UK, EU and US sanctions on Russia

UK, EU and US Sanctions on Russia and Belarus update as of 24 July 2024

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 24 July)
2. A 5-step checklist for assessing how your activities may be affected
3. A Sanctions Summary

1. WHAT'S NEW

UK

• On 19 July 2024, OFSI added seven new FAQs to its UK Financial Sanctions FAQs. The FAQs relate to:
  • Trust Services Sanctions (see new FAQs 92 – 97 in the "Russia" section). These cover topics including (i) what activity is prohibited by the trust services sanctions; (ii) the trust services General Licence; (iii) who the trust services sanctions apply to; and (iv) the impact on the trust services sanctions when an asset freeze is in place.
  • The National Settlement Depository General Licence (General Licence INT/2024/4919848 - see further below and new FAQ 98 in the "General Licensing" section). This confirms that conversions of depositary receipts to local line qualify as a sale, transfer or divestment under the new General Licence.
• On 18 July 2024, the UK published a call to action regarding President Putin's "shadow fleet" of oil tankers, transporting Russian oil in circumvention of Russian sanctions. The call to action has been endorsed by the nations of the European Political Community and the EU, reaffirming the joint aim to "address the risks that the ‘shadow fleet’ poses to the environment, maritime safety and security in Europe and beyond, the integrity of international seaborne trade, and respect for international maritime law." On the same day, the UK also sanctioned 11 oil tankers said to form part of Putin's "shadow fleet". The sanctioned ships include Rocky Runner, Dynamik Trader and Fighter Two.  
• On 10 July 2024, the UK High Court gave judgment in Hellard v OJSC Rossiysky Kredit Bank & Ors. The judgment discusses the test for "control" in light of the Mints and Litasco judgments. It breaks down control into 4 types:
  • De jure control: this exists where there is an absolute legal right to exercise control;
  • Actual present de facto control: this exists where the putative controller is manifestly "calling the shots" (to adopt the language used in Mints) with no legal right to do so;
  • Potential future de jure control: this would exist where, although the designated person enjoyed no current legal right of ownership or control, the designated person had the legal means to obtain ownership or control; and
  • Potential future de facto control: this would exist where although there was no evidence that the putative controller was currently exercising de facto control, there is some good reason to believe that the putative controller could, if they wished, exercise control in some manner.

• The judgment seems to strengthen the argument that President Putin does exercise at least existing de facto control over large state-owned companies such as Gazprom, but this remains shrouded in ambiguity.

• On 4 July 2024, it was reported that the UK National Crime Agency has applied to Westminster Magistrates' Court for a forfeiture order of £1.1 million from Peter Aven, a Russian oligarch alleged to have been involved in supporting the Russian Government. The application was made on the basis that the funds, which have been frozen since 2022, are derived from criminality, namely shifting money to evade sanctions. The application marks a departure from UK authorities' usual approach of temporarily freezing assets and could set a precedent for future cases.   
• OFSI has issued various General Licences, including:
  • General Licence INT/2024/4919848, which allows for the sale, divestment or transfer of financial instruments held at the National Settlement Depository and the payment of safe keeping fees.
  • General Licence INT/2024/4881897 (Payments to UK Revenue Authorities). The General Licence allows permitted payments to be made to Revenue Authorities by, or on behalf of, a designated person. Permitted payments are defined as being all payments owed by or due from a UK designated person to the Revenue Authorities, either at the point of, or after, their designation, including tax, duty, national insurance contributions, penalties or interest. The General Licence also includes reporting and record-keeping requirements.
  • General Licence INT/2024/4888228 (Payments for Statutory Audits). The General Licence allows permitted payments to be made to Statutory Auditors by, or on behalf of, a designated person. Permitted payments are defined as being any remuneration receivable by Statutory Auditors for the Statutory Audit of accounts. There is also various reporting and record-keeping requirements.

EU

• On 17 July 2024, the newly elected European Parliament passed a resolution to restate the continued support of MEPs for Ukraine's independence, sovereignty and territorial integrity. The resolution also restates the conviction that Russia must compensate financially for the destruction it has caused, indicating that the Parliament want a "sound legal regime for the confiscation of Russian state-owned assets frozen by the EU". The Resolution was adopted by 495 votes in favour, 137 against and 47 abstentions.
• The EU has updated various chapters of its Consolidated Sanctions FAQs:
  • On 2 July 2024, various FAQs were updated (relating to Provision of Services, Divestment from Russia, State-owned Enterprises, General Questions and Targeted Vessels). Of note, the FAQs on State-owned Enterprises provide guidance on when an entity is subject to both a transaction ban (under Article 5aa of Regulation 833/2014) and an asset freeze (under Regulation 833/2014).
  • On 12 July 2024, the Oblasts FAQ was updated to reflect that as at 12 July 2024, the city of Zaporizhzhia and the city of Kherson are under Ukrainian control.
  • On 15 July 2024, the "No Re-Export to Russia" Clause FAQ was updated to include a new question regarding whether the no re-export to Russia clause requirement is necessary for public contracts. The FAQs explain the exemption for public contracts concluded with a public authority in a third country or with an international organisation, which was introduced in the EU's 14^th sanctions package.
• On 29 June 2024, the EU extended sanctions measures against Belarus, which approximate those already in place against Russia. The measures are intended to mitigate the circumvention of Russian sanctions stemming from the high degree of integration between the Russian and Belarusian economies. These 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;
  • Prohibit the import of gold and diamonds from Belarus, as well as helium, coal and mineral products, including crude oil;
  • Prohibit the provision of certain services to the Belarus government and its representatives, including certain accounting and auditing services; architectural and engineering services; and advertising and market research services;
  • 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
  • Provide for EU operators to claim compensation from damage caused by Belarusian individuals and companies due to sanctions implementation and expropriation.
• On 28 June 2024, the EU announced measures designating two individuals and four companies for circumventing Russia sanctions and materially supporting the Russian Government. Those that were designated include:
  • Dimitry Beloglazov and companies LLC Titul, JSC Iliadis and Rasperia for the creation of a complex circumvention scheme which allowed Oleg Deripska (already subject to EU restrictive measures) to sell frozen assets for an economic benefit.
  • PJSC TransContainer, Russia's largest railway container operator, and its General Director, Mikhail Kontserev. The Council allege that PJSC TransContainer's revenues increased throughout 2023 due to the flow of Belarusian cargoes and the company's participation in an illegal weapon trade scheme with North Korea, in support of the Russian Government.
• On 28 June 2024, German customs investigators arrested four individuals accused of exporting over 170 luxury cars to Russia, in contravention of Russian sanctions. The arrests were made after raids and searches on 24 residential and business premises. Five cars were seized in addition to 300,000 euros in cash. The authorities also obtained a substantial freezing order over approximately 13.3 million euros, said to be the proceeds from the car sales.

US

• On 10 July 2024, OFAC issued General License No. 13J, which authorises US persons or entities owned or controlled by US persons to, amongst other things, pay taxes, purchase permits and pay import duties in respect of transactions  prohibited by Directive 4 under Executive Order 14024 (Prohibitions Related to 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). This is provided that the transactions are incidental and necessary to the ordinary day-to-day operations in Russia of the US persons or entities.
• On 9 July 2024, the US Department of Justice announced that Nikolay Goltsev and Salimdzhon Nasriddinov pleaded guilty to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. Goltsev and Nasriddinov are scheduled to be sentenced on 10 December and 11 December respectively. They each face a maximum penalty of 20 years in prison.
• On 8 July 2024, OFAC removed Alexey Panferov from its Russia sanctions list. No reasons were given for the de-listing. Panferov had been listed since March 2022 for alleged links to PJSC Sovcombank.
• On 2 July 2024, former vice president of KanRus Trading Company Inc., Douglas Robertson, pleaded guilty for his role in a years-long conspiracy to circumvent US export laws by filing false export forms with the US Government and selling and exporting sophisticated and controlled avionics equipment to customers in Russia without the required licenses. A sentencing hearing is scheduled for 3 October 2024.

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). 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 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:

1. 1. ‘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
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).

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

 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 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;
  • diamonds, 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 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 and whether an act complies with UK sanctions.  A General Trade Licence authorises certain such services; and
  • social media, internet services and app stores are required to block content from RT and Sputnik.
     
• A ban on all Russia-owned 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 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 EU 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 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 the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states; and
  • a requirement to notify transfers of funds out of the EU exceeding 100,000 EUR during a quarter (starting on 1 May 2024) 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.
• 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;
  • 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; 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.

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;
  • items which may contribute to Russia’s military, industrial and technological enhancement including coal, certain electronic components, certain machinery components, chemicals, torture goods, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles, construction-related goods, processed steel, copper and aluminium goods, lasers, all-terrain vehicles and certain machine tools; and
  • any goods or technology for the completion of LNG projects.
• A requirement for EU exporters to contractually prohibit their customers in third countries (with the exception of partner countries) from i) re-exportation to or for use in Russia of certain sensitive goods, ii) using (or allowing the use of) transferred intellectual property to supply sensitive goods to Russia.
• A requirement for EU exporters of common high priority items and their subsidiaries in third-countries to undertake due diligence to mitigate the risk of re-export to Russia.
• 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.

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;
  • 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;
  • LNG through EU terminals that are not connected to the interconnected natural gas system; and
  • Ukrainian cultural property.
• 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.

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, product testing and technical inspection services, as well as software for the management of enterprises and for industrial design and manufacture to the Government of Russia, or entities established in Russia;
  • 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
  • reloading services for transshipment of Russian LNG, and any services for the completion of LNG projects.
• 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, 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.

Anti-circumvention

• Requiring EU parent companies to undertake their "best efforts" to ensure that their third-country subsidiaries do not circumvent sanctions.

Compensation

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

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.
• On 29 June 2024, the EU extended sanctions measures against Belarus, to approximate those already in place against Russia. The measures are intended to mitigate the circumvention of Russian sanctions stemming from the high degree of integration between the Russian and Belarusian economies. These 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 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.

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 oil/ 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 provides 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.