06 april 2022

In response to Russia's invasion of Ukraine, the international community - the USA, European Union, Great Britain, Canada, Australia and other countries - introduced broad packages of sanctions against it. Our INTELLECT team monitors the new restrictions imposed and tries to keep you informed on the updates. We will also be happy to help your business deal with restrictive measures and to develop a plan for managing your assets.

• Economic sanctions >>
• Energy sector sanctions >>
• Financial sector sanctions >>
• Technology sanctions >>
• Personal sanctions >>
• Closed ports and sky >>
• Sanctions against state-owned or sponsored media >>
• Political sanctions >>

Economic sanctions

→ European Union

Restrictions on economic relations with the non-government controlled areas of the Donetsk and Luhansk oblasts:

• in particular an import ban on goods from the non-government controlled areas of the Donetsk and Luhansk oblasts was introduced,
• restrictions on trade and investments related to certain economic sectors,
• a prohibition to supply tourism services, and
• an export ban for certain goods and technologies.

These measures are in place until 24 February 2023.

Denying Russia most favoured nation status.

The EU, together with other World Trade Organization (WTO) members, agreed to deny Russian products and services most favoured nation treatment in EU markets. This will suspend the significant benefits that Russia enjoys as a WTO member.

The fifth round of sanctions against Russia over its military aggression against Ukraine includes:

• further export bans, targeting jet fuel and other goods such as quantum computers and advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment, and new import bans on products such as: wood, cement, fertilisers, seafood and liquor. The agreed export and import bans only account for EUR 10 billion and EUR 5.5 billion respectively.
• a series of targeted economic measures intended to strengthen existing measures and close loopholes, such as: a general EU ban on participation of Russian companies in public procurement in member states, the exclusion of all financial support to Russian public bodies.

→ USA

Restrictions on economic relations with the non-government controlled areas of the Donetsk and Luhansk oblasts.

Accordingly, the following are prohibited:

• new investment in the so-called DNR or LNR regions of Ukraine or such other regions of Ukraine as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State (collectively, the "Covered Regions"), by a United States person, wherever located;
• the importation into the United States, directly or indirectly, of any goods, services, or technology from the Covered Regions;
• the exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any goods, services, or technology to the Covered Regions; and
• any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States.

Restrictions on the export, reexport, and transfer (in country) of luxury goods to all end users in the Russian Federation and to certain Russian oligarchs and malign actors located worldwide.

The U.S. Commerce Department's Bureau of Industry and Security (BIS) imposed significant restrictions on persons and organizations within Russia that have the financial resources to purchase U.S.-origin luxury goods. This rule imposes additional costs on certain Russian oligarchs and malign actors (regardless of their location) who have been designated by the Department of the Treasury as Specially Designated Nationals in connection with their support for the Russian government. The rule provides a list of U.S.-origin luxury goods that are impacted by sanctions and includes certain spirits, tobacco products, clothing items, jewelry, vehicles, and antique goods.

On the April 6, 2022 a new package of sanctions was adopted. 

Prohibiting new investment in the Russian Federation:

President Biden signed a new Executive Order that includes a prohibition on new investment in Russia by U.S. persons wherever located. This action was built on the decision made by more than 600 multinational businesses to exit from Russia. The exodus of the private sector includes manufacturers, energy companies, large retailers, financial institutions, as well as other service providers such as law and consulting firms.

Full blocking sanctions on critical major Russian state-owned enterprises. This will prohibit any U.S. person from transacting with these entities and freeze any of their assets subject to U.S. jurisdiction, thereby damaging the Kremlin’s ability to use these entities it depends on to enable and fund its war in Ukraine. The Department of Treasury will announce these entities tomorrow.

At the same time, the White House stated that it will uphold its commitment to support sectors essential to humanitarian activities.

USA promised to reiterate its commitment to exempting essential humanitarian and related activities that benefit the Russian people and people around the world: ensuring the availability of basic foodstuffs and agricultural commodities, safeguarding access to medicine and medical devices, and enabling telecommunications services to support the flow of information and access to the internet which provides outside perspectives to the Russian people. These activities are not the target of sanctions efforts, and U.S. and Western companies can continue to operate in these sectors in Russia. 

→ United Kingdom

On 15 March, 2022, UK Government has announced a ban on exports to Russia of high-end luxury goods, while also hitting hundreds of key products with new import tariffs.

• UK to deny Russia access to Most Favoured Nation tariff for hundreds of their exports, depriving both nations key benefits of WTO membership;
• UK government publishes initial list of goods worth £900 million - including vodka - which will now face additional 35 percent tariff, on top of current tariffs;
• UK to ban exports of luxury goods to Russia alongside G7 allies.

→ Australia

Australia will also extend to the Donetsk and Luhansk regions of Ukraine the sanctions measures already applied to Crimea and Sevastopol.

These sanctions measures target exports and commercial activity in relation to the transport, telecommunications, energy and exploitation of oil, gas and mineral reserve sectors; and prohibit all imports.

These sanctions measures will apply to the Donetsk and Luhansk regions of Ukraine from 28 March 2022. This will allow Australians and Australian entities with interests in those regions to consider whether their activities are captured by the sanctions measures; and if they are, either to cease their activities, or to apply to the Minister for Foreign Affairs for a sanctions permit to continue their activities.

Energy sector sanctions

The US and UK are banning Russian oil, and the European Union is developing a strategy to move away from dependence on Russian gas.

→ European Union

• An EU import ban on those steel products currently under EU safeguard measures, amounting to approximately € 3.3 billion in lost export revenue for Russia. Increased import quotas will be distributed to other third countries to compensate.
• A far-reaching ban on new investment across the Russian energy sector, with limited exceptions for civil nuclear energy and the transport of certain energy products back to the EU.

The fifth round of sanctions against Russia over its military aggression against Ukraine includes:

• a prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia, as from August 2022. Imports of coal into the EU are currently worth EUR 8 billion per year.

→ USA

United States introduced an import-ban of Russian oil, liquefied natural gas, and coal to the United States that includes.

• The importation into the United States of Russian crude oil and certain petroleum products, liquefied natural gas, and coal. Last year, the U.S. imported nearly 700,000 barrels per day of crude oil and refined petroleum products from Russia and this step will deprive Russia of billions of dollars in revenues from U.S. drivers and consumers annually.
• New U.S. investment in Russia's energy sector, which will ensure that American companies and American investors are not underwriting Vladimir Putin's efforts to expand energy production inside Russia.
• Americans will also be prohibited from financing or enabling foreign companies that are making investment to produce energy in Russia.

→ United Kingdom

The UK will phase out imports of Russian oil in response to Vladimir Putin's illegal invasion of Ukraine by the end of the year 2022.

The phasing out of imports will not be immediate, but instead allows the UK more than enough time to adjust supply chains, supporting industry and consumers. The government will work with companies through a new Taskforce on Oil to support them to make use of this period in finding alternative supplies.

→ Australia

Import prohibition:

Australia will prohibit the import of oil, refined petroleum products, natural gas, coal and other energy products from Russia. The Autonomous Sanctions (Import Sanctioned Goods—Russia) Designation 2022 (the Import Designation) designates as 'import sanctioned goods' for Russia all goods in Chapter 27 of the Combined Australian Customs Tariff Nomenclature and Statistical Classification. This document is available on the Australian Border Force website.

The Import Designation will commence on 26 April, 45 days after it was registered on the Federal Register of Legislation on 11 March.

Export prohibition:

Australia has prohibited the export of aluminium ores (including bauxite), alumina and related products to Russia. The Autonomous Sanctions (Export Sanctioned Goods—Russia) Designation 2022 (the Export Designation) designates these products as 'export sanctioned goods' for Russia. The Export Designation commenced on 20 March 2022.

Financial sector sanctions

→ European Union

Sanctions in the form of cutting Russia's access to capital markets of the EU, increasing borrowing costs for the sanctioned entities and gradually eroding Russia's industrial base by:

• prohibiting any form of lending to and buying of securities issued by certain Russian banks and government (including the Central Bank)
• imposing a full asset freeze and financing ban on three Russian banks
• a full prohibition of any transactions with certain Russian State-owned enterprises across different sectors - the Kremlin's military-industrial complex
• clarifying that crypto assets fall under the scope of "transferable securities"
• a ban on the rating of Russia and Russian companies by EU credit rating agencies and the provision of rating services to Russian clients
• targeting the Russian elite by banning their big deposits in EU banks

Blocking Russia's EU-held foreign exchange reserves by:

• prohibiting investing in projects co-financed by the Russian Direct Investment Fund
• provision of euro-denominated banknotes (selling, supplying, transfering or exporting) to Russia (including the government and the Central Bank of Russia, or for use in Russia) has also been prohibited
• agreeing to exclude key Russian banks from the SWIFT system, the world's dominant financial messaging system. It shall be prohibited as of 12 March 2022 to provide specialised financial messaging services, which are used to exchange financial data, to the legal persons, entities or bodies listed or to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed:

1. Bank Otkritie
2. Novikombank
3. Promsvyazbank
4. Bank Rossiya
5. Sovcombank
6. VNESHECONOMBANK (VEB)
7. VTB BANK

In addition, the EU has also included the following organizations in the sanctions lists. They are subject to the asset freeze and prohibition to providing funds and managing transactions:

From February 28, 2022:

1. Gas Industry Insurance Company SOGAZ

From February 25, 2022:

1. Alfa Bank
2. Bank Otkritie
3. Bank Rossiya
4. Promsvyazbank
5. Almaz-Antey
6. Kamaz
7. Novorossiysk Commercial Sea Port
8. Rostec (Russian Technologies State Corporation)
9. Russian Railways
10. JSC PO Sevmash
11. Sovcomflot
12. United Shipbuilding Corporation

From February 23, 2022:

1. Internet Research Agency
2. Bank Rossiya
3. PROMSVYAZBANK
4. VEB.RF

The fifth round of sanctions against Russia over its military aggression against Ukraine includes:

• an extended prohibition on deposits to crypto-wallets, and on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states to Russia, or to any natural or legal person, entity or body in Russia.

In addition, the EU has also included the following organizations in the sanctions lists. They are subject to the asset freeze and prohibition to providing funds and managing transactions [сюда вставить]:

From March 15, 2022:

• ROSNEFT AERO (RN AERO)
• JSC ROSOBORONEXPORT
• JSC NPO High Precision Systems
• JSC Kurganmashzavod
• JSC Russian Helicopters
• PJSC United Aircraft Corporation
• JSC United Shipbuilding Corporation
• JSC Research and Production Corporation URALVAGONZAVOD
• JSC Zelenodolsk Shipyard [A.M. Gorky Zelenodolsk Plant]

→ USA

New debt and equity restrictions on thirteen of the most critical major Russian enterprises and entities (Directive 3).

This includes restrictions on all transactions in, provision of financing for, and other dealings in new debt of greater than 14 days maturity and new equity issued by thirteen Russian state-owned enterprises and entities:

1. Sberbank
2. AlfaBank
3. Credit Bank of Moscow
4. Gazprombank
5. Russian Agricultural Bank
6. Gazprom
7. Gazprom Neft
8. Transneft
9. Rostelecom
10. RusHydro
11. Alrosa
12. Sovcomflot
13. Russian Railways

These entities, including companies critical to the Russian economy with estimated assets of nearly $1.4 trillion, will not be able to raise money through the U.S. market — a key source of capital and revenue generation, which limits the Kremlin's ability to raise money for its activity.

Correspondent and Payable-through Account Sanctions on Sberbank

To implement sanctions on Sberbank, OFAC issued Directive 2 under E.O. 14024, "Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions" (the "Russia-related CAPTA Directive"). This directive prohibits U.S. financial institutions from:

• opening or maintaining of a correspondent account or payable-through account for or on behalf of any entity determined to be subject to the prohibitions of the Russia-related CAPTA Directive, or their property or interests in property; and
• the processing of transactions involving any such entities determined to be subject to the Russia-related CAPTA Directive, or their property or interests in property. Accordingly, U.S. financial institutions must reject such transactions unless exempt or authorized by OFAC.

Full Blocking Sanctions on VTB

OFAC has imposed full blocking sanctions on VTB Bank, Russia's second-largest financial institution, which holds nearly 20 percent of banking assets in Russia. VTB Bank is majority-owned by the GoR, which deems it to be a systemically important financial institution. By imposing these sanctions, assets held in U.S. financial institutions will be instantly frozen and inaccessible to the Kremlin. In addition, 20 VTB Bank subsidiaries were designated pursuant to E.O. 14024 for being owned or controlled by, directly or indirectly, VTB Bank. These subsidiaries include banks, holding companies, and other financial companies located in Russia and eight other countries. All entities owned 50 percent or more, directly or indirectly, by VTB Bank are subject to blocking, even if not identified by OFAC.

Full blocking sanctions on three other major Russian financial institutions: Bank Otkritie, Sovcombank OJSC, and Novikombank and 34 subsidiaries. These sanctions freeze any of these institutions' assets touching the U.S financial system and prohibit U.S. persons from dealing with them.

On the April 6, 2022 a new package of sanctions was adopted.

Full blocking sanctions on Russia's largest financial institutions:

• Sberbank
• Alfa Bank

This involves freezing all assets touching the U.S financial system and prohibiting U.S. persons from doing business with them.

→ United Kingdom

On 15 March 2022 the Foreign, Commonwealth and Development Office updated the UK Sanctions List on GOV.UK and included the following organizations to it:

1. Rosneft Aero
2. JSC Zelenodolsk Shipyard

These entries added to the consolidated list are now subject to an asset freeze.

A consolidated list of 350 individuals and organization published on March 15, 2022, providing for the freezing of funds and economic resources of certain entities involved in destabilising Ukraine, included:

1. Gas industry insurance company SOGAZ
2. Geopolitica
3. Internet research agency
4. New Eastern outlook
5. Oriental review

→ Japan

Japan introduced sanctions in the form of freezing assets of three Russian banks (VEB.RF, Promsvyazbank, Bank Rossiya) in Japan.

→ Australia

Under the latest sanctions, Australia included on its list:

• Russian National Wealth Fund
• Sberbank
• Gazprombank
• VEB
• VTB
• Rosselkhozbank
• Sovcombank
• Novikombank
• Alfa-Bank
• Credit Bank of Moscow

Technology sanctions

→ USA

Russia-wide denial of exports of sensitive technology, primarily targeting the Russian defense, aviation, and maritime sectors to cut off Russia's access to cutting-edge technology.

In addition to sweeping restrictions on the Russian-defense sector, the United States government will impose Russia-wide restrictions on sensitive U.S. technologies produced in foreign countries using U.S.-origin software, technology, or equipment. This includes Russia-wide restrictions on semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics and maritime technologies.

Sweeping restrictions on Russia's military.

This includes measures against military end users, including the Russian Ministry of Defense. Exports of nearly all U.S. items and items produced in foreign countries using certain U.S.-origin software, technology, or equipment will be restricted to targeted military end users. These comprehensive restrictions apply to the Russian Ministry of Defense, including the Armed Forces of Russia, wherever located.

→ Japan

From March 18, 2022 the Japanese government banned the export of high-tech products to Russia. 57 kinds of products and technologies including semiconductors and communication equipment will be included in the target. It will coordinate with the United States and Europe to seek attacks on Russia's military, shipbuilding, aerospace and other fields. It will be implemented after the revision of government decrees based on Japan's foreign exchange and foreign trade law. The objects prohibited from export include 31 kinds of products and 26 kinds of software and technologies, such as semiconductors, signal processing equipment, communication equipment, sensors, radar and navigation equipment. Japan's semiconductor exports to Russia were originally small, and most of them are considered to be restricted.

Sanctions were also imposed on exports to Russian military-related entities, on exports of controlled items listed on the internationally agreed list and of other dual-use goods such as semiconductors.

→ European Union

New restrictions were introduced on the export of maritime navigation and radio communication technology. Russian Maritime Register of Shipping was added to the list of state-owned enterprises subject to financing limitations and a prior information sharing provision for exports of maritime safety equipment was as well introduced.

Existing export controls on dual-use goods was sharpened to target sensitive sectors in Russia's military industrial complex, and limiting Russia's access to crucial advanced technology, such as:

• drones and software for drones
• software for encryption devices
• semiconductors and
• advanced electronics.

Similar restrictions are expected to be introduced by Australia, Canada, United Kingdom and New Zealand.

Personal sanctions

Personal sanctions are imposed on a limited number of people - politicians, representatives of state media and businesses who are directly related to key sectors of the Russian economy, as well as on their family members. These restrictive measures include the freezing of foreign assets of these individuals, the prohibition of providing them funds or loans, and the ban on travel and transit through the countries that have imposed them, and do not apply to individuals not named on the list.

Closed ports and sky

Countries that deny permission to land in, take off from or overfly their territories to any aircraft operated by Russian air carriers, including as a marketing carrier, or to any Russian registered aircraft, or to non-Russian registered aircraft which are owned or chartered, or otherwise controlled by a Russian legal or natural person:

• 27 EU countries
• Albania
• Canada
• Norway
• Switzerland
• Iceland
• UK
• USA

Countries that closed ports to Russian ships:

• Great Britain
• Canada

Britain and Canada closed ports to Russian ships on March 1. Britain banned any ship with Russian connections from entering its ports, while Canada said its ban also applied to fishing boats in its internal waters.

The fifth round of sanctions against Russia over its military aggression against Ukraine includes:

• a prohibition to provide access to EU ports to vessels registered under the flag of Russia. Derogations are granted for agricultural and food products, humanitarian aid, and energy.
• a ban on any Russian road transport undertaking preventing them from transporting goods by road within the EU, including in transit. Derogations are nonetheless granted for a number of products, such as pharmaceutical, medical, agricultural and food products, including wheat, and for road transport for humanitarian purposes.

Sanctions against state-owned or sponsored media

European Union:

As of 2 March 2022, it is prohibited to "broadcast [...] any content" of the Russian state-sponsored media:

• RT- Russia Today English
• RT- Russia Today UK
• RT - Russia Today Germany
• RT - Russia Today France
• RT- Russia Today Spanish

On 23 February 2022, the editor-in-chief of the English language television news network RT, Margarita Simonyan, had already been sanctioned with a travel ban and asset freeze.

"Broadcasting" is defined in the regulation to include "transmission or distribution by any means such as cable, satellite, IP-TV, internet service providers, internet video-sharing platforms or applications". Moreover, any "broadcasting licence or authorisation, transmission and distribution arrangement" of RT and Sputnik is to be suspended.

United Kingdom

Russia Today has UK broadcast licence revoked by Ofcom

On March 18, 2022 UK media regulator Ofcom has revoked RT's licence to broadcast in the UK, with immediate effect. This decision was taken on the basis that RT's licensee, ANO TV Novosti, was not considered fit and proper to hold a UK broadcast licence. The decision also comes amid 29 ongoing investigations by Ofcom into the due impartiality of RT's news and current affairs coverage of Russia's invasion of Ukraine.

Political sanctions

The Russian Federation is excluded from the Council of Europe

In an extraordinary meeting, the Committee of Ministers decided, in the context of the procedure launched under Article 8 of the Statute of the Council of Europe, that the Russian Federation ceases to be a member of the Council of Europe after 26 years of membership.

• On 15 March, the Parliamentary Assembly unanimously adopted an Opinion which considered that the Russian Federation can no longer be a member State of the Organisation.
• On 15 March, the Government of the Russian Federation informed the Secretary General of its withdrawal from the Council of Europe in accordance with the Statute of the Council of Europe and of its intention to denounce the European Convention on Human Rights.
• On 10 March, the Committee of Ministers decided to consult the Parliamentary Assembly on potential further use of Article 8 of the Statute.
• On 25 February, following an exchange of views with the Parliamentary Assembly, the Committee of Ministers decided to launch the procedure provided by Article 8 of the Statute and agreed to suspend the Russian Federation from its rights of representation in the Council of Europe, in accordance with its relevant Resolution on legal and financial consequences on the suspension.

European Union

Visa restrictions

In February 2022, the EU decided that diplomats, other Russian officials and business people are no longer able to benefit from visa facilitation provisions, which allow privileged access to the EU. This decision doesn't affect ordinary Russian citizens. 

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