UK, EU and US sanctions on Russia

UK, EU and US Sanctions on Russia and Belarus update as of 21 November 2023

With the rapid expansion of UK, EU and US sanctions on Russia and Belarus in recent weeks - and with more in the regulatory pipeline - we set out:

1. What's New (to 21 November)
2. A 5-step checklist for assessing how your activities may be affected
3. A Sanctions Summary

 

1. WHAT’S NEW

Russia

• President Putin has implemented a presidential decree limiting the circulation of foreign securities, including setting a cap on the value of foreign securities that an individual can own at 100,000 roubles.

UK

• On 17 November 2023, the FCDO and OFSI published new guidance on Ownership and Control: Public Officials and Control. This follows the UK Court of Appeal judgment on 6 October 2023 in Bank Otkritie v Mints which created uncertainty over whether sanctioned public officials should be considered to control public and private Russian entities. Following the Mints judgment, OFSI and FCDO issued a response on 16 October 2023  including that:
  • “FCDO would look to designate a public body where possible when designating a public official if FCDO considered that the relevant official was exercising control over the public body."
  • "There is no presumption on the part of the Government that a private entity based in or incorporated in Russia or any jurisdiction in which a public official is designated is in itself sufficient evidence to demonstrate that the relevant official exercises control over that entity."
• The latest guidance repeats these points and in particular also makes clear that:
  • “the policy intention of the UK government’s approach to ownership and control in UK sanctions regulations is to ensure that sanctions cannot be easily circumvented”;
  • “the UK government does not consider that President Putin exercises indirect or de facto control over all entities in the Russian economy merely by virtue of his occupation of the Russian Presidency”;
  • the FCDO “does not generally consider designated public officials to exercise control over a public body in which they hold a leadership function”. On this basis, the FCDO “does not intend for sanctions measures targeting public officials to prohibit routine transactions with public bodies, including (but not limited to): taxes, fees, import duties, the purchase or receipt of permits, licences or public utility services, or any other ordinary and incidental payments”;
  • but “if there was sufficient evidence to demonstrate that the designated individual exercises control over the public body … then the relevant legal test under UK sanctions regulations may be met”, for example “whether the designated person derives a significant personal benefit from payments to the public body, such that they amount to payments to that person rather than the public body”; and
  • OFSI expects companies to undertake risk-based due diligence. “OFSI does not prescribe the level or type of due diligence that should be undertaken to ensure compliance with financial sanctions. OFSI recognises that there is no one-size fits all approach”, as already made clear in its Enforcement and Monetary Penalties guidance.
• Related to these issues, on 15 November 2023, a High Court judgment in Litasco SA v Der Mond Oil and Gas Africa included comments by the judge that there was no arguable case that President Putin controls Litasco (a Swiss oil trading company owned by Lukoil PJSC, a Russian oil company) because:
  • ownership and control is “concerned with an existing influence of a designated person over relevant affairs of the company, not a state of affairs which a designated person is in a position to bring about”; and
  • were it otherwise, "it would follow that President Putin was arguably in control… of companies of whose existence he was wholly ignorant, and whose affairs were conducted on a routine basis without any thought of him".
• Speaking at a webinar on 20 November 2023, OFSI and FCDO officials emphasised their expectation that companies should undertake risk-based due diligence of ownership and control issues. They declined to prescribe more precisely what is required, stressing that this had to be judged on a case-by-case basis. They did not respond to calls for legislative revisions to provide greater legal certainty or to publish statements on whether specific entities are considered to be controlled by designated persons.
• On 15 November 2023, OFSI and OFAC published a joint blog post marking a year since they launched their Enhanced Partnership to deepen their collaboration.
• On 13 November 2023, OFSI amended General Licence INT/2022/1552576 - London Court of International Arbitration (LCIA) Arbitration Costs. The amendment removes the Annex 1 schedule of arbitration costs and changes the definition of arbitration costs to reflect the relevant Schedule of Costs for LCIA arbitration.
• On 10 November 2023, the UK amended General Licence INT/2022/1839676 in relation to Russian Travel. The General Licence was amended to make clear that it can only be used for the purchase of tickets from a Designated Person (DP) for the purpose of passenger air or passenger rail journeys originating in, or within, Russia.
• On 9 November 2023, the UK delisted Sergey Stognienko from its Russia sanctions list. Mr Stognienko had been designated since September 2022 for being a member of the Bank Otkritie management board.
• On 8 November 2023, the UK announced sanctions targeting 29 individuals and entities operating in and supporting Russia's gold, oil and strategic sectors. Those sanctioned include UK-based Nord Gold plc and international networks propping up Russia’s gold, oil and finance industries. In tandem, the National Crime Agency also issued a Red Alert that Russia is using gold as a means to undermine the UK sanctions regime and provided guidance on preventing sanctions circumvention.
• On 6 November 2023, the Financial Times reported that over 127 companies had voluntarily disclosed sanctions violations to the UK government as of 17 May 2023, in response to a freedom of information request. This follows the comments by the director of OFSI on 9 October 2023 that companies “seeking to do the right thing” with “appropriate due diligence” should not expect harsh penalties if they voluntarily report sanctions breaches (discussed in our last blog post).

EU

• On 15 November 2023, it was announced that draft proposals for a 12th package of EU sanctions on Russia have been submitted to the Council (EU Member States) proposing:
  • Sanctions on over 120 additional individuals and entities, including actors from the Russian military, defence and IT sectors, as well as other important economic operators, including targeting those who orchestrated the recent illegal so-called “elections” in the territories of Ukraine that Russia has temporarily occupied, those responsible for the forced “re-education” of Ukrainian children and actors spreading disinformation and propaganda in support of Russia’s war against Ukraine;
  • New import and export bans, as well as actions to tighten the oil price cap and to counter circumvention of EU sanctions; and
  • Reinforcing the sanctions framework overall.
• More specifically, media reports (Bloomberg on 31 October, Politico on 15 November, The Independent on 16 November) indicate that the proposals include:
  • An import ban on Russian diamonds, to apply from January 2024 and the implementation from March 2024 of a G7 traceability mechanism that would prevent imports of Russian gems processed in third countries;
  • Tougher reporting requirements, including for attestations to include itemised ancillary costs such as insurance and freight, to prevent Russian oil bought in violation of existing sanctions from being sold on with falsified receipts. (A G7+ imposed price cap of $60 per barrel came into force in December 2022, but reportedly Russian crude oil is now increasingly being traded well above that level, closer to $80). There would also be sanctions on “shadow fleet” vessels transporting Russian oil purchased above the price cap and mandatory contractual clauses to ban oil shipments above the price cap;
  • Import bans on Russian processed pig iron, copper, aluminium wires and foil, construction items, transportation-related goods and liquefied propane (LPG);
  • Expanded export restrictions on additional dual-use technologies; welding machines; certain chemicals; and software for managing companies and for industrial design and production;
  • Prohibiting the repatriation of Russian assets blocked in the EU and restricting Russian nationals’ involvement in sensitive sectors; and
  • Sanctions enforcement measures including adding goods to the ban on transit through Russia and sanctions on additional non-EU companies that violate export restrictions.
• EU ambassadors discussed the package for the first time on 17 November 2023 with the aim of adopting it before the European Council in mid-December or by the end of the year at the latest.
• On 15 November 2023, it was reported that the Cyprus government has promised a “zero-tolerance” approach to sanctions violations in response to a report suggesting that Russian businessmen transferred millions of euros worth of assets in breach of EU sanctions allegedly managed by Cypriot accountants and corporate service providers. The Cyprus Finance Ministry has said that it is conducting a criminal investigation and is receiving technical support from the UK to create a sanctions implementation unit.
• On 9 November 2023, the European Parliament adopted a resolution to voice its alarm over loopholes in the EU’s sanctions regime against Russia. While highlighting the unprecedented nature of the EU’s restrictive measures, MEPs voiced concern about the lack of enforcement and attempts to undermine the effort to strategically weaken the Russian economic and industrial base, hindering the country’s ability to wage war.
• On 8 November 2023, the General Court of the EU rejected the application for de-listing from Bremino-Grupp and two of its co-owners, Alexander Zaytsev and Mikalai Varabei. In relation to their listings:
  • Bremino-Grupp was listed for receiving state aid to develop the Bremino-Orsha zone and for receiving financial, tax, and other benefits from the regime.
  • Mr Zaytsev was listed for being a Belarus businessman, co-owner of Bremino-Grupp, owner of the Sohra Group and Viktor Lukashenko’s former aide.
  • Mr Varabei was listed for being a leading businessman operating in Belarus as co-owner of Bremino-Grupp.
• On 8 November 2023, the General Court of the EU rejected an application from Dimitry Mazepin for the annulment of his sanctions designation. Mr Mazepin has been listed since 9 March 2022. The court concluded that there was sufficient evidence that Mr Mazepin is a leading businessperson involved in a sector providing a substantial source of revenue to the Russian Government and was supporting actions or policies which undermine the sovereignty of Ukraine.

US

• On 7 November 2023, the US Bureau of Industry and Security issued a Temporary Denial Order against 7 individuals and 3 companies alleged to be part of a sophisticated global procurement scheme that unlawfully sourced and purchased millions of dollars in dual-use electronics for end-users in Russia, including companies affiliated with the Russian military. Three of the individuals were arrested on 31 October 2023 pursuant to a criminal indictment.
• On 2 November 2023, the New York State Department of Financial Services imposed a $1.25 million penalty against Payoneer Inc, a New York-based provider of online money transfer and digital payment services. The penalty is in relation to findings that Payoneer had processed a payment to a bank in the Crimea region of Ukraine, which is prohibited under US sanctions.
• On 2 November 2023, the US imposed sanctions on over 100 individuals and entities in connection with Russia’s war against Ukraine. The sanctions imposed by the Department of State target those engaged in sanctions evasion and Russia’s future energy capabilities. Sanctions imposed by the Department of the Treasury target key manufacturing and other firms supporting Russia’s industrial base, as well as Russian financial institutions.

 

2. YOUR 5-STEP CHECKLIST

1. Which countries’ sanctions apply to your activities?

The UK, EU, US and other countries’ sanctions typically must be observed if there is a sufficient nexus to confer jurisdiction, that is if:

• their nationals (individuals) are involved, wherever they are in the world (in the case of US sanctions, this includes US permanent residents/Green Card holders);
• any part of a transaction is conducted within their territory or airspace; and
• legal entities incorporated or constituted under their law, including foreign branches are involved; or
• with respect to US sanctions, if a transaction is conducted in US dollars or clears through the US financial system, or data is routed through servers in the US, or other back office support or facilitation is provided by US persons (including service requests to an equipment supplier).

UK sanctions may also apply to non-UK persons outside the UK if there is a sufficient nexus.  This will depend on the facts of each case but could include:

• transactions using clearing services in the UK;
• actions by a local subsidiary of a UK company;
• actions directed from within the UK; and/or
• financial products or insurance bought on UK markets but held or used overseas.

Additionally, US ‘secondary sanctions’ may be applied to non-US persons outside the US in the absence of any US nexus if a transaction involves sanctionable conduct that would be prohibited to a US person and that is determined by the US authorities to be a ‘significant’ transaction or otherwise provides material support to a sanctioned party.  Whether a transaction is ‘significant’ is based on a number of open-ended criteria e.g. the size, number and frequency of transactions.

Further, US export control restrictions may apply even if sanctions do not.  For example, US export controls will apply if US-origin goods, software or technology located in a third country are re-exported, regardless of whether a U.S. person is involved in the transaction. 

2. Are any of your business partners subject to an asset freeze?

The UK, EU, US and others have imposed asset freezes (‘blocking sanctions’ in US terms) on most Russian banks and strategic industries (e.g. defence, transport, research, media and aerospace), and senior individuals in the Russian government, state-owned corporations and major businesses, including family members, and they are continuing to add new names to their national lists of such ‘designated persons’.

An asset freeze generally requires those within the scope of the national sanctions, as described at step 1 (above), to:

• freeze any assets of the designated parties that they may hold and to report these to their authorities;
• not make any funds or economic resources available to them, directly, indirectly or for their benefit;

In addition, US restrictions go further and in effect also prohibit all transactions with the designated (i.e. listed) party.

The same restrictions also apply to any non-designated entity that is:

• ‘owned’ by a designated party or parties. The US threshold is 50% or more, while the UK and EU thresholds are ‘more than 50%’. The US and the EU (in guidance) consider the criterion met if the aggregated ownership of two or more designated parties exceeds the threshold. The UK (also in guidance) recognises aggregated ownership only if there is evidence of a joint arrangement between two or more designated parties; or
• (in the UK/EU, not the US) ‘controlled’ by a designated entity (i.e. able to ensure the affairs of the undesignated entity are conducted in accordance with their wishes, for example through controlling a majority of voting shares or having the right to appoint or remove a majority of the board of directors).

It is often challenging to reach a definitive view of whether this ‘control’ criterion is applicable, for example if a majority shareholder becomes sanctioned and passes some of their shares to unsanctioned family members or to business associates. If you would like assistance on these issues, do get in touch. 

If you do business with Russia or Belarus, you should screen your business partners - banks, suppliers, customers, distributors – against the applicable national sanctions lists and, given the current rapid pace of developments, set up alerts for new designations, in order to be able to identify any relevant new sanctions measures without delay. In some instances, the measures include exceptions or general licences that provide for a wind-down period, but others may have immediate effect. Note that asset freezes on Russian banks may prevent you from receiving or making payments to business partners or to employees.

It should also be noted that, while there are many similarities between the respective national lists, there are also significant differences. For example, a Russian company might be subject to EU sanctions but not to UK or US sanctions. In such cases, it may be possible for UK persons to do business with the Russian company provided that there is no EU nexus (as described in step 1 above), including that any EU nationals are recused.

3. Are any of your activities affected by other financial sanctions?

Short of an asset freeze, sanctions measures may restrict or prohibit:

• granting new loans or credit (including payment terms);
• sanctioned banks from clearing payments in certain currencies;
• dealing in transferable securities and money market instruments issued by sanctioned parties;
• the size of bank deposits by nationals of sanctioned countries;
• the access of sanctioned banks to the SWIFT messaging systems; transactions with the Russian Central Bank and certain State-owned enterprises;
• new investment or acquisitions and the provision of investment services.

The screening of your business partners, including banks, should check for the application of any of these restrictions. However, note that there may be exceptions, grounds for licensing and/or wind-down periods.

4. Are your products or services restricted?

 Trade sanctions may restrict or prohibit:

• the sale, supply, transfer or export to Russia/Belarus, directly or indirectly, of certain goods and technology beyond those that are normally subject to export controls. This generally includes related financial services, brokering and technical assistance (e.g. repair, maintenance). The restrictions may be focused on only certain designated entities. There may be exceptions, grounds for licensing and/or wind-down periods;
• the import, purchase, transport or insurance of certain goods or technology from, or originating in, Russia/Belarus – notably including oil - with similar related provisions as those for exports;
• accounting, tax consulting, business and management consulting, public relations, architectural, engineering, IT consultancy, legal advisory and trusts services;
• closure or airspace and ports to aircraft and ships;
• more wide-ranging embargoes on most finance and trade with certain regions (previously Crimea, now extended to the occupied areas of Donetsk and Luhansk).

5. Do you have the right measures in place to mitigate your risks?

Given the evolving and expanding scope of sanctions, have you audited your compliance programmes and contractual commitments to make sure you are mitigating any risks?  For example, have you:

• Updated your compliance policies and procedures, ensuring they are proportionate and workable?
• Reviewed your technology infrastructure to support your day-to-day compliance (e.g. with on-boarding clients and service providers or providing IP/geolocation support for your KYC process)?
• Tailored and updated your training for your compliance leads and others across your business?
• Reviewed whether your contracts enable you (or the counterparty) to suspend or terminate it without liability or serious risk of challenge, whether through a specific sanctions provision or other clauses such as the material adverse change clause?

 

3. YOUR SANCTIONS SUMMARY

We set out below a high-level overview of the current UK, EU and US sanctions in addition to asset freezes (as set out above).

Please note that exceptions, grounds for licensing and wind-down periods often apply to specific sanctions; if you would like an analysis as to the legality of a particular transaction, trade or matter, do get in touch. 

UNITED KINGDOM

The UK has announced its intention to introduce certain new sanctions measures which it has not yet implemented, including:

• A ban on the import of all Russian diamonds and all imports of Russian-origin copper, aluminium, and nickel;
• Restrictions to cut off wealthy Russians’ access to UK banks including a £50,000 limit on bank accounts; and
• The suspension of the process by which actions taken to manage the orderly failure of Russian banks are recognised under the laws of the UK, in cases where the bank is a sanctioned entity.

 Financial services:

• A ban on dealing with transferable securities and money market instruments or issuing new loans or credit with a maturity exceeding 30 days to:
  • where issued since 2014, an entity listed in Schedule 2 (including Sberbank, VTB Bank, Gazprombank, VEB, Rosneft, Transneft and Gazprom Neft) or their non-UK subsidiaries;
  • where issued since 1 March 2022, UK subsidiaries of Schedule 2 entities; a “person connected with Russia” (an individual located in or ordinarily resident in Russia, or an entity domiciled, incorporated or constituted under the law of Russia); an entity owned by or acting on behalf/at the direction of such as person; or the Government of Russia;
  • where issued on or after 16 December 2022,  by a person not connected with Russia where the purpose of the loan or credit is to make a new investment in Russia;
• A ban on UK credit or financial institutions establishing or continuing a correspondent banking relationship with, or processing sterling payments to from or via, a designated person;
• A ban on financial services for foreign exchange reserve and asset management to the Central Bank of the Russian Federation, the Russian National Wealth Fund and the Ministry of Finance, and persons owned or controlled directly or indirectly by them or acting on their behalf or direction;
• A ban on new investment, specifically the:
  • direct acquisition of any ownership interest in Russian land and entities connected with Russia;
  • indirect acquisition of any ownership interest in Russian land and entities connected with Russia for the purpose of making funds or economic resources available to, or for the benefit of, persons connected with Russia;
  • direct or indirect acquisition of any ownership interest in entities with a place of business in Russia (which are not persons connected with Russia) for the purpose of making funds or economic resources available (directly or indirectly) to, or for the benefit of, persons connected with Russia;
  • establishment of joint ventures with a person connected with Russia;
  • opening of representative offices and establishing branches and subsidiaries in Russia; and
  • provision of investment services directly related to the above; and
• Selected Russian banks removed from the SWIFT messaging system.

Trade:

Exports

• A ban on the export, supply and delivery, and making available of the following goods and technology, and related services, to Russia:
  • military and internal repression items;
  • advanced technology items: dual-use, ‘critical industry’, special materials, quantum computing, aviation, maritime and space;
  • a wide range of items mainly for the manufacturing sector and luxury items;
  • infrastructure-related, energy-related and oil refining items, and jet fuel;
  • sterling or EU denominated banknotes; and
  • the supply and delivery of certain revenue generating goods from Russia to third countries, except those with important humanitarian or civilian use such as certain agricultural and energy-related goods.

Imports

• A ban on the import or acquisition of the following goods and technology consigned from or originating in Russia, as well as related services:
  • oil and oil products, LNG, and coal and coal products;
  • iron and steel items, including of Russian iron and steel goods that have been processed in third countries;
  • a range of materials and manufactured items generating revenue for Russia;
  • gold and gold jewellery; and
  • a 35% tariff on imports of certain goods originating in Russia and Belarus.

Services

• A ban on the provision of the following services:
  • maritime transport, insurance and other financial services for ships carrying Russian crude oil/refined oil products to or between third countries, unless the crude oil/refined oil products has been sold below a specific price cap;
  • trust services, accounting, business and management consulting, public relations, advertising, architectural, auditing, engineering and IT consultancy and design services to persons connected with Russia;
  • legal advisory services to any person who is not a UK person in relation to any activity which would, if carried out by a UK person or in the UK, contravene UK sanctions on Russia, except legal representation, compliance with UK statutory obligations andwhether an act complies with UK sanctions.  A General Trade Licence authorises certain such services;
  • social media, internet services and app stores are required to block content from RT and Sputnik; and
  • a ban on all Russia-owned or operated aircraft and ships from UK airspace, landings, and ports, and on aviation and shipping technical assistance to, or for the benefit of, designated people/entities.

Crimea, Donetsk and Luhansk

• A ban on:
  • finance and investment;
  • the export, supply and delivery, and making available of the following goods and technology, and related services: military, infrastructure-related goods and tourism services;
  • all imports.

Belarus

• Restrictions on dealing with transferable securities or money-market instruments;
• A ban on providing insurance and re-insurance to the Belarusian Government and Belarusian public bodies and agencies;
• A ban on the export, supply and delivery, and making available of the following goods and technology, and related services, to Belarus:  military and internal repression; dual-use, critical industry,  quantum computing, advanced materials, certain minerals, oil refining items, luxury goods, banknotes, materials that could be used to produce chemical and biological weapons, and machinery-related goods;
• A ban on the import or acquisition of the following goods and technology consigned from or originating in Belarus, as well as related services: oil products, iron, steel, potash, tobacco, gold, processed gold, gold jewellery, cement, rubber and wood;
• Ban on Belarusian and other specified ships from entering UK ports, and aircraft from UK airports; and
• An obligation (subject to criminal penalties and enforced by OFCOM) on social media services, internet access services and application stores to take reasonable steps to prevent users from accessing online content generated by designated persons.

EUROPEAN UNION

Financial services:

• Banking:
  • A ban on the provision of SWIFT services to most Russian banks;
  • A ban on transactions with Russia's central bank;
  • A ban on deposits from Russian nationals or legal persons if the total value exceeds 100,000 EUR;
  • A ban on the provision of crypto-asset wallet, account or custody services to Russian persons and residents; and
  • A ban on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states.
• Investment:
  • A ban on investment, participation or contribution to projects co-financed by the Russian Direct Investment Fund;
  • Since 18 March 2023, the Russian Regional Development Bank has been subject to a full transactional ban for contracts concluded before 17 December 2022;
  • A ban on providing credit rating services, or access to any subscription services in relation to credit rating activities, to any Russian person, resident, entity or body;
  • A ban on new investments in the Russian energy and mining sectors (except certain metals);
  • A ban on dealing in transferable securities (including crypto-assets), or money-market instruments of any maturity, issued by certain listed Russian entities and on new loans and/or credit to them;
  • A ban on the listing and provision of services in relation to shares of Russian state-owned entities on EU trading venues;
  • A ban on EU central securities depositories services for transferable securities issued after 12 April 2022 to any Russian persons;
  • The Russian Maritime Register of Shipping has been added to the list of state-owned enterprises subject to financial restrictions;
  • The exclusion of all financial support to Russian public bodies;

Trade:

Exports

• A ban on the export, supply and delivery, and making available of the following goods and technology, and related services, to Russia:
  • military, internal repression, dual-use and advanced technologies including quantum computers, high-end electronics, software, sensitive machinery and transportation;
  • energy industry (except nuclear and energy transport), oil refining, coal and coking coal;
  • aviation, jet fuel and space;
  • luxury goods;
  • maritime navigation; and
  • items which may contribute to Russia’s military, industrial and technological enhancement including coal, certain electronic components, certain machinery components, chemicals and torture goods.
• The EU's 11th package of sanctions also extended the prohibition for certain sensitive goods (such as advanced technology and aviation-related materials) exported from the EU to third countries, via Russia (intended to address the risks of such goods being diverted while passing through Russia).

Imports

• A ban on the import or acquisition of the following goods and technology consigned from or originating in Russia (as well as related services):
  • oil and refined products. Direct imports of crude oil by pipeline are permitted for the time being but such oil, and products refined from it, may not be transferred to other Member States or third countries. There is an exception for seaborne products that transit Russia but originate in a third country and are owned by non-Russians;
  • coal and other solid fossil fuels;
  • products including: wood, cement, fertilisers, seafood, liquor, iron and steel (including products processed in third countries using iron and steel from Russia), machinery and appliances, wood pulp and paper, cigarettes, plastics, vehicles, textiles, footwear, leather, ceramics, certain machinery components, certain chemical products, cosmetics and elements used in the jewellery industry; bitumen and related materials like asphalt; and synthetic rubber and carbon blacks;
  • Russia-origin gold (including jewellery) if it has been exported from Russia into the EU or to any third country; and
  • A ban on the participation of Russian companies in public procurement in member states.

Services

• A ban on the provision of the following services:
  • Maritime transport and insurance to ships carrying Russian crude and petroleum crude oil/ refined oil products to third countries, with an exemption for the provision of insurance where the crude oil/ refined oil products has been sold below a specific price cap;
  • listed Russian state-owned broadcasters broadcasting in the EU, and advertising products or services in any content broadcast by these entities;
  • provision of architectural and engineering services, IT consultancy services, legal advisory services, accounting, auditing, bookkeeping or tax consulting services, business and management consulting, public relations, advertising, market research and public opinion polling services, as well as product testing and technical inspection services to the Government of Russia, or entities established in Russia;
  • all transactions with certain state-owned companies including the Russian Maritime Shipping Register; and
• A ban on EU nationals holding any posts on the governing bodies of any Russian state-owned or controlled legal persons, entities or bodies.

Donetsk, Luhansk, Zaporizhzhia and Kherson

• With respect to the occupied areas of the oblasts:
  • an import ban on all goods and related services;
  • restrictions on trade and investment related to certain economic sectors;
  • a prohibition on supplying tourism services; and
  • an export ban on goods and technology suited to the transport, telecommunications, energy or oil, gas and mineral sectors; and a ban on the provision of technical assistance, brokering, construction or engineering services to infrastructure in the regions and within the aforementioned sectors.

Access

• The closure of  EU airspace to all Russian-owned, Russian registered or Russian-controlled aircraft;
• A prohibition on providing access to vessels registered under the flag of Russia, Russian-operated vessels or vessels suspected of circumventing EU oil sanctions to EU ports; and
• A ban on any Russian transportation of goods by road within the EU.

Belarus

• A ban on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states, or to any natural or legal person, entity or body in Belarus;
• A ban on transactions with the Central Bank of Belarus related to the management of reserves or assets;
• A block on SWIFT services to Belinvestbank, Belagroprombank, Bank Dabrabyt, the Development Bank of the Republic of Belarus, as well as their Belarusian subsidiaries;
• Financial and air-traffic sanctions;
• A ban on the listing of, and provision of services in relation to, shares of Belarus state-owned entities on EU trading venues;
• A €100,000 cap on deposits from Belarusian nationals, residents, or entities established in Belarus;
• A ban on the sale of euro-denominated transferable securities issued after 12 April 2022 to Belarusian nationals, residents, or entities established in Belarus;
• A ban on the provision of services by EU central securities depositories to Belarusian nationals, residents, or entities established in Belarus;
• A ban on any Belarusian transportation of goods by road within the EU;
• A ban on the sale, supply, transfer or export, directly or indirectly, to or for use in Belarus and related services of the following goods and technology: military and internal repression, goods and technology suited for use in aviation and the space industry including aircraft engines and drones, firearms and their parts, essential components and ammunition, dual-use and technology and a range of materials, manufactured goods and machinery; and
• An expansion of existing bans on imports from Belarus into the EU of goods for the following products and related services: tobacco, minerals, wood, cement, iron and steel, rubber, and potash.

UNITED STATES

Financial services:

• A ban on all transactions involving the Central Bank of the Russian Federation; the National Wealth Fund of the Russian Federation; and the Ministry of Finance of the Russian Federation, and dealing in bonds issued by them after 1 March 2022;
• A ban on dealing in new debt of over 14 days maturity and new equity of strategic entities: Sberbank, AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways;
• Selected Russian banks removed from the SWIFT messaging system;
• All forms of new investment in Russia, including the formation of joint ventures and all loans for commercial purposes to persons located in Russia;
• The export, re-export, sale or supply of USD denominated banknotes to the Russian government or any person located in Russia.

Trade:

Exports

• A ban on the export, supply and delivery, and making available of the following goods and technology, and related services, to Russia:
  • military and dual-use items, and a wide range of advanced technologies, encryption products and software including updates;
  • a wide range of items,  including all of Chapters 84, 85 and 90 of the US HTS (tariff codes), which could contribute to the enhancement of Russian industrial capacities including virtually every kind of machine, engine, electronics device, industrial process equipment, and test/inspection/instrumentation tooling, as well as  goods vehicles, and equipment for refrigeration, elevators, construction, printing, textiles, valves, bearings, seals, electrical, radio, railways and testing; and luxury goods;
• The expansion of controls on US-origin and foreign-made (non-US) items and direct products of US technology for listed Russian military end use/r and military-intelligence end use/r;
• A ban on the provision, exportation, or re-exportation, directly or indirectly, of goods, services or technology in support of exploration or production for deepwater, Arctic offshore, or shale projects; and
• The suspension of general licences issued by the Nuclear Regulatory Commission for the export of source material, special nuclear material, by-product material and deuterium to Russia.

Imports

• A ban on the import or acquisition of the following goods and technology consigned from or originating in Russia (as well as related services):
  • Russian-origin fish; seafood; alcoholic beverages;
  • non-industrial diamonds; and
  • oil, gas, coal and related products.

Services

• A ban on the provision of maritime insurance to ships carrying Russian crude oilor/ refined oil products to or between third countries, unless the oil/ refined oil product has been sold below a specific price cap;
• A ban on Russian aircraft from US airspace and the supply of any US-origin or US-controlled items for use in servicing aircraft operated by certain airlines;
• A ban on accountancy, corporate formation, management consultancy, and PR services, and, from 18 June, engineering and architecture services; and
• A ban on US advertising and sales of equipment to Channel One, Russia-1 and NTV.

Donetsk and Luhansk

• Sanctions on the parts of Donetsk and Luhansk occupied by Russia prohibiting new investment and the import or export of goods, services or technology.

Belarus:

• Similar bans on exports, imports and investment as apply to Russia.

 

OUR TEAM

 
Fieldfisher's experienced multi-disciplinary sanctions and export control team includes lawyers who have negotiated and drafted EU and UN sanctions regimes in Government and regularly sanctions advice to businesses operating around the world in a wide variety of sectors.  We work closely with US partners to provide coordinated, comprehensive and practical advice to help business understand and manage the impact of sanctions. 

For more information please contact Andrew Hood (Partner, International Trade): Andrew.hood@fieldfisher.com +44(0)330 460 6568
 
* The contents of this notice do not constitute legal advice and are provided for general information purposes only.