The UK Department for Business and Trade and the Office of Trade Sanctions Implementation published two General Trade Licences, one each for Japan and South Korea, authorising UK persons to continue providing maritime transportation and related services for liquefied natural gas sourced from Russia's Sakhalin-2 project and delivered to those two countries. Both licences run from 1 January 2027 to 31 March 2028, succeed a narrower licence due to expire 1 January 2027, and are restricted to LNG supplied under contracts concluded before 17 June 2025 — no new contracts and no dealing with designated persons are authorised. The carve-out is issued under the Russia (Sanctions) (EU Exit) Regulations 2019, the same instrument under which UK maritime-transport restrictions on Russian LNG otherwise apply from 1 January 2027.

Analyst notesShow

Mechanism

The UK's wider Russia sanctions architecture restricts maritime transport, insurance and related services for Russian-origin LNG, mirroring the EU's LNG phase-out (Regulation (EU) 2026/261). Japan and South Korea remain structurally dependent on Sakhalin-2 LNG while they transition away from Russian energy, so OTSI has run a standing general-licence carve-out for both since at least May 2026 (the prior licence window expiring 1 January 2027). These two publications (one per destination country) extend that carve-out for a further 15 months, to 31 March 2028, rather than letting the restriction bite as scheduled.

Both licences share identical conditions: LNG must originate from the Sakhalin-2 project, be supplied under a contract concluded before 17 June 2025, and the licence does not authorise new contracts or dealings with designated persons. OTSI notification and record-keeping requirements apply to users of the licence.

Downstream implications

Preserves Japanese and South Korean LNG offtake from Sakhalin-2 against

the UK's own maritime-services restrictions through Q1 2028, even as the UK continues to sanction vessels and entities elsewhere in the Russian LNG/shadow-fleet chain.

The identical 1 Jan 2027 start date lines up with the EU's own long-term

LNG contract ban under Regulation (EU) 2026/261 — the UK carve-out buys allied buyers extra runway the EU ban does not grant EU buyers.

A contract-dated cutoff (pre-17 June 2025) caps the carve-out's scope:

it cannot be used to backfill volume lost to the broader ban via new contracts.

Open questions

Why OTSI chose 31 March 2028 specifically — no transition milestone from

Japan or South Korea's own energy-diversification plans was located to anchor that date.

Whether the EU or other G7 members maintain an equivalent Sakhalin-2

carve-out for these two countries, or whether the UK licence is now the only remaining legal route for Sakhalin-2 LNG to reach allied Asian buyers via UK-linked shipping/insurance.

Sources

Primary: DBT/OTSI: General Trade Licence — Maritime Transportation of LNG, Japan · DBT/OTSI: General Trade Licence — Maritime Transportation of LNG, South Korea

Secondary: Yahoo News/Reuters: UK passes new Russia sanctions, but with LNG loophole for Asian allies

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Mechanism

Downstream implications

Preserves Japanese and South Korean LNG offtake from Sakhalin-2 against

the UK's own maritime-services restrictions through Q1 2028, even as the UK continues to sanction vessels and entities elsewhere in the Russian LNG/shadow-fleet chain.

The identical 1 Jan 2027 start date lines up with the EU's own long-term

LNG contract ban under Regulation (EU) 2026/261 — the UK carve-out buys allied buyers extra runway the EU ban does not grant EU buyers.

A contract-dated cutoff (pre-17 June 2025) caps the carve-out's scope:

it cannot be used to backfill volume lost to the broader ban via new contracts.

Open questions

Why OTSI chose 31 March 2028 specifically — no transition milestone from

Japan or South Korea's own energy-diversification plans was located to anchor that date.

Whether the EU or other G7 members maintain an equivalent Sakhalin-2

carve-out for these two countries, or whether the UK licence is now the only remaining legal route for Sakhalin-2 LNG to reach allied Asian buyers via UK-linked shipping/insurance.