3IA?
3. Who is the recipient or end user of the software?
4. Is the software or technology being provided for use in Russia or to a place in Russia?
5. Are any exceptions in the regulations applicable to your situation?
6. Will you need to apply for a licence?

There may be other questions specific to your situation that you will need to consider. This includes whether other sanctions apply, such as transport or financial sanctions, or other trade sanctions.

The most effective means by which to comply with sectoral software measures will likely depend on the individual circumstances of the situation at hand. You may wish to consider:

• introducing clauses in contracts requiring additional controls to be implemented to ensure that restricted software and technology is treated in line with sanctions
• introducing a “no-Russia clause” into contracts to ensure sanctioned sectoral software and technology is not made available to a person connected with Russia, to a place in Russia or for use in Russia
• increasing data collection on the end users of sectoral software and technology to assess whether the provision of sectoral software and technology is subject to prohibition
• assessing compliance in existing business practice – for example, the provision of relevant sectoral software and technology to subsidiaries in Russia

Exceptions and licences

These sanctions are subject to limited exceptions and licences.

The Russia Regulations set out exceptions to some of the sanctions prohibitions which apply within defined circumstances. An exception applies automatically and does not require you to obtain a licence issued in accordance with the Russia Regulations for a prohibited activity. These exceptions may require that you report this or seek approval from a responsible officer, as detailed in the legislation.

See our Statutory Guidance on the exceptions and circumstances you can get an authorisation or licence for a sanctioned activity.

Where software is subject to both trade sanctions and export controls, an exemption or licence under each set of legislation will need to apply. If there is an exemption or licence for the activity under one of the frameworks but not the other, it is still prohibited.

You may have a valid licence that took effect prior to the software and technology prohibitions in regulations 42A, 46YA, 46Z30A and 46Z34-46Z38 coming into force. If this licence permits an activity sanctioned by Chapters 4, 4H, 4M, 4N, 6 or 6B of the Russia Regulations, then you are permitted to transfer or make available the minimum required software and technology, or provide the minimum required direct or indirect services, to install, maintain, operate or repair goods or provide services which are specified in the licence.

This is set out in regulation 17 of the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2025 (‘the Transitional Provision’). Applications to renew such licences will need to include a request to transfer software and technology related to the goods or the provision of the services thereafter. 

For example, if you already have an existing licence to provide accounting services but you require software prohibited by Chapter 4N to deliver this service, then the Transitional Provision automatically extends your licence to also cover the software and technology until the expiry date of the licence. However, you will need to apply for a new licence covering both the services you wish to provide and the software necessary to deliver these services after that date.

Information in the public domain or that is basic scientific research

The sectoral software and technology controls in the Russia Regulations do not include information that is:  

• in the public domain 
• basic scientific research 

Technology is in the public domain if it is freely available with no restriction other than copyright placed on its further dissemination, such as on a website.

Technology is not in the public domain: 

• if it needs to be obtained from a supplier who controls the supply 
• where access is restricted to certain persons, like membership of an institute or requiring passwords 
• where it is subject to the Official Secrets Act, Ministry of Defence or government security classifications such as commercially confidential information 
• if it has been placed in the public domain in contravention of a statutory prohibition, for example classified material, as it is unlikely to be available without further restriction upon its dissemination 

Exporters are unlikely to place sanctioned technology onto freely available sites, for access by suppliers, customers or competitors. 

Technology and software used only for basic scientific research is not sanctioned. Basic scientific research might include, for example, the study of the low temperature electrical resistance of metals.

Applying for a licence

The Department for Business and Trade (DBT) has 3 licensing bodies responsible for administering licences on behalf of the Secretary of State. Which body you need to apply through is dependent on the activity you want to carry out. 

If you are carrying out an activity that falls under the remit of more than one licensing body, you will need submit separate licence applications for each one. It is your responsibility to ensure you have all the required permissions before exporting goods or transferring technology.

DBT has produced guidance where you can check which trade licence you need. This will guide you to the application page for each type.

Reporting a suspected breach of trade sanctions

If you think you may have breached software sanctions when crossing UK borders, including ancillary services relating to the transfer of that software, you should make a voluntary disclosure to His Majesty’s Revenue and Customs (HMRC) at exports.strategic@hmrc.gov.uk

To report a suspected breach relating to software by a UK entity or by UK persons, including any ancillary services to the transfer of that software, contact HMRC using report a breach to HMRC. 

If a suspected breach relates to software that has not crossed the UK border, but has transferred from a third country to a sanctioned location, including any ancillary services to that transfer, you should report this to the Office of Trade Sanctions Implementation (OTSI) using the report a breach tool. 

Read our data privacy notice for allegations of breach of services sanctions under The Russia (Sanctions) (EU Exit) Regulations 2019.