UK, EU and US sanctions on Russia

1. WHAT'S NEW

Key sanctions developments from the UK, EU and US from November 2025.

i. UK

1. On 14 November 2025, OFSI issued General Licence INT/2025/7895596 authorising transactions with two Bulgarian subsidiaries of Lukoil, Lukoil Bulgaria EOOD and Lukoil Neftochim Burgas AD, until 14 February 2026. New FAQ 173 describes the licence.
2. On 14 November 2025, the UK National Crime Agency and OFSI published an Amber Alert to provide information to institutions to help identify and prevent sanctions evasion involving transactions by networks and shadow fleets that support sanctioned regimes. It sets out red flags, including:
   1. Shipping companies or consignments that have changed ownership, name, management structures or flags within a short timeframe with no clear commercial rationale;
   2. Vessels engaged in voyages with gaps or unexplained deactivation in automatic identification system transmissions near sanctioned jurisdictions;
   3. Engagement with clients, counterparties or vessels previously linked to sanctions breaches or designated persons;
   4. Unusual or non-standard payment arrangements including third-party payments, cryptocurrency or payments inconsistent with industry norms.
       
3. On 13 November 2025, the UK Export Control Joint Unit (ECJU) published its quarterly report on licencing statistics. A total of 2,612 standard individual export licences were issued in Q2 and a decision was made within 20 working days for 53% of licence applications.
4. On 13 November 2025, the London branch of art gallery Hauser & Wirth and an arts logistics company were charged with a breach of UK sanctions regulations by making luxury goods available to a person connected with Russia contrary to Regulation 46B. The penalty is a potentially unlimited fine.
5. On 13 November 2025, the UK High Court awarded PrivatBank over USD$3 billion in damages against its former owners, Igor Kolmoisky and Gennady Bogolyubov for misappropriating almost USD$2bn in funds. Mr Kolomoisky and Mr. Bogolyubov requested a stay from the court arguing that Ukraine's sanctions prohibit asset transfers with Ukraine. The High Court rejected this argument saying that Ukrainian sanctions do not have this kind of extraterritorial effect in this case. The assets were abroad, and damages are payable in London.

ii. EU

1. Advocate General Biondi has published a non-binding opinion on Latvia's appeal against a General Court decision to annul EU sanctions on Petr Aven and Mikhail Fridman in 2022 (made on the basis that the Council had not provided sufficient evidence to support their designations). AG Biondi's opinion is that the Court should reject all grounds of Latvia's appeal. Of note, AG Biondi asserts that:
   1. 1. 1. There is no presumption that proximity to Russian decision makers necessarily means a person benefits from those decision makers for the purposes of EU sanctions regulations; and
         2. The absence of actions by Fridman and Aven to distance themselves from the Russian Government could not, on its own, be used as evidence that they had supported Russian policies.

Advocate General opinions are not binding but historically the CJEU follows them in a majority of cases. The judgment of the court is expected to follow in the coming months.

The opinion contrasts with the UK Supreme Court decision in Shvidler where the court recognised the wider context and allowed consideration of the overall policy aim of the sanctions regime.

iii. US

1. On 14 November 2025, the US OFAC issued four General Licences relating to Rosneft and Lukoil:
   1. 1. 1. GL124B: authorises Rosneft and Lukoil to engage in petroleum services related to the Caspian Pipeline, Tengizchevroil and Karachaganak projects;
         2. GL128A: authorises certain transactions involving Lukoil retail services stations outside Russia until 12:01am on 13 December 2025;
         3. GL130: authorises transactions with 4 Bulgarian subsidiaries of Lukoil until 29 April 2026; and
         4. GL131: authorises transactions facilitating the sale, disposition or transfer of Lukoil International GmbH (LIG) or any entity owned 50% or more by LIG provided that the transaction is contingent on approval from OFAC. This GL lasts until 13 December 2025.
2. Effective 30 September 2025, the Bureau of Industry and Security (BIS) announced that it would apply the 50% rule to the export control list, automatically imposing restrictions on entities 50% or more owned directly or indirectly by an entity on the Entity List, Military-End User List and certain SDN listed entities. This would have impacted thousands of entities across multiple jurisdictions and sectors and represented a significant change to the level of due diligence required in order to comply with US export controls. However, on 11 November 2025, the BIS suspended the application of the 50% rule to its export control list under the Export Administration Regulations until 9 November 2026. The 50% rule is still applied by the US OFAC.

2. YOUR 5-STEP CHECKLIST

Working through the following 5 questions will help you to better manage your business's sanctions compliance:

1. Which countries’ sanctions apply to your activities?
2. Are any of your business partners (banks, suppliers, customers, distributors etc.) subject to an asset freeze?
3. Are any of your activities affected by other financial sanctions?
4. Are your products or services restricted?
5. Do you have the right measures in place to mitigate your risks?

We step through the key considerations that will help you answer each question below.

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). Non-US persons may be penalised if they cause US persons to violate US sanctions, for example omitting reference to the involvement of a sanctioned party or jurisdiction to a financial transaction involving a US person.

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 (banks, suppliers, customers, distributors etc.) subject to an asset freeze?

The UK, EU, US and others have imposed asset freezes (‘blocking sanctions’ in US terms) on most Russian banks, individuals and entities involved in strategic industries (e.g. defence, energy, finance, 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’. As the various sanctions regimes have matured, asset freezes have increasingly been imposed on third country entities and individuals (including those based in China, Turkey, the UAE etc.).

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 (economic resources are broadly defined).

US and some EU restrictions go further and prohibit all transactions with the designated (i.e. listed) party.

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

1. 1. ‘owned’ by a designated party or parties. The US and EU threshold is 50% or more, while the UK threshold is ‘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 recognises aggregated ownership only if there is evidence of a joint arrangement between two or more designated parties; or
2. 2. (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).

'Control' considerations:

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. Some key considerations are set out below:

UK: The UK courts and Government have all contributed to a somewhat uncertain definition of 'control'.

The Court of Appeal's 2023 judgment in Boris Mints & Ors v PJSC National Bank Trust (NBT) & Anor implies that all Russian state-owned companies may be controlled by President Putin, a designated person. The judgement is being appealed to the Supreme Court.

The UK High Court's judgment in Hellard v OJSC Rossiysky Kredit Bank & Ors discusses the test for "control" in light of the Mints judgment, breaking the concept of control into 4 categories: de jure control; actual present de facto control; potential future de jure control and potential future de facto control.

UK Government guidance published after the ruling in Mints states that: "If [Government] considered that a public official was exercising control over the public body under UK sanctions regulations, [the Government] would look to designate the public body where possible when designating the relevant public official." That is, in the view of the UK Government, simply being run or overseen by a UK designated public official would not of itself mean the organisation is subject to UK sanctions.

The 2025 High Court judgment in Nikolay Fetisov & Ilya Yurov & PJSC National Bank Trust applied the above judgments when considering whether President Putin and/or Central Bank of the Russian Federation Governor Elvira Nabiullina "control" NBT (the same entity considered in the Mints decision. In this case, the Court found that the absence of evidence of potential de facto control was significant, ultimately deciding that NBT was not "controlled" by a designated person and therefore did not need to be treated as subject to an asset freeze. This aligned with a statement from OFSI presented in evidence noting that "OFSI does not consider NBT to be subject to sanctions."

The UK Office of Financial Sanctions Implementation (OFSI) provides guidance on how to determine whether an entity is owned or controlled by a sanctioned person. It treats ownership and control together, and therefore does not provide a stand-alone definition for control. Nonetheless, according to the guidance, an entity is considered owned or controlled, directly or indirectly, if any of the following apply:

• ​​​​​the person holds (directly or indirectly) more than 50% of the shares or voting rights in an entity;
• the person has the right (directly or indirectly) to appoint or remove a majority of the board of directors of the entity; and/or
• it is reasonable to expect that the person would be able to ensure the affairs of the entity are conducted in accordance with the person’s wishes.

OFSI's guidance provides practical examples of the circumstances above and discusses ownership and control in relation to minority interests, joint interests and aggregation.

The takeaway from the above is that ongoing and enhanced due diligence and monitoring is important. See paragraph 5 below for our tips on due diligence and general compliance. 

EU: The EU sets out 8 criteria to be taken into account when assessing 'control'. These can be found in the "Update of the EU Best Practices for the effective implementation of restrictive measures." Further guidance on how the EU interprets "ownership and control" can be found in European Court of Justice rulings, as well as in opinions (such as those from 19 June 2020 and 8 June 2021), notices, and FAQs published by the European Commission.

The EU General Court judgment in Positive Group PAO v Council of the European Union further clarified the EU position on control. The Court noted that where a parent company owns or controls a subsidiary in such a way that the parent exerts 'decisive influence' the parent and subsidiary may form a "single group". Further, the term 'entity' mut be regarded as being broad such that despite a parent and subsidiary being legally separate persons, they may be viewed as one 'entity'.

Screening

If you do business with Russia or Belarus (even only if indirectly)  you should screen your business partners 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.

Helpful links:

The consolidated sanctions lists of the UK, EU and US can be accessed via the following links:

• UK OFSI consolidated list: https://www.gov.uk/government/publications/the-uk-sanctions-list
• EU consolidated list search: https://data.europa.eu/data/datasets/consolidated-list-of-persons-groups-and-entities-subject-to-eu-financial-sanctions?locale=en
• US OFAC consolidated list: https://sanctionssearch.ofac.treas.gov/

If you would like assistance on any of these issues, do get in touch. 

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; and
• new investment or acquisitions and the provision of investment services and trust services.

(See our "Sanctions Guide" below for more detail on these non-asset freeze measures.)

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 (as opposed to financial sanctions) may restrict or prohibit:

• the sale, supply, transfer or export to Russia/Belarus, directly or indirectly, of certain goods, technology and software 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 and diamonds – with similar related provisions as those for exports;
• accounting, tax consulting, business and management consulting, public relations, maritime transport and insurance, architectural, engineering, IT consultancy, legal advisory, brokering and trusts services;
• the use of airspace and ports for aircraft and ships;
• more wide-ranging embargoes on most finance and trade with, and the provision of related services to, certain regions (previously Crimea, now extended to the occupied areas of Donetsk, Kherson, Luhansk and Zaporizhzhia).

(See our "Sanctions Guide" below for more detail on trade sanctions.)

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

There is an increasing expectation by sanctions regulators that you will have certain due diligence measures in place to ensure your business's compliance with applicable sanctions and to mitigate risks of being involved in circumvention of sanctions. It is insufficient to rely on third parties, such as banks, to undertake financial sanctions checks or screenings on your behalf and you must make proportionate enquiries.  That being the case and 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 and have the appropriate internal policies and processes in place? For example, have you:

a. Reviewed your business's exposure to sanctions? This might include:

• Conducting a strategic risk assessment to determine your business's exposure to sanctions risks, including the risk of being targeted by others seeking to circumvent sanctions.​​

b. Implemented, reviewed and/or updated sanctions related policies and procedures? This could include:

• Updating your compliance policies and procedures to ensure that they are proportionate and workable.
• Reviewing 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).
• Implementing internal policies to ensure that you continuously monitor both your business's exposure to sanctions risk and the status of customers and others involved in your supply chain.
• Arranging a form of regular, independent, audit of your compliance regime.
• Implementing rigorous due diligence processes, including enhanced due diligence screening processes:
  • For transactions involving high risk products (such as Common High Priority items) and export destinations;
  • To understand your current and prospective customers, including to identify:
    • if they, or any entity in their ownership structure, are based in high-risk jurisdictions or involve complex structures (like trusts) that might obscure ownership and control.
    • if they, or any entity in their structure, are subject to sanctions.
    • which client groups are most likely to breach sanctions (and how to mitigate those risk).
• Implementing a process to keep a record of your assessment of sanctions risk for each customer or business partner.

c. Familiarised yourself with sanctions related obligations, including licensing and reporting? For example:

• Have you identified whether you need a licence and from whom (OFSI, a Crown Dependency etc.)? If already operating pursuant to a licence (including a General Licence e.g. issued by OFSI or OFAC), ensured your staff are familiar with its conditions and any reporting requirements?
• Identified if/when you are required to submit reports (e.g., if you are a relevant firm for reporting purposes, you may need to report suspected sanctions breaches, or if you are a UK person holding funds of a designated person, you must report) and to whom (you might have to report separately to different UK government agencies)?
• Familiarised yourself with the steps you will need to take if staff, a business partner or a customer becomes sanctioned or you suspect is breaching sanctions?
• Have effective communication and monitoring systems in place to identify and respond to any information requests received from an authority?

d. Reviewed your contracts? For example, to determine:

• Whether your contracts enable you (or the counterparty) to suspend or terminate without liability or serious risk of challenge, whether through a specific sanctions provision or other clauses such as the material adverse change clause.
• Whether your contracts should contain a "no re-export to Russia" clause. This will be particularly relevant for exporters of sensitive goods, including goods related to aviation, jet fuel, firearms and Common High Priority items (a list of dual-use or advanced technology battlefield items).

e. Tailored, updated and delivered training for your compliance leads and others across your business?

• For example, have you familiarised key staff (and yourself) with common techniques used by others to circumvent sanctions, and trained staff to monitor contractual arrangements for customers and the end-use of products? Compliance leads may need to be trained to identify common red flag indicators of circumvention. Red flag indicators include inconsistencies relating to the product, the customer, the transaction and the export destination.

f. Familiarised yourself with guidance, including sector-specific guidance and "threat assessments"? These include detailed guidance on reporting, licensing, identifying red flags etc. For example:

• UK financial services sector: Financial Services Threat Assessment
• UK legal sector: Legal Services Threat Assessment, SRA guidance on complying with the UK Sanctions Regime
• UK Property and related services: Property and related Services Threat Assessment 
• UK Art Market Participants and High Value Dealers: Art Market Participants and High Value Dealers Threat Assessment
• UK Cryptoasset firms: Cryptoassets Threat Assessment
• For practices and individuals regulated by the Council for Licensed Conveyancers: Council's advisory note.

Remember that most (but not all) breaches of UK trade sanctions are strict liability. The Office of Trade Sanctions Implementation ("OTSI") is required to ignore any defence that a person did not know or had no reasonable cause to suspect that an offence has been committed. This makes it all the more important to have appropriate and robust measures in place to ensure your business does not inadvertently breach UK trade sanctions. Criminal penalties may also be imposed for breaches of certain sanctions.

If you would like help with implementing any of these suggested risk mitigation measures, please don't hesitate to reach out to our team.

3. HIGH-LEVEL OVERVIEW OF NON-ASSET FREEZE SANCTIONS

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 key prohibitions, restrictions and other measures implemented by the UK (in addition to asset freeze measures) are described below. This list is not exhaustive but aims to demonstrate the wide range of measures currently in place. Certain defined persons also have reporting requirements, which we do not describe in detail here.

Financial services:

• A ban on dealing with transferable securities and money market instruments issued on or after a certain date (in most cases 1 March 2022) with a maturity exceeding 30 days by:
  • an entity listed in Schedule 2 or their subsidiaries (issued after August/September 2014);
  • 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;
  • 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 granting certain loans or entering into certain credit arrangements (there are six categories of "relevant loans", each treated differently under the Regulations;
• A ban on UK credit or financial institutions establishing or continuing a correspondent banking relationship with, or processing 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;
• A ban on the provision of trust services to or for the benefit of a designated person;
• Selected Russian banks removed from the SWIFT messaging system; and
• Designated persons disqualified from holding company director roles.

Trade:

Exports

• A ban on the direct or indirect export, supply and delivery, transfer and making available of the following goods, technology, software and related services, to or for use in Russia:
  • military and internal repression items;
  • goods and technology (including intellectual property, industrial know-how etc.) of strategic importance to Russia’s military-industrial and economic development, including 'critical industry', dual use, quantum computing and advanced materials, aviation, space and maritime items;
  • software including business enterprise, industrial design and oil and gas related software and technology;
  • a wide range of items mainly for the manufacturing sector and luxury items;
  • infrastructure-related items;
  • energy-related and oil refining items, including jet fuel and energy-related technology;
  • 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 direct or indirect import into the UK 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, and gold, including of Russian goods that have been processed in third countries;
  • a range of materials and manufactured items generating revenue for Russia;
  • diamonds (natural and synthetic), including certain diamonds processed in third countries, and diamond jewellery;
  • a 35% tariff on imports of certain goods originating in Russia and Belarus; and
  • certain Russian metals, and articles thereof, including copper, nickel, aluminium, lead, zinc, tin, tungsten and other base metals.

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 have been sold below a specific price cap;
  • technical assistance and brokering services relating to the products listed above under 'imports';
  • trust services, accounting, business and management consulting, public relations, advertising, architectural, auditing, engineering and IT consultancy and design services to persons connected with Russia;
  • interception and monitoring services provided to or for the benefit of the Government of Russia;
  • legal advisory services, to non-UK persons in respect of conduct outside the UK where “knowing that the object or effect of the services” is to enable or facilitate activity which would be prohibited under UK sanctions (i.e. if the activity was conducted by a UK person or was taking place in the UK). If you think that this prohibition may apply to you, consider whether any of the exceptions may apply; and
• • social media, internet services and app stores are required to block content from RT and Sputnik.
• A ban on all Russia-owned, chartered or operated aircraft from UK airspace and landings, and on aviation technical assistance to, or for the benefit of, designated people/entities.
• A ban on:
  • specified ships or Russia-owned or operated ships from entering ports in the UK and on providing shipping technical assistance to, or for the benefit of, designated people/entities; and
  • registration in the UK of ships owned, controlled, chartered or operated by designated persons or persons connected with Russia.

Non-government controlled Ukrainian territory

• A ban on:
  • finance and investment, loans and credit;
  • the export, supply and delivery, and making available of certain restricted goods and technology, and related services (including military, infrastructure-related goods and tourism services);
  • providing technical assistance or brokering services relating to restricted goods and technology; and
  • all imports.

Anti-circumvention

The UK Government has made it an offence for any person to knowingly take any action intended to, or that has the effect of, circumventing certain sanctions or helping others to do so.

To support compliance and raise awareness, the Government has issued various alerts and guidance documents. These include:

• Guidance for exporters on Countering Russian sanctions evasion
• Red Alert on Shadow Fleet Sanctions Evasion and Avoidance Network

Belarus

The UK Government has sought to combat Russia's efforts to circumvent sanctions by expanding UK sanctions targeting Belarus (as set out in the Republic of Belarus (Sanctions) (EU Exit) Regulations 2019). These measures are similar to those outlined above and include:

• 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 (including technical assistance and brokering services), to Belarus: military and internal repression; dual-use, critical industry, quantum computing, advanced materials, certain minerals, oil refining items, iron and steel products; 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;
• A ban on Belarusian and other specified ships from entering UK ports, and aircraft from UK airports;
• 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; and
• Director disqualification for designated persons.

EUROPEAN UNION

The key prohibitions, restrictions and other measures implemented by the EU (in addition to the asset freeze measure set out above) are described below. This list is not exhaustive but aims to demonstrate the wide range of measures currently in place.

Financial services:

• Financial transactions:
  • A ban on the provision of SWIFT services to most Russian banks;
  • A ban on transactions with certain Russian banks and entities which are directly or indirectly 50% owned by them;
  • A ban on EU and certain third country entities that operate outside of Russia connecting with the Russian Central Bank's 'System for Transfer of Financial Messages' (SPFS);
  • A ban on transactions with Russia's central bank;
  • A ban on transactions with the Russian Direct Investment Fund (RDIF) and associated entities (including entities in which the RDIF has significant investments, and listed third country entities that provide investment or financial services to the RDIF);
  • 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 Russian nationals or persons residing in Russia owning, controlling or holding any posts on the governing bodies of entities providing such services;
  • A ban on transactions with specified credit and financial institutions and crypto asset providers established outside of the EU that facilitate transactions that significantly frustrate the purpose of EU sanctions or support Russia's war against Ukraine;
  • A ban on transactions by credit institutions, financial institutions and crypto-assets providers that directly or indirectly facilitate activities of, or otherwise benefit, persons engaged in Russia’s destabilising activities;
  • A ban on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states;
  • A requirement to notify transfers of funds out of the EU exceeding 100,000 EUR during a quarter by EU entities owned more than 40% by Russian nationals (irrespective of where they are resident or of dual citizenship), entities established in Russia or persons residing in Russia;
  • A ban on transactions relating to or involving tangible assets (such as vessels, aircraft, real estate, ports, airports, physical elements of digital and communication networks) supporting Russia-driven destabilising activities;
  • A ban on direct and indirect transactions with five Russian ports (Astrakhan, Machkala, Ust-Luga, Primorsk, Novorossiysk) and six Russian airports (Begishevo, Vnukovo, Zhukovsky, Perm, Koltsovo, Pskov).
     
• Investment:
  • A ban on investment, participation or contribution to projects co-financed by the Russian Direct Investment Fund;
  • A ban on transactions with the Russian Regional Development Bank, Russian Maritime Register of Shipping and other specified state-owned enterprises;
  • 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) including on new investments, as well as the provision of goods, technology and services for the completion of LNG projects under construction;
  • 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 exclusion of all financial support to Russian public bodies; and
  • A ban on EU political parties and foundations, NGOs (including think tanks) and media service providers in the EU from accepting funding from Russia.
     

Public funds:

• A ban on the participation of Russian companies in public procurement in member states.
• A ban on Russian companies or their subsidiaries getting public funding from the EU, Euratom or member states.
• A ban on EU political parties, media and NGOs accepting funding from the Russian government or state-owned companies.

Trade:

Exports

• A ban on the direct and indirect export, supply and delivery, and transfer of the following goods and technology, and related services, to or for use in Russia (and, in some cases, to sanctioned individuals or entities in third countries):
  • Military (including items in the Common Military List), 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;
  • any goods or technology for the completion of LNG projects;
  • software management systems and software used in the banking and financial sector;
  • certain industrial goods, specifically targeting minerals, chemicals, steel, glass materials, and fireworks, and provision of related assistance; and
  • items which may contribute to Russia’s military, industrial and technological enhancement including:
    • coal;
    • certain electronic components;
    • software related to computer numerical control machines;
    • certain machinery components;
    • certain chemicals, including chemical precursors to riot control agents and chromium compounds;
    • torture goods;
    • lithium batteries;
    • thermostats;
    • DC motors and servomotors for unmanned aerial vehicles ("UAVs") and controllers used to guide UAVs;
    • construction-related goods;
    • processed steel;
    • copper and aluminium goods;
    • lasers;
    • all-terrain vehicles; and
    • certain machine tools.

The ban on some goods and technologies (e.g. dual-use goods) and related services also extends to certain (sanctioned) persons in third countries.

• A ban on the reloading of Russian LNG in the EU for the purpose of transshipment to third countries;
• A prohibition to sell or otherwise transfer ownership, directly or indirectly, of tankers for the transport of crude oil or petroleum products whether or not originating in the EU, to any person in Russia or for use in Russia; and a notification obligation for the sale of tankers to any third country;
• A ban on certain sensitive goods exported from the EU to a third country being transported in transit via Russia. These goods include dual use goods and technology  which might contribute to Russia’s military and technological enhancement or to the development of its defence and security sector; and
• A ban on any transaction with certain listed persons and entities established in Russia which are publicly controlled or with over 50% public ownership or in which Russia, its Government or Central Bank has the right to participate in profits or with which Russia, its Government or Central Bank has other substantial economic relationship.

Imports

A ban on the direct or indirect import or acquisition of the following goods and technology consigned from or originating in Russia (as well as related services):

• Certain oil and refined products. There are various derogations and exemptions which are amended frequently. Notable examples include:  
  • seaborne products that transit Russia but originate in a third country and are owned by non-Russians
  • Imports from a third country of refined petroleum products made from Russian crude oil (and related services) if the products come from a "partner country";
• LNG through EU terminals that are not connected to the interconnected natural gas system;
• coal and other solid fossil fuels;
• goods and technologies listed in the Common Military List of the EU;
• 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;
• goods which generate significant revenues for Russia, such as liquefied propane gas, pig iron and spiegeleisen, copper wires, aluminium wires, foil, tubes and pipes;
• Russia-origin gold (including jewellery) if it has been exported from Russia into the EU or to any third country;
• diamonds exported from Russia and transiting Russia. There is a phasing-in from 1 March to 1 September 2024 of a ban on Russian diamonds processed in third countries. The ban on jewellery incorporating diamonds originating in Russia has been suspended until G7 countries align;
• Russian unwrought aluminium or the provision of related assistance (imports for which will be gradually phased out, pursuant to exemptions setting out import quotas); and
• Ukrainian cultural property.

Services

• A ban on the provision of the following services:
  • provision of 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 have been sold below a specific price cap (the "oil price cap");
  • storage of certain Russian origin or Russian exported crude oil or petroleum products in the EU (even if the oil price cap is respected);
  • provision of goods, technologies and services for the completion of crude oil projects in Russia, such as the Vostok oil project;
  • 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, product testing and technical inspection services to the Government of Russia, or entities established in Russia;
  • provision of software for the management of enterprises and for industrial design and manufacture to the Government of Russia, or entities established in Russia (including a ban on the transfer of intellectual property rights and trade secrets related to prohibited software);
  • provision of construction services and related assistance to the Government of Russia and Russian entities;
  • all transactions with i) listed state-owned companies including the Russian Maritime Shipping Register ii) listed persons that claim exclusive Russian court competence in sanctions related disputes iii) listed entities that use the Russian Central Bank's SPFS iv) listed financial institutions that facilitate transactions with Russia's defence-industrial base; and
  • provision of reloading services for transshipment of Russian LNG, and any services for the completion of LNG projects.
• A ban on transactions with entities in third countries that are not banks, financial institutions, or crypto service providers (for example oil traders) if they significantly undermine the oil-related bans.
• A ban on EU nationals holding any posts on the governing bodies of any Russian state-owned or controlled legal persons, entities or bodies.
• A suspension of broadcasting licences in the EU for specifically-designated media outlets and a ban on the broadcasting of their content in the EU or directed at the EU.

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, with significant restrictions on 'non-scheduled' (chartered) flights;
• A prohibition on providing port and lock access to vessels registered under the flag of Russia (or having changed their flag to another state after 24 Feb 2022), or certified by the Russian Maritime Register of Shipping;
• A ban on designated vessels from accessing EU territory or services such as finance, technical assistance or crewing;
• A ban on transportation of goods by road within the EU, by Russian entities and EU entities with more than 25% Russian ownership; and
• A ban on new registrations of Russian intellectual property in the EU.

Compensation

• Allowing counter-compensation claims to be filed in Member State courts against sanctions-related compensation claims lodged by persons in third countries.

Compliance expectations and anti-circumvention

Due diligence

An EU operator who has failed to carry out appropriate due diligence may be held liable for a violation of sanctions. They will not be able to rely on claiming that they did not know, and had no reasonable cause to suspect, that their actions would violate the sanctions.

EU guidance clarifies that due diligence should be proportionate but at a minimum, it should include:

• screening of all parties to the transaction, including indirect parties (suppliers, service providers, transporters, banks);
• checks on the goods and services; and
• risk analysis of the transaction: on the contractual documentation; rationale for the transaction; financial flows; shipment route; end-use of the goods; and the risk of diversion of the goods.

Anti-circumvention

The EU has implemented a range of measures aimed at tackling circumvention. Two key measures are described below.

1. "Best efforts"

EU parent companies are required to undertake their "best efforts" to ensure that their third-country subsidiaries do not circumvent sanctions. "Best efforts" (as defined in guidance) means a high degree of effort and includes all actions that are suitable and necessary to achieve the result of preventing the undermining of the restrictive measures. 'Undermining' is a distinct concept to 'circumventing' and is defined in guidance.

Essentially, EU operators are now expected:

• to conduct due diligence to identify any activities by their non-EU subsidiaries (including those in Russia) that could undermine EU sanctions; and
• to put in place 'all actions necessary and feasible' to prevent such undermining, for example through internal compliance programs, mandatory reporting and training.

That said, the guidance is pragmatic and notes that best efforts should be understood as comprising only actions that are feasible for the EU parent company in view of its nature, its size and the relevant factual circumstances, in particular the degree of effective control over the legal person, entity or body established outside the EU.

2. Enhanced due diligence for Common High Priority Items

Common High Priority items are listed in Annex XL to Regulation (EU) No 833/2014. They are items that are commonly found on the battlefield in Ukraine or critical to the development, production or use of Russian military systems.

To respond to the problem of these items being reexported to Russia, the EU has introduced a requirement for EU exporters of Common High Priority items and certain other sensitive goods to contractually prohibit their customers in third countries (with some exceptions) from (i) re-exportation of the goods to or for use in Russia; (ii) using (or allowing the use of) transferred intellectual property to supply sensitive goods to Russia.

While there is no single model for compliance, EU guidance lists risk factors that should be considered and appropriate steps that suppliers should take to identify and assess the risk factors, and the mitigating measures they should implement. The bottom line is that, if a Common High Priority item exported to a third country is found to have reached Russia, the EU exporter’s failure to have conducted adequate due diligence may be considered to be a violation of EU sanctions law.

Hybrid activities

Since October 2024, the EU has implemented a separate Russia sanctions framework targeting so-called "hybrid activities" which include activities aimed at undermining electoral processes, sabotaging economic activities and other such actions designed to destabilise the EU and its Member States. Those designated under the framework will be subject to an asset freeze and will be forbidden from having funds made available to them by EU citizens and companies. Designated natural persons will be subject to a travel ban to EU territories.  More information can be found here.

Belarus

Similar bans on exports, imports, investment and transport apply in relation to Belarus.

Circumvention of sanctions on Russia was substantially facilitated by the close integration of the Russian and Belarusian economies. To combat this circumvention, the scope of EU sanctions targeting Belarus was extended to approximate those already in place against Russia. The EU sanctions in place targeting Belarus include measures that:

• Require EU exporters to include a "no-Belarus" clause in contracts, to prohibit the re-export to Belarus of sensitive goods and technologies;
• Require certain EU suppliers of common high priority items (and their non-EU subsidiaries) to implement due diligence mechanisms to assess risk of diversion to Belarus;
• Extend the export ban on dual-use / advanced goods and technologies, maritime navigations goods and luxury goods;
• Prohibit transit via Belarus of several sensitive goods;
• Prohibit the import of gold and diamonds, helium, coal and mineral products, including crude oil;
• Prohibit the import of items listed in the EU's Common Military List if they originate or are exported from Belarus. The export of such items to any person in Belarus or for use in Belarus is also prohibited;
• Prohibit transactions with certain (listed) Belarusian credit institutions and Belarusian subsidiaries;
• Prohibit the provision of certain services to the Belarus government and its representatives, including accounting and auditing services; business and management consulting or public relations services; architectural and engineering services; legal advisory services; IT consultancy services; advertising and market research services; and specified software for management of enterprises and industrial manufacture;
• Prohibit the transit of sensitive goods and technologies via Belarus;
• Require EU parent companies to undertake best efforts to ensure that their non-EU subsidiaries do not undermine EU sanctions; and
• Allow counter-compensation claims to be filed in Member State courts against sanctions-related compensation claims lodged by persons in third countries.

Any transaction or trade involving Belarus should be carefully assessed to ensure compliance with EU sanctions. 

UNITED STATES

Secondary sanctions:

• Secondary sanctions are aimed at discouraging non-US persons from engaging in certain prohibited activities. They extend the reach of US jurisdiction, and in the context of Russia, are authorised to be imposed on:
  • non-US persons who provide material assistance to or in support of persons blocked under EO 14024;
  • non-US persons engaged in certain activities for the benefit of the Russian government;
  • non-US financial institutions that the US considers are engaged in activities involving Russia's military-industrial base (Russia's military industrial base include all persons blocked under EO 14024 and any person operating in the technology, defence and related materiel, construction, aerospace, or manufacturing sectors of the Russian Federation economy); and
  • persons who participate in a significant transaction for supply of gold to or from Russia.

When considering whether secondary sanctions might apply to your activities, it is important to consider not only the OFAC list of Specially Designated Nationals and Blocked Persons ("SDNs"). Rather, you will need to consider the full range of sanctions lists published not only by OFAC (which, in addition to the SDN list, includes the Sectoral Sanctions Identifications List) but also by the Department of Commerce (such as the Entity List, the Denied Persons List and the Military End User List) and by the Department of State, among others.

The US International Trade Administration has developed a Consolidated Screening List search tool, available here: Consolidated Screening List.

Financial services:

• All forms of new investment in Russia, including the formation of joint ventures and all loans for commercial purposes to persons located in Russia;
• 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;
• Blocking sanctions on MOEX, NCC and NSD which prevent US persons from divesting securities if they involve one of these entities;
• 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;
  • uranium, gold, aluminium, copper, nickel; and
  • oil, gas, coal and related products.

Services

• A ban on the provision of petroleum services. The ban prohibits, with some narrow exceptions: “The exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of petroleum services to any person located in the Russian Federation.”  This petroleum services ban takes effect on 27 February 2025.
• A ban on the provision of services related to maritime transport (such as brokering, shipping, insurance) of Russian crude oil/ refined oil products, 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, quantum computing services, engineering and architecture services, services for the acquisition of aluminium, copper or nickel;
• A ban on IT consultancy and design services, transfer of software (except to US-owned companies under certain conditions), IT support services or cloud-based services for enterprise management software and design and manufacturing software; and
• A ban on US advertising and sales of equipment to Channel One, Russia-1 and NTV.

Access

• A ban on Russian-affiliated vessels entering into US ports

Donetsk and Luhansk

• Comprehensive 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 provide 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.