A brush with sanctions: the Crown Court clarifies when luxury goods are “made available” under the UK’s Russia sanctions regime

A brush with sanctions: the Crown Court clarifies when luxury goods are “made available” under the UK’s Russia sanctions regime

In one of the first potential corporate prosecutions concerning the UK’s luxury goods sanctions, the Court in R v Hauser & Wirth Gallery Limited and Artay Rauchwerger Solomons Limited [2026] EWCR 7 has provided useful guidance on when luxury goods are “made available” to a person connected with Russia. The decision will be of particular interest to businesses operating in sectors where high-value goods, logistics arrangements and customer due diligence intersect.

Background

The case arose from the sale and intended shipment of George Condo’s artwork Escape from Humanity to Alexander Popov, a Russian national.

The Defendants were Hauser & Wirth Gallery Limited (“H&W”), an art gallery, and Artay Rauchwerger Solomons Limited (“ARS”), a fine art logistics company engaged in the storage and transportation of artworks. They were charged with offences contrary to regulation 46B(2)(b) of the Russia (Sanctions) (EU Exit) Regulations 2019, on the basis that they had made luxury goods available to a person connected with Russia.

The Defendants applied to dismiss the charges on the grounds that there was not sufficient evidence that:

• the artwork was “made available to” Mr Popov by H&W and ARS within the meaning of regulation 46B(2)(b); and/or 
• at the relevant time, Mr Popov was “ordinarily resident in Russia”, and thus a person “connected with” Russia within the meaning of regulation 46B(2)(b).

What does “making available” mean?

The Defendants argued that luxury goods are only “made available” once all steps necessary for the recipient to obtain full disposal over the goods have taken place — in practical terms, on physical delivery.

The Court rejected that narrow construction, holding that, in the ordinary meaning of the phrase, goods may be “made available” before physical delivery. The relevant question was whether, in practical terms, the recipient has obtained the benefit of the goods or they have been placed at that person’s disposal, even if physical possession has not yet passed.

The Court also rejected the suggestion that regulation 46B(2)(b) is limited to goods delivered within Russia. Unlike other parts of the sanctions regime, the prohibition contains no express geographical restriction. In the Court’s view, that reflected the purpose of preventing luxury goods from reaching persons connected with Russia, including where delivery is to take place outside Russia.

On the facts, the Court concluded that the artwork had been “made available” when it was released into the custody and control of those acting on Mr Popov’s instructions for onward shipment. That conclusion did not depend on title alone. It reflected the combination of title, payment, constructive possession and release into the logistics chain directed by Mr Popov.

Available, but not connected?

Although the Court found that the artwork had been made available, it held there was insufficient evidence to find that Mr Popov was a person “connected with Russia” at the relevant time. Regulation 21(2) provides that an individual is connected with Russia if they are ordinarily resident in Russia or located in Russia.

The Court reaffirmed that ordinary residence is a question of fact and degree. It is not established simply because an individual is a national of a country or maintains continuing business, family or financial connections there.

The prosecution relied on evidence that Mr Popov held Russian citizenship at the relevant time, owned two businesses in Russia and that his wife continued to work as an art lecturer there.

The Court considered that evidence insufficient in light of material pointing the other way. That included evidence that Mr Popov had rented out his Moscow home, secured accommodation in Armenia and Bosnia and Herzegovina, and was seeking to renounce his Russian citizenship. Taken together, the evidence supported the conclusion that he had embarked on a genuine relocation process.

Since proof to the criminal standard that Mr Popov was a person connected with Russia is an essential element of the alleged offences under reg.46B(2)(b), the Court held that the lack of sufficient evidence on “ordinary residence” was fatal to both counts (irrespective of its conclusion on “making available”) and granted the Defendants’ application to dismiss the charges against them.

What this means for businesses

The decision is a useful reminder that the UK sanctions regime is likely to be interpreted broadly to ensure it fulfils its purposes and by reference to commercial realities. For businesses dealing in high-value goods, compliance analysis should not stop at physical delivery. Payment, title, instructions to logistics providers, constructive possession and release into a customer-directed supply chain may all be relevant to whether goods have been made available.

Businesses should ensure their due diligence on sanctions considers the full factual picture, particularly where an individual asserts that they have relocated or are no longer ordinarily resident in Russia.

In practical terms, the case underlines the need for careful, documented decision-making in sanctions compliance. Where there is doubt, businesses should be able to evidence not only the screening steps undertaken, but also the reasoning applied to questions of availability, control, residence and connection with Russia.

If you would like to discuss the implications of this case, please contact Guy Bastable, Andrew Matheson, or Sam Aldous in Burges Salmon’s Corporate Crime & Investigations team.

This article was co-authored by Akosua Moore.