Sanction Wars: The Compliance Strikes Back – UK Sanctions and Legal Risks in the Commercial Space Sector

Article by Sarisha Harikrishna

Background

As the world continues to transition into an era where mere Earthly conquests seem to fade into the background, an influx of attention has been directed towards the rapid developments of space exploration. Ever since Neil Armstrong made history as the first man on the moon, his words, ‘That’s one small step for a man, one giant leap for mankind,’ carry greater importance today. The leap for mankind has been astronomical, affecting the different aspects of human life — biomedical, psychological and social. 

Space exploration is much like a Rubik’s Cube, as it has multiple interdependent sides, evidenced by the fact that the commercial space sector is shaped by the various complexities of technology, regulation and geopolitics. Without a clear strategy for playing the commercial space game right, the United Kingdom, hereinafter addressed as the UK, will fall behind SpaceX and China in conquering the industry. This article explores the intricacies of the UK’s sanction regime, the various challenges posed by dual-use technologies and the legal risks that commercial space enterprises may encounter. 

The UK’s Sanctions Framework

To preserve national security interests, the UK’s implementation of sanctions has become a cornerstone of its foreign policy initiatives. Following Russia’s invasion of Ukraine, the international community, including the UK, have sanctioned various Russian exports in a bid to exert pressure on the country to halt its occupation on Ukrainian grounds. In a 2023 government paper, it was estimated that without the imposition of sanctions, Russia would have sufficient funding to continue its path of destruction for four more years. 

The main legislative framework that governs the UK’s sanctions regime can be found in the Sanctions and Anti-Money Laundering Act 2018 (SAMLA). In February 2025, two years after the initial paper on sanctions, it was further reported that the UK government imposed a further 100 sanctions, with a fraction of them targeting foreign financial institutions financially funding Russia—a first for the UK and a testament to its commitment to international outrage over the war. In this respect, the UK has also imposed sanctions on Russia’s space sector to prevent the export of UK aviation and space-related technology to the country. 

In the commercial space sector context, these sanctions are particularly pivotal in light of the dual-use nature of space technologies. Common technologies in space, such as space launch vehicles, small satellites, satellites as weapon platforms, information technology and active debris removal systems, have been increasingly cautioned against due to the possible weaponisation of outer space. 

Legal Risks in the Commercial Space Sector

The commercial space sector presents a plethora of unique legal risks under the UK’s sanctions regime. The main legal risk encompasses the provision and sale of dual-use goods. The UK’s Export Control Order 2008 provides the relevant framework for such technologies, requiring companies to obtain licences for certain transactions. 

Additionally, the UK has expanded its sanctions framework by targeting companies that inadvertently engage in business transactions with sanctioned entities. Although, at present, minimal literature is available on the far-reaching effects of the sanctions regime in the context of space, it can be hypothesised that the sale of satellites from a UK-based manufacturer to, for instance, a North Korean buyer would warrant legal repercussions under national law. 

Since the commercial space sector often involves major cross-border collaborations, jurisdictional challenges would inevitably arise as companies are forced to navigate the sanctions regimes of multiple countries. For example, a partnership between a US and UK firm on the sale of a satellite project warrants compliance with the requirements from both jurisdictions. The US, being a common law system, would undeniably have differences with civil law countries such as Germany; these differences would have to be reconciled throughout the course of cross-border business transactions. 

Mitigating Legal Risks

To effectively respond to these legal risks, it is important for commercial space companies to adopt compliance programs catered to the ever-changing needs of the sector. For instance, conducting thorough due diligence by monitoring the relationships between both companies can provide clarity on the possibility of sanctions being imposed upon the company.

Moreover, proactive engagement with UK regulators such as the Export Control Joint Unit (ECJU) could provide more transparency into the complex compliance requirements that may arise in the course of business dealings. Expert guidance could reduce the possibility of these companies being embroiled in future violations or controversies. Furthermore, the usage of blockchain technology, which has been hailed as a useful tool in enhancing regulatory compliance, may be a probable solution to this dilemma.

Conclusion

As more and more countries continue to join the race to conquer space, major legal and ethical dilemmas continue to persist, particularly in the commercial space sector, offering a glimpse into the complexities that exist as a result of the innate curiosity of humans. For the commercial space sector to keep up with the various developments of space, it is essential to keep abreast of regulatory developments. The stars are waiting, and the force of compliance is only as strong as those who dare to wield it, a stark reminder that the road ahead is paved with responsibility.