The automotive industry is one of the most globally integrated and logistically complex sectors in international trade. Vehicles and parts frequently cross multiple jurisdictions before reaching their end-user, supported by vast, multi-tiered distribution networks. While this global reach underpins competitiveness, it also exposes manufacturers, distributors and resellers to serious financial crime risks. Sanctions and export controls now sit at the centre of those risks. Increasingly, regulators view automotive goods, from engines and transmissions to advanced navigation systems, as dual-use items, capable of both civilian and military application. Exporters are therefore expected to demonstrate robust control of their products across the full lifecycle of trade, including re-export and aftermarket channels.
Automotive exporters in the UK and EU are now facing tangible enforcement outcomes, from multi-million-euro fines to criminal prosecutions. Original Equipment Manufacturers (OEMs) themselves have admitted compliance gaps after vehicles appeared in sanctioned jurisdictions via intermediary hubs. These developments underscore a pressing reality: the automotive industry is now firmly on the radar of sanctions enforcers, policymakers and investigative journalists alike.
The automotive sector faces unique vulnerabilities when it comes to financial crime. Its products are high-value, easily tradeable and often technologically sophisticated. Its distribution networks are multi-layered and fragmented; and its aftermarket is global, fluid and relatively opaque. Together, these factors create multiple vectors for sanctions evasion, trade-based money laundering and subsequent reputational harm.
Sanctions evasion through diversion: vehicles exported to permitted markets (such as Kyrgyzstan, Kazakhstan, or the UAE) are re-exported to Russia and other sanctioned jurisdictions.
Complex distribution chains: multi-tiered dealership structures obscure the identity of ultimate end-users, making Know Your Distributor (KYD) essential.
Aftermarket exploitation: small, high-value parts – including ECUs, transmissions and turbochargers – are frequently diverted under the guise of legitimate fleet maintenance.
Trade-based money laundering: over and under-invoicing, phantom shipments and misclassification of goods conceal illicit financial flows.
Document manipulation: falsified invoices, bills of lading and certificates of origin mask the true destination of exports.
Diversion of vehicles and parts is now entrenched across multiple trade routes and regulators have demonstrated a willingness to pursue enforcement where trade diversion is detected.
In Germany, a Bochum dealership was prosecuted in 2024 for exporting more than €5 million in luxury vehicles to Russia using falsified paperwork and fabricated trade routes.
In Lithuania, regulators imposed a €13.6 million penalty on a vehicle exporter after uncovering a pattern of cars routed through Belarus, Kazakhstan and Turkey before resurfacing in the Russian market.
In Central Asia, Kyrgyzstan’s sharp rise in European vehicle imports – far in excess of domestic demand – has been followed by the same models appearing in Moscow showrooms. Long-standing trading hubs have also been drawn in: Dubai’s Jebel Ali Free Zone, traditionally a centre for legitimate re-exports, has been linked to the parallel import of European luxury cars into Russia. In an industry where brand prestige and reputation are commercially critical, this presents a serious risk.
The consequences of non-compliance are severe. Beyond fines and legal liability, exporters face reputational damage, loss of regulator trust and potential exclusion from markets. Regulators are sharpening their focus on the automotive sector precisely because of its scale and vulnerability.
The compliance challenge is complex. Exporters must balance commercial imperatives with rigorous oversight of distributors, resellers and aftermarket flows. They must conduct ongoing due diligence and monitoring, not only at the point of sale, but across the lifecycle of the product; and they must be ready to engage regulators transparently if breaches occur, demonstrating a culture of compliance and proactive risk management.
Themis is uniquely positioned to support automotive clients in navigating this environment. We combine deep financial crime expertise with regulatory insight into sanctions and export controls, as well as jurisdictional expertise on key diversion hubs across Europe, Central Asia and the Middle East. This positions us to identify emerging risks before they crystallise and to design controls that are proportionate, credible and effective.
Sanctions and adverse media screening integrated into onboarding and continuous monitoring processes.
Benchmarking of compliance frameworks against UK and EU regulatory expectations.
Tailored training for compliance, sales and aftersales teams, using scenario-based modules drawn from real-world cases.
Enhanced Due Diligence (EDD) on high-risk distributors and intermediaries.
Automotive exporters cannot afford to take a reactive approach to sanctions and export control risk. Enforcement actions are rising; regulatory scrutiny is intensifying; and intermediaries are exploiting weak points in distribution systems with increasing sophistication. Themis helps clients stay ahead of this curve.
Proven expertise in sanctions and export controls helps us anticipate enforcement trends. Our credibility with both authorities and businesses ensures dependable guidance.
Deep knowledge of diversion hubs, supported by robust data and analysis, strengthens risk awareness across complex geographies.
Themis Search delivers scalable, technology-enabled monitoring, enabling efficient oversight of counterparties at every level.
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As your business expands, so does the number of relationships you need to manage. Whether you’re an investment firm, VC, law firm, or a rapidly scaling business, due diligence isn’t just a legal checkbox - it’s your first line of defence against fraud, reputational damage, and regulatory fines.
At Themis, the confidentiality of our clients – and of the individuals and teams involved in our investigations – is paramount. While the following case study is based on a real investigation successfully completed in early 2025.
This case highlights the depth of expertise within the Themis Intelligence team and demonstrates the value of Enhanced Due Diligence (EDD) in uncovering hidden risk, particularly in complex cross-border structures and opaque industries.
