Hauser & Wirth’s possible Luxury Goods Ban breach highlights the significance of the phrase “connected with Russia” in UK law

November 24, 2025

by Susan J Mumford, CEO

The widely reported accusation that Hauser & Wirth is in breach of The Russia (Sanctions) (EU Exit) (Amendment) (No. 8) Regulations 2022)*, i.e., ‘Luxury Goods Ban’ is said to be the first court case under this law. This highlights the importance of UK-based Art Market Participants (AMPs) understanding the full meaning of “connected with Russia” (incl. Belarus), as it is not limited to the end destination of art.

Looking beyond the destination of art (for AMPs in the UK):

At first glance, this law that took effect on 14th April 2022 appears to be consistent with similarly named laws in the EU, U.S. and Switzerland, in that it’s a criminal offence to sell art if its end destination is Russia. This is provided that an object exceeds the low value thresholds set by each jurisdiction as applicable, for example £250. At a second glance, however, it becomes clear that UK law goes further in specifying that “a person must not directly or indirectly… make luxury goods available to a person connected with Russia”.

Connected with Russia?

It is this phrase above that jumps out from a statement made by a Hauser & Wirth spokesperson, as reported by The Times, The Art Newspaper and Artnet News (see links below):

“Our UK gallery has been charged with one instance of making an item of artwork available to a non-sanctioned person connected with Russia.”

The first part of the statement is seemingly cut and dry in that the legal ‘person’ involved is indeed not sanctioned: The buyer is the Popov Art Foundation, which is run by Alexander and Evgeniya Popov. None of those three legal entities, i.e., foundation nor individuals, are financially sanctioned.

It is the final part of the statement that seemingly explains why HMRC launched the original investigation that has ended up in English courts: Our understanding is that the (legal) “person” (i.e., foundation) has been deemed to be connected with Russia.

Defining “connected with Russia” in the law:

The phrase “connected with Russia” (incl. Belarus) is defined in Statutory Guidance on the Russian sanctions**:

“Regulation 21 sets out when a person is to be regarded as “connected with” Russia as:

an individual who is, or an association or combination of individuals who are, ordinarily resident in Russia
an individual who is, or an association or combination of individuals who are, located in Russia
a person, other than an individual, which is incorporated or constituted under the law of Russia, or
a person, other than an individual, which is domiciled in Russia”

The first two points above refer to individuals (not businesses). The term “ordinarily resident” is defined in Regulation 21: “For the purposes of these Regulations, a person is ‘ordinarily resident’ in a country if that person has been present in that country, or in that and one or more other countries, for a time period amounting in aggregate to at least 180 days in any period of 365 days.”

The second two points refer to businesses (not individuals). Distinct from the point about incorporation or or constituted under Russian law, the term “domiciled” refers to where the entity is managed and controlled, thereby capturing foreign-incorporated companies that operate from Russia.

What’s the outlook for Hauser & Wirth?

Clearly, being “connected with Russia” has a specific meaning. The big question for Hauser & Wirth leading up to the 16th December 2025 court hearing is this: Was the Popov Art Foundation’s set-up at the time of the 2022 transaction connected with Russia, and thereby in breach of the Luxury Goods Ban? Only time will tell.

In conclusion:

For UK Art Market Participants, this case highlights that with the Luxury Goods Ban, it is not sufficient to only ascertain the destination of art. You also need to determine: For a private individual: Are they present in Russia at least 180 days out of any 365 day period? For a business: Determine where it is incorporated and located, as well as where management activities take place.

As always, take a documented, risk-based approach. Document your research and risk assessment – and act accordingly. If there is an attempted breach of financial sanctions, regardless of a transaction taking place, UK AMPs have an obligation to 1) not proceed with the transaction; and 2) report to the Office for Financial Sanctions Implementation (OFSI) and the National Crime Agency (NCA) – being sure to not “tip off” your customer that you’re doing so.

If you’re uncertain about a situation, reach out to our. team. The “connected with Russia” (incl. Belarus) aspect of the law is what most frequently throws art businesses while also presenting the biggest risk of breaching the Luxury Goods Ban.

Note: Belarus, as a close ally of Russia, is also caught under Sanctions. As a general principle, the above points can be applied for Belarus, and be sure to refer to the legislation linked below for more information.