Cutting ties with Russian and Belarusian suppliers: why the hard part is your own contract data
Read PPN 007 closely and you notice something that surprises people: it does not order anyone to terminate anything. It asks contracting authorities to look, to assess, to document and then to decide. That discretion is deliberate, and it is also where most of the difficulty sits. A policy that turns on judgement demands evidence, and evidence demands data about your own contract portfolio that a lot of organisations simply do not hold in a usable form.
Discretion is harder than a mandate
If the PPN had said terminate every contract with a Russian or Belarusian prime contractor, implementation would have been unpleasant but simple. Instead it sets preconditions: suitable termination provisions, an assessment of criticality and alternative supply, and an assessment of financial implications that have been mitigated. Each of those is a defensible judgement that has to be made contract by contract.
The guidance goes further and gives example risk methodologies running from low, where termination has no measurable impact, to very high, where termination would pose a risk to life or public wellbeing or would cost more than the remaining payments under the contract. That scale is useful precisely because it forces the conversation out of the abstract. Once you have to place a contract on it, you have to know what the contract does and what replacing it would cost.
The result is that the real deliverable of PPN 007 is not a set of terminations. It is a documented, approved set of decisions, including the decisions to do nothing, that will stand up when someone asks about them later.
What most organisations get wrong
The first mistake is treating ownership as a nationality question. The PPN's definition reaches an entity registered in the UK, or with substantive UK business operations, that is controlled from Russia or Belarus, including through Persons of Significant Control holding more than 25 per cent of shares or voting rights, or the power to appoint or remove the majority of the board. A UK company number tells you almost nothing on its own.
The second is over-reaching in new procurements. It is tempting to read the PPN as permission to screen out anything with a Russian or Belarusian connection. It is not. Where the supplier, or a supply chain member relied on to deliver, is a UK supplier or a treaty state supplier, automatic exclusion is off the table because the non-discrimination provisions of the Procurement Act 2023 apply. Complex group structures need legal advice, not a rule of thumb.
The third is scope creep. Nothing in the PPN requires full supply chain mapping, and there is no requirement at this stage to make prime contractors terminate subcontracts. Teams that launch a total mapping exercise burn resource that would be better spent on the handful of contracts with genuine impact and influence.
The fourth is silence in the record. An organisation that reviewed its portfolio, decided nothing needed to change and wrote none of it down has done the work and cannot prove it. The guidance asks for exactly the opposite: clear documentation of all decision making, with an audit trail, whether or not the outcome was termination.
What to do instead
Start from the portfolio, not the policy. Pull the contracts that are large, long, critical or in exposed categories, and check ownership on those first. The PPN explicitly endorses a proportionate, risk-based approach and points at the contracts with the most impact and influence.
Treat energy as a special case. The guidance says public sector exposure is primarily in energy markets, and requires expert or buying-organisation advice before terminating an energy supply contract. The FAQ document that accompanies the PPN gives the reason plainly: terminate a cheap fixed-price contract in a high-price market and you can hand the supplier a better deal while paying more yourself.
Build the governance path before you need it. Know who signs off in your organisation, whether that is the Commercial Director and accounting officer or the most senior commercial professional and the S151 Officer, and know when HM Treasury consent applies. Approvals sought late in a termination timetable are approvals sought badly.
Then keep the register current. The value of the 2022 review decays every time a supplier is acquired or a parent company changes hands. The organisations that will find the next update of this PPN straightforward are the ones treating supplier ownership as a live data field rather than a one-off project output.
The takeaways
- PPN 007 asks for judgement and documentation, not blanket termination.
- Ownership and control, not the country of registration, decide whether a supplier is in scope.
- UK and treaty state suppliers cannot be automatically excluded from new procurements.
- Energy contracts need expert advice before any termination decision.
- The audit trail is the deliverable, including for the decisions to leave contracts in place.
Want the full breakdown?
The complete explainer covers the key facts, the requirements in detail and a practical action list, free and printable in the Procurement Library.