Export control and sanctions dominated trade headlines this week, as HMRC issued another seven-figure fine for a breach and the Chartered Institute released its latest guidance on navigating compliance requirements.
Iran-backed Houthi rebels have also made significant gains along the Red Sea coast in Yemen, capturing the port city of Mokha and advancing closer to another strategically significant shipping chokepoint.
There was also good news for UK GDP growth and an important message for traders on upcoming Customs Declaration Service (CDS) downtime.
Big picture: It was a significant week in UK export controls and sanctions.
HMRC announced a second seven-figure compound settlement paid by a company for falling foul of its Russia sanctions regime, following the £6.4m penalty issued to defence firm Airbus earlier this year for a breach of UK export controls rules.
Biotech firm Illumina Cambridge agreed a £7.44m settlement after voluntarily disclosing breaches of UK Russia sanctions. The breach involved moving goods between international firms within its corporate group, which were then exported to Russia.
“The case highlights how sanctions breaches can occur when UK businesses are involved in supply chains that result in sanctioned goods being supplied indirectly to Russia,” HMRC wrote. It added that this can happen “even when no goods have been exported from the UK”.
For more support with export controls compliance, you can download our free guide to managing controls within your organisation. This includes a step-by-step guide towards building your own internal compliance programme.
Our members, international law firm Eversheds Sutherland, also provided expert insight into what businesses should consider in light of HMRC’s change in approach towards enforcement of export controls and sanctions.
The other major development this week was the UK’s announcement of new sanctions on trade with illegal Israeli settlements in the West Bank. The UK was joined by France and Canada in issuing a trade ban, with several other western nations setting out intentions to introduce a similar ban.
Good week/bad week: A good week for the EU’s Custom Reform programme, as Politico’s Morning Trade newsletter reports Dutch customs data showing Brussels’ decision to remove its ‘de minimis’ import tax threshold – below which goods imported into the bloc weren’t subject to customs charges – has worked as intended.
Since introducing a €3 charge on every category of item imported, the volume of small packages imported into the Netherlands dropped by almost two thirds, falling from 22 million in June to just over eight million in August.
The lead negotiator for the EU Customs Reform package in EU Parliament, Dutch MEP Dirk Gotink, told the publication the drop was “bigger than [he] expected”.
Concerns about cheap, poorly made goods that flout EU safety and environmental standards, largely exported by Chinese e-commerce retailers, is Brussels’ stated rationale for removing de minimis.
However, the concern has been raised that, instead of directly shipping small packages to Europe via air freight, companies are bulk-shipping items via containers to circumvent the customs charge – as an increase in bulk orders was observed in Netherlands over the same period.
In more worrying news, there’s a threat of greater disruption to Middle East shipping, as Iranian-backed Houthi rebels have reportedly captured the Yemeni port city of Mokha.
As part of an ongoing offensive to capture more of the Red Sea coast, the Houthis are driving closer to the the Strait of Bab al-Mandab, a shipping chokepoint in the region that facilitates European and Asian trade, acting as a “southern gateway” to the Suez Canal.
Claiming Mokha brings the Houthis within 46 miles of Bab al-Mandab, with Yemen specialist at the Royal United Services Institute’s (Rusi), Baraa Shiban, telling the Guardian that the country’s government has opened new fronts against them, but that significant advances were made by the rebels this week.
Hundreds of people have been killed by the offensive over the past week and thousands displaced, according to BBC reporting. Iran has already significantly curtailed trade through the Strait of Hormuz in response to this year’s conflict with the US.
Chartered Institute director general Marco Forgione said that “the Bab al Mandab is once again living up to its name, the ‘Gate of Tears’”.
“The seizure of Mokha gives the Houthis a stronger position close to one of the world’s most important maritime chokepoints.”
He added that “supply chains have adapted to operating amid near-permanent disruption”.
“For UK businesses, this is another stark reminder that resilience can no longer be treated as a contingency plan.”
How’s stat? 62%. That’s the percentage of the public surveyed by think tank British Future who said that they would like to see closer cooperation with the EU on trade.
Trade was the policy area where support was most encouraged, followed by defence (57%), health (56%) and agriculture (54%).
That news comes as the Labour government’s EU-UK ‘reset’ agenda faced a setback this week, with EU officials suggesting this November’s bilateral summit may be short on policy announcements, with more concrete progress likely next year.
Quote of the week: “Many of the businesses reporting the largest turnover in July 2026 are involved in activities relating to artificial intelligence.”
That was the ONS commenting after “unexpectedly” strong UK GDP growth of 0.4% was recorded in July.
The week in customs: Traders have been told to prepare for a longer-than-usual period of CDS downtime.
In an email, HMRC’s Joint Customs Consultative Committee announced that the service wouldn’t be available between Saturday 26th September 2026 from 7pm until 8.30am on Sunday 27th September 2026.
This is set to affect Goods Movement Vehicle Service imports, and attempts to create, update or “embark” goods movement references, with guidance also provided for exports and moving consignments of controlled goods using pre-lodged declarations.
What else we covered: The US-Canada trade war escalated this week, with the US imposing further levies on Canadian goods, including dairy, alcohol and motorcycles, after Canada’s retaliatory rates on US$20bn worth of US goods came into effect on Tuesday.
Brussels also advanced its domestic procurement drive this week, fleshing out plans to encourage public procurement of “quality” EU products over cheap imports, and including domestic procurement provisions in proposals to support innovative businesses to scale within Europe.
True facts: It’s not just passengers frustrated by the air traffic control glitch that grounded over 2,000 UK flights this week, air cargo has also been affected.
Outbound international cargo capacity from London Heathrow fell from 4,200 tonnes in the first week of September to 2,500 tonnes on 8 September, reports Air Cargo News.
The Loadstar reports that while air cargo operators will need to work through “a significant backlog” after the outage, air freight rates are likely to be less impacted. One freight forwarder told the publication that many intermediaries are likely to absorb the cost of upgrading general cargo to priority status to get goods moved within acceptable timeframes.
