UK, EU and US sanctions on Russia

UK, EU and US Sanctions on Russia and Belarus update as of 27 June 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 27 June)
2. A 5-step checklist for assessing how your activities may be affected
3. A Sanctions Summary

1. WHAT'S NEW

UK

• On 20 June 2024, the UK issued General Licence INT/2024/4836676 relating to payments to the Financial Conduct Authority (“FCA”). The General Licence allows designated persons to make permitted payments to the FCA or for a person to make such a payment on behalf of a designated person. Permitted payments are defined as being all payments required to be made under any enactment, except for the payment of certain fees. The General Licence also includes reporting and record-keeping requirements.
• On 13 June 2024, the UK announced 50 new sanctions designations and specifications, in a co-ordinated action with G7 partners. Designated targets include:
  • Ships in Putin's shadow fleet, used by Russia to circumvent UK and G7 sanctions when trading Russian oil. The listings represent the UK's first sanctions targeting the shadow fleet;
  • Institutions at the heart of Russia's financial system, including the Public Joint Stock Company Moscow Exchange Group (the Moscow Stock Exchange) and the National Settlement Depository;
  • Institutions supporting Russia's energy sector, including six entities operating or supporting the Russian Liquefied Natural Gas (“LNG”) sector and two entities involved in the Russian civil nuclear sector; and
  • Suppliers supporting Russia's military production, including 21 suppliers of munitions, machine tools, microelectronics, logistics or other supplies to the Russian military. Suppliers targeted include entities in China, Israel, Kyrgyzstan and Turkey.
• On 11 June 2024, the Court of Appeal gave judgment in Celestial Aviation Services Ltd v UniCredit Bank. The appeal follows the judgment of the High Court, which held that UniCredit's obligation to make payment under letters of credit ("LCs") in connection with leases of aircraft to Russian companies would not breach Regulation 28 of the UK Russia sanctions regulations. Taking a broader approach, the Court of Appeal overturned the High Court judgment and held that payment under the LCs would be prohibited by Regulation 28, as payment would be in connection with the leases (which had the objective of supplying restricted goods to Russia). Within its reasoning, the Court said that Regulation 28 is a "blunt instrument that is intended to cast the net sufficiently wide to ensure that all objectionable arrangements are caught, such that the overall purpose of putting pressure on Russia is achieved".

EU

• On 24 June 2024, the EU adopted its 14th package of sanctions against Russia. The main new measures include:
  • Designations
  • Designating 116 individuals and entities. Those sanctioned include businesspersons, government officials and members of the army as well as various companies, including Sovcomflot, Russia's largest shipping company.
  • Energy measures
  • LNG re-export ban: Preventing the reloading of Russian LNG in the EU for the purpose of transshipment to third countries. This largely does not affect the import of Russian LNG into the EU although import of Russian LNG through EU terminals that are not connected to the EU gas network are now prohibited - we believe this largely affects Sweden and Finland.
  • Prohibiting investment: Prohibiting new investments, as well as the provision of goods, technology and services for the completion of LNG projects under construction, such as Arctic LNG 2 and Murmansk LNG.
  • Anti-circumvention
  • Subsidiary sanctions circumvention controls: Requiring EU parent companies to undertake their "best efforts" to ensure that their third-country subsidiaries do not circumvent sanctions.
  • Due diligence requirements: Requiring EU operators selling “battlefield” (Common High Priority Items) goods to third countries to implement due diligence mechanisms to identify and assess the risk of re-export to Russia. Any identified risk will need to be mitigated.
  • Contractual provisions re industrial "know-how": Requiring EU entities to include provisions in contracts with third country entities to ensure that any industrial "know-how" regarding the production of military goods transferred to third countries is not transferred to Russia.
  • Finance
  • SPFS Ban: Banning EU entities from connecting to a specialised financial messaging service ("SPFS") developed by the Central Bank of Russia, or any equivalent SPFS.
  • Entities using SPFS: Banning transactions with specified entities using SPFS outside of Russia.
  • Entities facilitating transactions that support Russia's industrial base: Banning transactions with specified credit and financial institutions and crypto assets providers established outside of the EU who facilitate transactions that support Russia's defence industrial base.
  • Political party funding
  • Funding ban: Preventing EU political parties and foundations, NGOs (including think tanks) and media service providers in the EU from accepting funding from Russia.
  • Transport
  • Shipping: Prohibiting specified vessels from accessing EU ports and related services. Vessels can be designated for various reasons, such as (i) transporting military equipment for Russia; (ii) transporting stolen Ukrainian grain; and (iii) supporting the development of Russia's energy sector. The measure also targets Putin's "shadow fleet", transporting Russian oil in circumvention of the oil price cap.
  • Widening EU flight ban: Widening the EU flight ban to apply to non-scheduled flights where Russian persons are in a position to determine the place or time for its take-off or landing (including for holiday and business meetings). There is also a requirement for operators to provide information requested by the competent authorities of Member States about non-scheduled flights (i.e. ownership and passenger information).
  • Road transport of goods: Broadening the prohibition on the transport of goods by road within the EU territory (including transit) to cover EU operators which are owned 25% or more by a Russian natural or legal person.
  • Import / export controls and restrictions
  • Expanding restricted items: Expanding the list of restricted  items that contribute to Russia's technological enhancement by adding certain machine tools and vehicles. There is also a restriction on the export of goods which contribute to the enhancement of Russia's industrial capabilities, including certain chemicals (including certain polypropylene products), machinery, monitors and electrical equipment.
  • Helium import ban: Banning the import of helium from Russia.
  • Protection of EU operators
  • Compensation claims: Allowing EU operators to claim compensation before EU courts for damages caused by Russian companies due to sanctions implementation and expropriation.
  • Transaction ban: Authorising a transaction ban on companies that use Russian law to oust jurisdiction of EU courts/ arbitration agreements in disputes affected by sanctions.
  • IP restrictions
  • IP registrations: Restricting the ability to accept applications by Russian nationals and companies for the registration of certain IP rights in the EU.
• On 12 June 2024, the EU General Court refused a de-listing application submitted by VEB.RF, a Russian state investment corporation. VEB.RF has been subject to an asset freeze since February 2022 (Annex I of Regulation 269/2014) and subject to a prohibition on receiving specialised financial messaging services since March 2022 (Annex XIV of Regulation 833/2014). The Court found that VEB.RF continues to support actions which undermine the territorial integrity, sovereignty and independence of Ukraine and would not be de-listed. Further reasons for refusing the application include:
  • Key decisions made by VEB.RF and its policy makers are closely linked to Vladimir Putin;
  • VEB.RF plays a key role in financing the annexed Crimea region; and
  • VEB.RF works closely with the Russian military industry.
• On 6 June 2024, it was reported that German customs investigators and the public prosecutor's office have taken action against the suspected illegal export of luxury cars to Russia. Raids took place on two premises further to suspicions that a car dealership in Bochum had sold luxury vehicles worth over 5 million euros to Russia. It is reported that investigators seized evidence from both premises.

US

• On 12 June 2024, the US, through OFAC, the Department of State and BIS, expanded its sanctions against Russia and Belarus. The new measures are guided by G7 commitments to intensify pressure on Russia and were announced ahead of the G7 summit on 13 – 15 June 2024. Key changes include:
  • Expanding secondary sanctions on foreign financial institutions, who now risk being sanctioned for conducting or facilitating significant transactions or providing any service involving any person blocked pursuant to Executive Order 14024.
  • Issuing a new determination which prohibits the supply to any person in the Russian Federation of (i) IT consultancy and design services; and (ii) IT support services and cloud-based services for enterprise management software and design and manufacturing software. This determination is supported by the publication of new FAQs and will be effective from 12 September 2024.
  • Imposing sanctions on over 300 individuals and entities whose products and services enable Russia to sustain its war effort and evade sanctions. Those sanctioned include individuals and entities from Russia, Belarus, China, Kazakhstan, Kyrgyzstan, Bulgaria, Serbia, South Africa, Turkey and the UAE who operate in sectors including finance, defence, manufacturing, technology, energy and transport.
  • Introducing various export control restrictions, including:
    • Listing addresses on the Entity List which present a high risk of involvement in the shell company service industry. This aims to make it harder for shell companies to find a corporate services provider willing to lend the use of their address for unlawful trade.
    • Imposing additional restrictions on the export, re-export, or transfer of certain types of software to Russia and Belarus, including enterprise management software and design software.
    • Adding new controls on over 500 additional 6-digit Harmonized Tariff System codes for export, re-export, or transfer to Russia and Belarus.  
    • Narrowing the scope of License Exception Consumer Communications Devices (CCD). Additional items, such as lower-level graphics processing units, will no longer be eligible for export to Russia or Belarus pursuant to the License Exception CCD.
    • Issuing two Temporary Denial Orders against two Russian procurement networks facilitating exports of aircraft parts to Russia through third countries in violation of US export controls.
• On 7 June 2024, Dimitry Timashev, a dual US-Russian citizen, pleaded guilty to violating export controls by exporting firearm parts, components and ammunition to Russia without the required authorisation. Multiple packages of components were sent to Kazakhstan, which Timashev knew were bound for Russia. Timashev concealed the illegal exports by misrepresenting the contents of the shipments on the accompanying manifests. Sentencing is scheduled for 8 November 2024, where Timashev faces a maximum penalty of five years in prison.
• On 7 June 2024, the US de-listed Alexander-Walter Studhalter, his two sons and eight connected companies (including MG International AG and Studhalter International Group AG). Studhalter had been listed for allegedly supporting Suleiman Kerimov's financial network by managing Kerimov's companies and laundering significant amounts of money on Kerimov's behalf.

G7

• At the G7 Summit, held from 13 – 15 June 2024, G7 leaders made numerous commitments relating to Russia's invasion of Ukraine. These included a commitment to make available to Ukraine approximately $50 billion, leveraging the revenues from frozen Russian sovereign assets. The finances are to be disbursed through multiple channels that direct funds to Ukraine's military, budget and reconstruction needs. Other commitments made include:
  • Raising the cost of Russia's war by building on the comprehensive package of sanctions and economic measures already in place;
  • Continuing to take measures against actors in China and third countries who materially support Russia's war machine;
  • Taking robust action against entities who aid Russia in circumventing sanctions; and
  • Continuing to apply pressure on Russian revenues from energy and other commodities, including through improving the efficacy of the oil price cap policy and imposing additional sanctions on those engaged in deceptive practices while transporting Russian oil.

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 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;
• • social media, internet services and app stores are required to block content from RT and Sputnik; and
• • a ban on all Russia-owned or operated aircraft and ships from UK airspace, landings, and ports, and on aviation and shipping technical assistance to, or for the benefit of, designated people/entities.

Crimea, Donetsk and Luhansk

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

Belarus

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

EUROPEAN UNION

Financial services:

• Banking:

• A ban on the provision of SWIFT services to most Russian banks;
• A ban on transactions with Russia's central bank;
• A ban on deposits from Russian nationals or legal persons if the total value exceeds 100,000 EUR;
• A ban on the provision of crypto-asset wallet, account or custody services to Russian persons and residents and a ban on 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;
• Since 18 March 2023, the Russian Regional Development Bank has been subject to a full transactional ban for contracts;
• A ban on providing credit rating services, or access to any subscription services in relation to credit rating activities, to any Russian person, resident, entity or body;

• A ban on new investments in the Russian energy and mining sectors (except certain metals);
• A ban on dealing in transferable securities (including crypto-assets), or money-market instruments of any maturity, issued by certain listed Russian entities and on new loans and/or credit to them;
• A ban on the listing and provision of services in relation to shares of Russian state-owned entities on EU trading venues;
• A ban on EU central securities depositories services for transferable securities issued after 12 April 2022 to any Russian persons;
• The Russian Maritime Register of Shipping has been added to the list of state-owned enterprises subject to financial restrictions;
• The exclusion of all financial support to Russian public bodies;

Trade:

Exports

• A ban on the export, supply and delivery, and making available of the following goods and technology, and related services, to Russia:

• military, internal repression, dual-use and advanced technologies including quantum computers, high-end electronics, software, sensitive machinery and transportation;
• energy industry (except nuclear and energy transport), oil refining, coal and coking coal;
• aviation, jet fuel and space;
• luxury goods;
• maritime navigation; and
• items which may contribute to Russia’s military, industrial and technological enhancement including coal, certain electronic components, certain machinery components, chemicals, torture goods, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles, construction-related goods, processed steel, copper and aluminium goods and lasers.

• The EU's 11^th and 12^th package of sanctions extended the prohibition for certain sensitive goods (such as advanced technology and aviation-related materials) and economically critical goods exported from the EU to third countries, via Russia (intended to address the risks of such goods being diverted while passing through Russia).
• The EU's 12^th package of sanctions also introduced:
• a requirement, from 20 March 2024, for EU exporters to contractually prohibit their customers in third countries (with the exception of partner countries) from re-exportation to or for use in Russia of certain sensitive goods; and
• 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 and products incorporating diamonds originating in Russia, 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; and
• A ban on the participation of Russian companies in public procurement in member states.

Services

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

• A ban on EU nationals holding any posts on the governing bodies of any Russian state-owned or controlled legal persons, entities or bodies.

Donetsk, Luhansk, Zaporizhzhia and Kherson

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

Access

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

Belarus

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

UNITED STATES

Financial services:

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

Trade:

Exports

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

Imports

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

Services

• A ban on the provision of maritime insurance to ships carrying Russian crude 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 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.