Ukraine Crisis: Sanctions

This memorandum is not intended to be exhaustive and has the sole purpose of providing a preliminary overview of the sanctions imposed, and in the process of being imposed, against Russia, with a particular focus on the sanctions adopted by the European Union and some other countries.

 

This memorandum is not to be construed as legal advice. An ad hoc analysis should be carried out regarding the applicability of individual sanctions in each specific case.

 

 

1. Introduction

On 24 February 2022, in the face of the events involving Ukraine, the United States, the European Union and other Western and Eastern countries began to adopt a series of sanctions specifically aimed at hitting the economy of the Russian Federation (or Russia).

 

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2. Outiline of the sanctions imposed by the United States and the European Union

 

 

3. Focus on the adopted sanctions.

3.1. European Union.

 

In the wake of the measures already adopted since 2014, as a result of the Crimean diplomatic and military crisis, the European Union, from 24 February 2022, by introducing four sanction packages, approved measures against the Russian Federation involving several actions.

 

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3.1.1. First package (22 February 2022).

 

Individual measures: a number of measures amending EU instruments adopted in 2014, in the framework of the sanctions imposed on Russia for the annexation of Crimea, add to the list of  persons and entities already “designated” a further 22 natural persons, including Russian Ministers of Defense and of Economic Development, Deputy Prime Ministers, senior military commanders, journalists, bankers and 4 legal entities, including two banks, a financial institution and an information agency, as well as 336 members of the Parliament of the Russian Federation (“Duma”). Such measures involve:

• asset freeze;
• a prohibition on making funds available to the designated persons;
• a travel ban on entering or transiting through EU territory.

With such additional designations, the list of individuals and entities to which the restrictions apply reaches a total of 555 individuals and 52 entities.

 

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Financial restrictions and limitations on the Russian government's ability to raise capital on European financial markets: a further measure expands the scope of a measure adopted in 2014 to include Russia, its government, its central bank and any related legal person, entity or body among the entities prohibited from buying, selling, providing investment services or assisting in the issuance or processing of transferable securities and money-market instruments issued after 9 March 2022. It also provides that no new loans or credit can directly or indirectly be made to any legal person, entity or body “designated” previously and after 23 February 2022.

 

More specifically, there is a ban on:

• direct or indirect purchases or sales;
• direct or indirect provision of investment services;
• assistance in the issuance of, or otherwise dealing with transferable securities and money-market instruments issued after 9 March 2022 by Russia and by the Russian government, by the Central Bank of Russia or any entity acting on behalf or at the direction of the Central Bank of Russia;
• directly or indirectly making or being part of any arrangement to make any new loans or credit. Such prohibition shall not apply to loans or credit that are intended to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and any third State, including the expenditure for goods and services that is necessary for executing the export or import contracts.

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Restrictive measures against the two self-proclaimed Donetsk and Lugansk People’s Republics: there is a ban covering the import of goods originating from there into the EU, the direct or indirect provision of financing, financial assistance, insurance and reinsurance related to importation, the acquisition of new real estate, new entities, shares and other securities of an equity nature, the granting of loans or other financing, the creation of joint ventures and any investment services directly related to such activities. No claims for indemnity, compensation or guarantees, submitted by natural or legal persons, entities or bodies “designated” or acting on their behalf shall be satisfied if the claim relates to goods whose import is prohibited. Furthermore, for the enforcement of any claim, the onus of proving that satisfying the claim is not prohibited shall be on the natural or legal person, entity or body seeking it.

 

It is also prohibited to export, sell, supply or transfer goods and technology in the sectors of transport, telecommunications, energy or the prospecting, exploration and production of oil, gas and mineral resources. Finally, it is also prohibited to provide services directly related to tourism activities in the areas concerned.

 

Such measures provide for authorisation schemes for the competent authorities of Member States for:

• (export in the areas specified) the execution until 24 May 2022 of commercial contracts concluded before 23 February 2022 (or of ancillary contracts necessary for the execution of the same, provided that the natural or legal person, entity or body wishing to execute the contract has at least ten working days in advance notified the activity or transaction to the competent authority of the Member State where it is established);
• goods originating in the aforesaid territories made available to Ukrainian authorities for examination and for which preferential origin is verified (certificate of origin in accordance with the EU-Ukraine Association Agreement);
• the performance of obligations arising from contracts concluded before 23 February 2022 (or ancillary contracts necessary for the execution of the same), provided that the competent authority has been informed at least five working days in advance;
• i) consular missions or international organisations enjoying immunities; ii) support of hospitals or other public health institutions providing medical services or civilian education facilities; iii) maintenance in order to ensure the safety of existing infrastructure; iv) any activities necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety, including the safety of existing infrastructure, or on the environment;
• finally, in duly justified cases of emergency, the sale, supply, transfer or export may proceed without prior authorisation, provided that the exporter notifies the competent authority within five working days after the sale, supply, transfer or export has taken place, providing detail about the relevant justification for the sale, supply, transfer or export without prior authorisation;
• (for services related to tourism activities) the prohibitions set out above shall be without prejudice to the execution, until 24 August 2022, of obligations arising from contracts concluded before 23 February  2022 (or ancillary contracts necessary for the execution of the same), on condition that  the competent authority has been informed at least five working days in advance.

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3.1.2. Second package (24 February 2022).

 

Ban on export:  such ban concerns export to Russia of aircraft, spare parts and equipment of the aeronautical and space industry and refining technology for the oil industry. Export restrictions will also affect (civilian and military) dual-use goods.

 

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Economic measures concerning the financial sector: EU banks will be prohibited from accepting deposits from Russian citizens of more than 100,000 Euros and several Russian state companies will have their access to European funding blocked.

 

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Exclusions: luxury goods are among the goods excluded from the sanctions. The rationale for such exclusion seems to lie in the desire to focus more on the technology sector.

 

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Exclusion from the Council of Europe:The Council of Europe, of which Italy holds the presidency, excluded Russia from the list of its members.

 

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3.1.3. Third package (28 February 2022).

 

Economic measures concerning the financial sector: since 2014, EU capital market sanctions have prohibited certain dealings in new debt and new equity issued by certain Russian banks and companies and certain affiliates. Said sanctions have been significantly amended and other measures affecting the financial sphere have been introduced:

• further restrictions have been imposed on the Central Bank of Russia, with a ban on all transactions relating to the management of its reserves and assets;
• four additional banks (Alfa Bank, Bank Otkritie, Bank Rossiya e Promsvyazbank) and eight corporations (Almaz-Antey, Kamaz, Novorossiysk Commercial Sea Port, Rostec, Russian Railways, Sevmash, Sovcomflot and United Shipbuilding Corporation) are now subject to the EU capital markets sanctions;
• dealings in transferable securities or money-market instruments of any maturity issued by such and the previously listed entities will be prohibited and no new loans/credit (of any maturity) can be granted to them (though certain exceptions apply);
• EU banks generally can no longer accept deposits over EUR 100,000 (in total) from Russian persons, entities or such that are residing in or established in Russia, though limited exceptions – some subject to prior authorisation – apply. EU banks must now moreover regularly report on all such Russian deposits exceeding EUR 100,000;
• it will be prohibited to provide services on trading venues for the transferable securities of any state-owned legal entity in Russia, and EU central securities depositories may no longer provide services for transferable securities issued after 12 April 2022 to any Russian persons;
• in addition, no Euro-denominated transferable securities issued after 12 April 2022 can be sold to Russian persons or entities, again subject to certain exceptions;
• lastly, it is forbidden to provide public financing or financial assistance for trade with, or investment in, Russia, except for prior binding financing commitments, trade in food or for agricultural, medical or humanitarian purposes. Financing up to EUR 10 million per project is however still allowed to SMEs established in the EU.

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Trade and investment restrictions: existing trade restrictions on dual-use items have been extended to include a ban on export of all dual-use items, regardless of origin, to any person in Russia or for use in Russia.

 

Such ban also covers related financing or financial assistance, brokering services, technical assistance (including assembly, testing, training and repair) and other services relating to the manufacture, maintenance and use of such items.

 

Exemptions apply (subject to specific notification and authorisation requirements) in certain cases, such as for intergovernmental cooperation, humanitarian purposes or personal use for travel to Russia. Pre-existing contract activities may be permitted under Member State authorisation, to be requested before 1 May 2022.

 

Similarly, the EU has imposed an export ban on a wide range of goods and technology considered to contribute to Russia's development of the defence and security sectors, including related assistance/services. The extensive restrictions involve various items that are not normally covered by EU dual-use controls but which are covered in the US Commerce Control List, such as items for the electronics sector (e.g., microprocessors, semiconductors) and information security, sensors, lasers, navigation/avionics, marine and aerospace/propulsion items.

 

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3.1.4. Fourth package (2 March 2022).

 

On 2 March 2022, the EU Council decided to adopt the following additional measures:

 

SWIFT: prohibition to provide specialist financial messaging services, used for the exchange of financial data (SWIFT), imposed on seven selected Russian banks (i.e. Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, VNESHECONOMBANK (VEB) and VTBANK'), coming into force on the tenth day after publication in the Official Journal of the EU, and also applying to any legal person, entity or body established in Russia whose property rights are directly or indirectly owned for more than 50% by the above-mentioned banks.

 

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Russian Direct Investment Fund: prohibition on investing or holding interest in, or otherwise contributing to future projects co-financed by, the Russian Direct Investment Fund. Derogation  will be allowed in the event that such investment or contribution is due under agreements entered into before 2 March 2022 or under ancillary contracts necessary for the execution of the same.

 

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Euro-denominated banknotes: prohibition on selling, supplying, transferring or exporting Euro-denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the Government and the Central Bank of Russia, or for use in Russia.

 

Such prohibition shall not apply to the sale, supply, transfer or export of Euro-denominated banknotes provided that such sale, supply, transfer or export is necessary for the personal use of natural persons travelling to Russia or members of their families travelling with them or for official purposes of diplomatic missions, consular posts or international organisations in Russia enjoying immunities under international law.

 

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Russian media outlets: the EU Council decided to ban Russian media outlets “Russia Today” and “Sputnik” for disinformation.

 

According to such sanction, it is prohibited for operators to broadcast or to enable, facilitate or otherwise contribute to broadcast, any content by the legal persons, entities or bodies in Annex XV, including through transmission or distribution by any means such as cable, satellite, IP-TV, Internet service providers, internet video-sharing platforms or applications, whether new or pre-installed. Furthermore, any broadcast license or authorisation, broadcast and distribution agreement with the legal persons, entities or bodies under Annex XV is suspended.

 

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The following section regarding the sanctions adopted by foreign countries against Russia was prepared after consulting a variety of state sources and articles from foreign newspapers. Without claiming to be exhaustive, this section has the sole purpose of providing information. The applicability of individual sanctions to specific cases should be checked with competent lawyers in the respective jurisdiction.

 

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3.2. United States.

 

On 24 February 2022 OFAC (US Department of the Treasury’s Office of Foreign Assets Control), in implementation of Executive Order 14024, signed by President Biden, issued expansive sanctions against Russia for its harmful foreign activities, including violation of fundamental principles of international law such as respect for the territorial integrity of sovereign states.

 

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3.2.1. Restrictions on the economic relations with the self-proclaimed independent Republics of Donetsk and Lugansk.

 

The first package of sanctions adopted by the United States imposes an investment freeze and a ban on U.S. persons doing business and financial operations in the self-proclaimed republics of Donetsk and Lugansk (see point 2 of table “Outline of the sanctions imposed by the United States and the European Union”).

 

A series of “General Licenses” attached to the measure provides for exemptions concerning some basic necessities, essential services and the activities of International Organizations, namely authorising:

• a wind down for import and export transactions involving goods and services covered by agreements in effect prior to 21 February 2022, to be closed by 23 March 2022 (License 17);
• exportation and reexportation, involving the two regions, of agricultural commodities, medicine, biomedical equipment and parts thereof, drugs for prevention, diagnosis and treatment of COVID-19 (License 18);
• any transactions related to the postal and communications sector, excluding terrestrial or satellite telecommunications equipment (Licence 19);
• any transactions conducted by International Organisations such as the United Nations (and its main organisations), BERS, African Development Bank Group, Asian Development Bank or Red Cross (Licence 20);
• any non-commercial transactions or personal remittances (Licence 21);
• any exportation of services incident to the exchange of personal communications over the Internet (Licence 22).

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3.2.2. Restrictions affecting the banking system.

 

The Treasury took action against the largest Russian financial institutions, including the Public Joint Stock Company Sberbank of Russia (Sberbank), VTB Bank Public Joint Stock Company (VTB Bank) and PSB, prohibiting any dealings with them by freezing their assets held in the United States.

 

From 26 March 2022, according to the provisions of Directive 2 under Executive Order 14024, “Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions”, U.S. financial institutions are prohibited from:

• opening or maintaining a correspondent account or payable-through account for or on behalf of foreign financial institutions determined to be subject to the prohibitions of the Russia-related CAPTA Directive, or their property or interests in property; and
• processing any transaction involving foreign financial institutions determined to be subject to the prohibitions of the Russia-related Directive, or their property or interests in property.

Accordingly, U.S. financial institutions must reject such transactions unless licensed or otherwise authorised by the Office of Foreign Assets Control.

 

OFAC has also imposed blocking sanctions on three additional major Russian financial institutions: Otkritie, Novikom and Sovcom.

 

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3.2.3. Measures limiting Russian financial flows.

 

OFAC, by Directive 3 under Executive Order 14024, “Prohibitions Related to New Debt and Equity of Certain Russia-related Entities”, prohibited the subscription of bonds issued by the Central Bank, the National Wealth Fund and the Ministry of Finance of the Russian Federation.

 

The purpose of the Directive is to prohibit certain dealings and transactions by US entities, or within the United States, listed in Annex 1 to the Russia-related Entities Directive, in new debt of longer than 14 days maturity or new equity of Russia-related entities.

 

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3.2.4. Ad personam restrictions.

 

On 25 February 2022, the United States imposed sanctions directly on President of the Russian Federation Vladimir Putin and Minister of Foreign Affairs Sergei Lavrov as well as on other members of Russia's Security Council. Minister of Defence of the Russian Federation Sergei Shoigu and Chief of the General Staff of the Russian Armed Forces, First Deputy Defence Minister and General of the Army Valery Gerasimov, considered to be directly responsible for Russia's unprovoked and illegal further invasion of Ukraine.

 

The above-mentioned sanctions involve:

• blocking and reporting to OFAC all property and interests in property of the aforementioned individuals that are in the United States or in the possession or control of U.S. persons;
• blocking any entities that are directly or indirectly owned 50 percent or more by one or more blocked persons.

In addition, all transactions by U.S. persons or within (or transiting) the United States  that involve any property or interests in property of designated or otherwise blocked persons are prohibited, unless authorised by a general or specific license issued by OFAC, or otherwise exempt, including the making of any contribution or provision of funds, goods or services by, to, or for the benefit of, any blocked person and the receipt of any contribution or provision of funds, goods or services from any such person.

 

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3.2.5. Restrictions against the Central Bank of Russia and Russian Sovereign Funds.

 

On 28 February 2022, OFAC prohibited United States persons from engaging in transactions with the Central Bank of the Russian Federation and the Ministry of Finance of the Russian Federation, thereby immobilising any assets of the Central Bank held in the United States or by U.S. persons, wherever located.

 

Among the sanctions in said package are those targeting the Russian Direct Investment Fund (RDIF), a key Russian sovereign wealth fund, and its Chief Executive Officer (CEO), Kirill Dmitriev.

 

Directive 4 expands the scope of the previous prohibitions contained in Directive 1A of 22 February 2022, imposing prohibitions on participation in the primary and secondary markets for rouble- or non-rouble-denominated bonds issued after 1 March 2022. It more broadly prohibits all transactions, unless otherwise provided for, involving any of said three entities.

 

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3.3. United Kingdom.

 

3.3.1. First package (22 February 2022).

 

The United Kingdom announced and made effective new sanctions on Russian banks (including Bank Rossiya, Black Sea Bank for Development and Reconstruction, Genbank JSC, IS Bank, Promsvyazbank PJSC) and individuals (including Boris Romanovich Rotenberg, Igor Arkadyevich Rotenberg, Gennadiy Nikolayevich Timchenko).

 

As a result of their designation, the aforementioned legal entities and individuals are both subject to a UK asset freeze, with individuals being also subject to a travel ban.

 

Economic resources that are owned, held or controlled by said persons, and that are under UK jurisdiction must therefore be frozen, and no funds or economic resources can be made available (directly or indirectly) to or for the benefit of said persons, unless permitted by a licence issued by HM Treasury. In addition, “economic resources” are broadly defined to include any assets that can be used to obtain funds, goods or services - for example, real estate assets. The asset freeze also extends to entities owned or controlled (directly or indirectly) by said designated persons. Under UK rules, the funds and economic resources of such entities must also be frozen, and funds and economic resources cannot be made available to such entities.

 

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Closure of access to ports: the first category of measures relates to the decision of the UK Government to prohibit access to UK ports by Russian ships.

 

Among the measures implemented by the United Kingdom against Russia is the decision to completely close access to UK ports for ships flying the Russian flag.

 

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3.3.2. Second package (24 February 2022).

 

By such sunction package, asset freeze was also imposed on VTB Bank, 5 state-owned defence enterprises and an additional 5 individuals.

 

The UK Government then announced some further measures, including the following:

• expanding the pool of banks whose assets were to be frozen, to prevent them from accessing Sterling and clearing payments through the UK, cutting off their access to UK financial markets;
• imposing a £50,000 limit on UK bank accounts held by Russian nationals;
• enhancing export controls, including a prohibition on exporting high-end and critical technical equipment and components in the electronics, telecommunications, aerospace and other sectors.

The above sanctions were then fully extended to Belarus, Crimea and the Donetsk and Luhansk regions.

 

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3.3.3. Third package (28 February 2022).

 

A further extension of the black list of Russian banks was announced on 28 February 2022, involving VEB, Bank Otkritie Financial Corporation PJSC and PJSC Sovocombank.

 

In addition, the Foreign Minister provided further details about two new legal provisions on sanctions to be submitted to Parliament shortly:

 

1) the first one introducing new authority in relation to Russia's financial sector, including powers to prevent Russian banks from clearing payments in Sterling, mostly aimed at targeting Sberbank.

 

2) the second one banning exports to Russia in a number of critical sectors, including high-tech equipment such as microelectronics, marine and shipping equipment.

 

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3.4. Closure of UK, EU and US airspace and aviation industry sanctions.

 

Following the events in Ukraine, the EU, the UK, the US and many other countries have implemented a number of measures that are expected to have a significant impact on the aviation and aircraft financing industry.

 

Such measures are expected to pose significant logistical and financial challenges (with immediate ramifications) to airlines operating to and from Russia as well as to lessors and financiers who have Russian airlines in their portfolios. In this sense, first and foremost, European countries are one after another closing their airspace to Russian airlines.

 

As far as Italy is concerned, the official decision was made to close its airspace to Russia flights on 27 February 2022 from 3pm.

 

In addition to Italy, Belgium and Germany, Bulgaria, the Czech Republic, Estonia, Poland, Slovenia, Lithuania, Latvia, Romania, the United Kingdom, the Netherlands, Canada, Austria, Malta, Spain and France, Denmark, Ireland and Finland have also announced the closure of their skies to Russian aircraft, including private jets.

 

On Monday 28 February 2022, the EU also banned, with immediate effect, Russian-owned, Russian-registered or Russian-controlled aircraft (owned, leased or otherwise controlled by Russian natural or legal persons) from landing in, taking off from, or flying over, the EU. In addition, by the end of March 2022, European lessors will have to terminate the leasing of, and recover, hundreds of $5 billion-worth aircraft.

 

The aforementioned restrictions have also been accompanied by the restriction on the suspension of foreign carriers' permits. For example, on 24 February 2022, the Civil Aviation Authority of the United Kingdom suspended the foreign carrier permit held by Aeroflot. As a countermeasure for the UK sanctions, the Russian Federation restricted all aircraft owned, leased or operated by a person associated with the United Kingdom or registered in the United Kingdom from entering its airspace (including transit flights) and landing on its territory.

 

In response to the airspace restrictions implemented by Western countries, the Russian Federation closed off its airspace and restricted landing on its territory for air carriers from 36 countries and air carriers registered in said countries.

 

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3.5. Switzerland.

 

On 28 February 2022, Switzerland decided to adopt the sanctions imposed by the EU on 23 and 25 February 2022. The assets of the sanctioned natural and legal persons are frozen with immediate effect. The financial sanctions now extend to Russian President Vladimir Putin, Prime Minister Mikhail Mishustin and Foreign Minister Sergey Lavrov.

 

Switzerland implemented the following new sanctions:

 

Assets freeze:

• assets belonging to or under the control of natural persons, companies and entities listed in Annex 3 of the Ordinance are frozen with immediate effect (the list includes Russian President Vladimir Putin, Prime Minister Mikhail Mishustin, Foreign Minister Sergei Lavrov and the members of the Russian Parliament);
• the SECO (State Secretariat for Economic Affairs) may exceptionally authorise specific transactions in limited cases;
• the direct or indirect supply of goods or economic resources to the natural persons, companies and entities listed in Annex 3 is prohibited;
• entities holding or managing assets that should be frozen must be declared to the SECO.

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Financial restrictions:

• prohibition on the issuance of certain financial instruments (and related assistance) with a maturity of more than 30 days issued by specific targeted banks and entities in Russia, or banks and entities outside Switzerland controlled by such targeted banks and entities or acting on their behalf or under their instructions;
• prohibition on the issuance of financial instruments (and related assistance) issued by Russia, its government, the Central Bank of Russia, or any legal person, entity or body acting on their behalf or under their instructions;
• prohibition on the granting of certain loans (directly or indirectly) with maturity of more than 30 days to specific banks and targeted entities in Russia, or banks and entities outside Switzerland controlled by, or acting on behalf or under the instructions of, such banks and targeted entities. Certain exceptions are provided for loans agreed before 28 February 2022;
• prohibition on the trading of certain financial instruments.

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Measures concerning specific territories:

• the ban on imports, exports and investments concerning Crimea and Sevastopol, in force since 2014, was extended to the areas of the Ukrainian oblasts of Donetsk and Luhansk, which are not controlled by the Ukrainian government.

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The following trade restrictions provided for in 2014 remain in place:

• restrictions on dual-use goods and specific military goods;
• ban on import of firearms, munitions, explosive materials, pyrotechnics and gunpowder from Russia or Ukraine;
• compulsory declaration for certain goods and services of the oil industry.

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3.6. Japan.

 

On 26 February 2022, “Measures relating to the situation in Ukraine under the foreign exchange and foreign trade law” were announced.

 

In essence, a series of sanctions and measures relating to the Republic of Donetsk and the Republic of Luhansk were implemented, specifically concerning:

 

Asset freeze:

• restrictions on payment: a permit is required for payments to 24 individuals linked to the Donetsk Republic and Luhansk Republic and Bank Rossiya designed by the MOFA (Ministry of Foreign Affairs of Japan) communication. Payments requiring authorisation include (i) payment from Japan by a Japan or non-Japan resident to any designated persons and (ii) payment from anywhere by a Japan resident to any designated personss.
• restrictions on capital transactions: a permit is required for capital transactions (i.e. contract of deposit, trust and money loan) by a Japan Resident with designated individual and entities.

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Export and Import Restriction:

• approval is required for export of all goods to the Donetsk and Luhansk Regions and for import of all goods originating in the “Covered Regions”.

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Japan has also implemented the following measures in relation to Russia:

• restriction on issuance and transactions for new Russian sovereign debt;
• restriction on issuance and offering: a permit is required for the issuance and offering of Russian sovereign debt in Japan by the Government of the Russian Federations, the government agencies of the Russian Federation and the Central Bank of the Russian Federation;
• acquisition and transactions restriction: a permit is necessary for the acquisition by a Japan Resident of new Russian sovereign debt (issued on or after 26 February 2022) from a non-Japan Resident, or for its transfer to a non-Japan Resident;
• service and transactions restriction: a permit is required for the provision of services and benefits by a Japan Resident undertaken for the purpose of issuing or offering for subscription new Russian sovereign debt in Japan.

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Restriction on issuance of securities by designated Russian banks in Japan:

• a permit is required for the issuance or offering for subscription of securities (limited only to debt securities with a maturity of more than 30 days) issued in Japan by Sberbank, VTB Bank, Bank for Development and Foreign Economic Affairs (Vnesheconombank), Gazprombank and Russian Agricultural Bank (“designated Russian banks”);
• a permit is required for the provision of services and benefits by a Japan resident for issuance or offering for subscription of securities (limited only to debt securities with a maturity of more than 30 days) issued by the designated Russian banks;
• strengthening of control on export of relevant items and services subject to Multilateral Export Control Regimes to Russia;
• examination procedures for exports of relevant articles and services subject to Multilateral Export Control Regimes to Russia have been strengthened as a result of the removal of license exemptions for Russia.

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3.7. Australia.

 

On 23 February 2022, Australia announced the imposition of sanctions against Russian individuals, organisations and banks as part of an international effort to target Russia for its actions against Ukraine.

 

According to the statements made by the Australian Prime Minister, such measures include:

• travel bans and financial sanctions on eight members of Russia's Security Council;
• targeted financial sanctions on Rossiya Bank, Promsvyazbank, IS Bank, Genbank and the Black Sea Bank for Development and Reconstruction (in addition to existing restrictions on VEB);
• future extension of existing sanctions applying to Crimea and Sevastopol to the regions of Donetsk and Luhansk, prohibiting trade in the transport, energy, telecommunications and oil, gas and mineral sectors.

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3.8. Canada.

 

On 22 February 2022, Prime Minister Justin Trudeau announced that Canada would implement a “first round” of sanctions. In a press release, he announced the following measures:

• restrictions on members of the Russian State Duma who voted for the decision to recognise the independence of Donetsk and Luhansk;
• a ban on dealings with the non-government controlled areas of the Donetsk and Luhansk oblasts, involving Canadians being prevented from engaging in specific transactions and activities in said regions;
• new bans on direct and indirect dealings in Russian sovereign debt; and
• sanctions on Russian major financial institutions, including the RDIF.

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4. Business recommendations for companies.

The sanctions scenario is constantly and rapidly evolving and often appears to be complex.

 

With this in mind, it is nevertheless possible to provide some general recommendations:

 

1) Continuous updating on any sanctions that may from time to time be implemented is recommended. In-depth assessment of any applicable sanctions or restrictions is crucial, as it may be necessary to adjust or terminate relations with certain counterparts or in certain geographical areas such as Russia or Belarus.

 

2) It is suggested to assess the pending legal relationships (including with respect to investors, lenders, assets and contractual counterparties), which may, therefore, have a direct or indirect link with the relevant sanctions;

 

3) It is suggested to consider whether it is necessary to adjust any of said links and thus to review financing and/or trade agreements;

 

4) Counterparty screening is suggested with respect to the established sanctions lists, also taking into account the various potentially-relevant countries.

 

 

 

This article is for information purposes only and is not, and cannot be intended as, a professional opinion on the topics dealt with. For further information please contact Lorena Possagno, Luca Dettori and Ekaterina Aksenova. 

 

 

 

Updated 4 march 2022