First Major UK Luxury-Goods Sanctions Case: Gallery Fights Back and Wins

Skadden, Arps, Slate, Meagher & Flom (via partner Ryan Junck and counsels Vanessa McGoldrick and Jason Williamson) successfully obtained the dismissal of criminal charges against Hauser & Wirth Gallery Limited (the UK subsidiary of the Swiss art gallery) in what is widely reported as one of the first UK prosecutions alleging a breach of trade sanctions under the Russia regime—specifically the luxury goods ban.

The full Law.com "How I Won the Case" interview (published 23 July 2026) and the parallel Law360 piece are paywalled, so their detailed Q&A with the Skadden lawyers is not publicly available. Public reporting from other sources, however, gives a clear picture of the facts, legal issues and outcome.

Key facts of the case

• Defendants: Hauser & Wirth Gallery Limited and the fine-art logistics company Artay Rauchwerger Solomons (ARS).
• Artwork: George Condo's Escape from Humanity (2021), an acrylic/gesso/ink/wax crayon work on paper.
• Buyer: Alexander Popov (Russian national, not himself designated/sanctioned; runs an art foundation with his wife). He was not charged.
• Timeline: Sale agreed in July 2021 (invoice October 2021)—before Russia's full-scale invasion of Ukraine and before the UK luxury-goods restrictions took effect on 14 April 2022. Final payment was made on 27 July 2022. The work was collected from Hauser & Wirth's warehouse by ARS on 26 August 2022 for onward shipment (air waybill named a consignee in Yerevan, Armenia; some documents referred to Moscow). Border Force seized it on 8 September 2022 before it left the UK.
• Charges (brought by the Crown Prosecution Service following an HMRC investigation, with first charging around November 2025): making a luxury good available to a "person connected with Russia" contrary to regulation 46B of the Russia (Sanctions) (EU Exit) Regulations 2019, for periods after the ban came into force.
• Royal connection: Princess Eugenie (a director of the gallery since 2015) was not accused of any wrongdoing.

The legal issues and judgment (Southwark Crown Court, Judge Tony Baumgartner / Baumgardner, 9 July 2026)

The defendants applied to dismiss under Schedule 3 to the Crime and Disorder Act 1998 on the basis that the evidence was insufficient for a properly directed jury to convict. Two main points were contested:

1. Whether the artwork had been "made available”. The defence argued physical delivery never occurred.
1. The judge rejected this, holding that "make available" concerns practical control or the ability to derive benefit, not necessarily physical delivery.
2. By 26 August 2022 at the latest (when the work was released into the custody/control of those acting on Popov's instructions), it had been made available.
2. Whether Popov was a "person connected with Russia" (specifically, "ordinarily resident" in Russia under the relevant definition). This was fatal to the prosecution.
1. The judge accepted Popov had substantial continuing connections (citizenship, property, business/family links) but stressed that the statutory test is ordinary residence, not mere connection, nationality or association.
2. Evidence showed he had taken extensive steps to leave, renting out his Moscow home, moving artworks abroad, securing accommodation in Armenia and Bosnia and Herzegovina, applying for citizenship/taxpayer status elsewhere, and attempting to renounce Russian citizenship.
3. There was insufficient evidence of a continuing pattern of residential life in Russia that could support a finding beyond reasonable doubt of ordinary residence during the relevant period.
3. Result:
1. Charges against both defendants dismissed in their entirety.
2. Hauser & Wirth stated it had strongly contested the proceedings from the outset, denied wrongdoing, and remains fully committed to sanctions compliance.

Broader context

• Earlier UK criminal sanctions cases (e.g., the 2025 convictions of Dmitrii Ovsyannikov and his brother for financial sanctions breaches) were different in nature.
• This appears to have been among the first (or the first) criminal prosecutions specifically under the trade/luxury-goods provisions of the Russia regime.
• A separate 2026 conviction involved a logistics director (Jonathan Hornby) for attempting to export artworks to Russia.
• The judgment highlights practical difficulties for prosecutors (and compliance risks for companies) around proving "ORDINARY RESIDENCE" OR "CONNECTED WITH RUSSIA" status, especially where individuals take steps to relocate after 2022.
• It also clarifies that "make available" can be satisfied by practical control short of physical delivery/export.

Primary public sources  

The detailed strategic commentary from the Skadden team on implications for companies navigating the UK regime is behind the Law.com/Law360 paywalls;

• https://iclg.com/news/crown-court-quashes-russia-luxury-goods-sanctions-prosecution/
• https://ccbjournal.com/news/hauser-wirth-secures-dismissal-of-breach-of-trade-sanctions-charge
• https://www.theartnewspaper.com/2026/07/09/hauser-wirth-cleared-of-russian-sanction-charges
• https://www.independent.co.uk/news/uk/crime/princess-eugenie-russian-sanctions-gallery-b3011848.html
• https://globalsanctions.com/2026/07/uk-crown-court-grants-application-to-dismiss-charges-against-london-art-gallery-for-making-art-available-to-person-connected-with-russia/
• Law.com paywalled original: https://www.law.com/international-edition/2026/07/23/how-i-won-the-case-skadden-on-defeating-one-of-the-uks-first-russia-sanctions-prosecutions/
• Law360 paywalled counterpart: https://www.law360.com/articles/2503678/how-skadden-beat-hmrc-s-first-sanctions-export-ban-case

The above is limited to what is publicly reported and verifiable. If you have access to the full interview or further specific questions (e.g., on the regulations themselves), more targeted analysis is possible.