Nine Swedish authorities are investigating suspected large-scale exports to Russia through Swedish subsidiaries in third-party countries, raising concerns about sanctions evasion. In a report titled Sanctions Violation Compliance in Sweden 2025, authorities highlight that while the number of underreported cases is substantial, evidence remains limited. The report reveals a critical shift in how Swedish exporters must approach their supply chains, especially in light of Russia’s growing circumvention strategies.
New Requirements for Swedish Exporters
Starting in June 2025, Swedish companies that export sensitive products will be required to include specific “no Russia clauses” in contracts. These clauses will explicitly prohibit the re-export of goods to Russia, ensuring stricter compliance with international sanctions. The regulation also extends to the licensing of intellectual property rights, which will be subject to similar requirements starting December 2024.
A key feature of the new regulations is the heightened responsibility placed on Swedish exporters to monitor and control their entire supply chains—both within the EU and beyond. The Swedish authorities, including the Swedish Economic Crime Authority, the Swedish Financial Supervisory Authority, and the Swedish Police Authority, have emphasized that Swedish companies must take proactive steps to ensure that subsidiaries, particularly those located outside the EU, are not facilitating the circumvention of sanctions.
According to the Cooperation Council for Sanctions Compliance, Swedish companies are now expected to “do their utmost” to prevent any sanctions violations, even in regions with weak enforcement of sanctions.
Three Major Risk Scenarios Identified
The authorities have identified three high-risk scenarios where Swedish multinational corporations are most vulnerable to inadvertently aiding in sanctions evasion:
- Exports via Third Countries with Weak Sanctions Enforcement: Swedish industrial groups that manufacture goods in Sweden and export them to subsidiaries in countries with lax sanctions enforcement could see those products rerouted to Russia. Authorities have noted that many companies lack the proper controls to monitor this potential for diversion.
- Selling to Foreign Customers Without Full Supply Chain Oversight: Swedish exporters are at risk when they sell products to foreign customers without maintaining complete oversight over the subsequent handling and distribution of those goods. This opens the door for goods to be re-exported to Russia through intermediary markets.
- Establishing Procurement Networks Linked to Russia: Swedish companies may inadvertently create or be linked to procurement networks in Sweden that purchase goods intended for export to Russia via third-party countries. These networks pose a serious risk of facilitating sanctions violations under the radar.
Particularly Risky Markets and Trade Patterns
Swedish authorities have singled out certain regions and markets where the risk of sanctions evasion is especially high. These include the Eurasian Economic Union (EEU)—comprising Kazakhstan, Armenia, and Kyrgyzstan—where duty-free trade with Russia remains prevalent. In addition, countries such as Turkey, Serbia, the United Arab Emirates, India, and China have also been flagged as high-risk markets due to their trade relations with Russia.
The report draws attention to trade patterns that reveal a worrying trend: while Sweden’s direct exports to Russia plummeted after the imposition of sanctions in February 2022, exports to neighbouring countries such as Kazakhstan, Turkey, and the UAE have surged. This shift suggests that products originally intended for Russian markets may be rerouted through these third-party nations.
Strengthening Compliance Measures
In response to these growing risks, Swedish exporters are now required to implement stringent guidelines and controls to identify potential risks in their supply chains. The guidelines will ensure that companies maintain consistent oversight across all subsidiaries, regardless of location, to guarantee compliance with sanctions regulations.
The Swedish government and relevant authorities are working closely with businesses to ensure that these compliance measures are both practical and effective. Companies that fail to meet the new standards face severe penalties, including fines and restrictions on trade.
Conclusion
The Swedish government is taking bold steps to combat the growing threat of sanctions evasion through third countries. By tightening regulations and demanding stricter oversight of global supply chains, Swedish authorities aim to close the loopholes that have allowed sensitive products to reach Russian markets despite international sanctions. The new “no Russia clauses” and expanded oversight requirements signal Sweden’s commitment to upholding international sanctions and maintaining the integrity of its export sector.
As the global landscape evolves, it is crucial that Swedish businesses not only comply with the letter of the law but also embrace a culture of responsibility and vigilance in order to safeguard against inadvertent violations. The success of these efforts will depend on the effective collaboration between government bodies, businesses, and international partners.
The path forward is clear: Swedish exporters must take every measure to ensure their products do not contribute to Russia’s war machine or circumvent international sanctions, no matter where their subsidiaries are located.