Jun 10, 2022

Sanctions against Russia

Sanctions against Russia

Following Russia’s violation of international law and Minsk I and Minsk II Agreements of 2014 and 2015, leading to the ongoing crisis in Ukraine, EU, US and UK leaders agreed on Thursday 24th February 2022 to impose harsh economic sanctions on Russian Federation. Since February, the crisis continues to escalate, triggering further extensions of sanctions in March, April, May and June 2022.

To date, the majority of the global community has imposed extensive economic sanctions, including banking ban, freeze & seize of assets, travel ban, aviation sanctions, fossil fuels & other commodities sanctions, export ban, etc.

As of early June 2022, SWIFT ban and sanctions on financial transactions includes the following Russian banks: Sberbank, Credit Bank of Moscow, Russian Agricultural Bank, Novikombank, Bank Otkritie, Promsvyazbank, Rossiya Bank, Sovcombank, Vnesheconombank (VEB), and VTB Bank (and their designated Russia based subsidiaries), as well as the following Belarus banks: Central Bank of Belarus, Belarusian Bank For Development and Reconstruction (Belinvestbank), Belagroprombank, Bank Dabrabyt, and Development Bank of the Republic of Belarus.

Following the announcement of the US President Biden for an immediate ban on Russian oil and energy imports, UK Prime Minister Boris Johnson stated that “the UK will move away from dependence on Russian oil throughout this year”, while the EU is planning to reduce the energy dependency on Russia by two-thirds in 2022, with a commitment to end it by 2030.

The United Nations General Assembly voted 7th April to suspend Russia from the UN Human Rights Council, the world organization’s leading human rights body. Sanctions and overall international boycott of Russia and Belarus have had a significant negative effect on Russian economy, and the actual impact is yet to be seen in the coming months.

European Union (EU) Sanctions

Quoting European Commission President Ursula von der Leyen, “EU sanctions will target the strategic sectors of the Russian economy by blocking the access to technologies and markets that are key for Russia.”

Germany, Italy, Hungary, France and Cyprus were among the EU member states that preferred a step-by-step approach, whereas central European and Baltic states – those closest to Russia – wanted a harder stance. Nordic countries Finland and Sweden have applied to join NATO, ending decades of their non-aligned status.

The most recent EU’s sixth package of sanctions includes a ban on provision of bookkeeping, audit, tax advice, and accounting services, business and management consulting, as well as public relations services to the Russian government and Russian companies. Further, Member States will be required to establish criminal penalties for sanctions breaches, and have the possibility to confiscate the proceeds of such breaches.

As of 3rd June 2022, EU restrictive measures, with asset freezes and travel restrictions, now apply to a total of 1,175 individuals and 101 entities linked to the Ukraine crisis.

  • Under the 6th EU package of sanctions, the sanctions have been extended to the additional 65 individuals: Azatbek Asanbekovich Omurbekov, Andrei Boevich Kurbanov, Viacheslav Sergeevich Klobukov, Aleksandr Viktorovich Vins, Aleksandr Leonidovich Shershnev, Sergei Aleksandrovich Vetrov, Ruslan Ovsepovich Mitiaev, Andrei Nikolaevich Ermishko, Maksim Alekseevich Platonenkov, Vladimir Viktorovich Matafonov, Dmitrii Ivanovich Lvov, Evgenii Valerievich Ladyzhenskii, Dmitrii Viktorovich Pakhandrin, Anatolii Aleksandrovich Shipitsyn, Denis Nikolaevich Deev, Oleg Iurievich Bukhvalov, Dmitrii Aleksandrovich Smoliago, Aleksei Viacheslavovich Bolshakov, Roman Vladimirovich Nadezdhin, Viktor Vladimirovich Filippov, Faik Sameddin Ogly Mamedov, Igor Evgenievich Fedotov, German Nikolaevich Kulemin, Roman Victorovich Burdo, Dmitry Arkadyevich Kozlov, Ivan Alexandrovich Kurkin, Evgeny Yurievich Vazhenov, Dmitry Yulianovich Ionov, Alexander Anatolyevich Kochergin, Alexander Vladimirovich Kopylov, Maxim Vladimirovich Chernyshev, Stanislav Igorevich Makarov, Andrey Nikolaevich Ivanov, Sergei Gennadyevich Pereshivkin, Aleksey Vladimirovich Prysev, Sergey Viktorovich Rudenko, Olga Aleksandrovna Khamenok, Dmitriy Gennadyevich Levin, Dmitriy Alekseevich Gonchar, Sergey Sergeevich Zorin, Aleksandr Aleksandrovich Potapov, Stepan Viktorovich Grigorov, Sergey Viktorovich Mosalev, Valentin Pavlovich Lutsak, Sergey Nikolaevich Borisenko, Marina Alexandrovna Mordashova, Mikhail Evgenievich Mizintsev, Elizaveta Dmitrievna Peskova, Nikolay Dmitrievich Peskov (Aka Choles/Choulz), Tatiana Aleksandrovna Navka, Sergey Vladimirovich Savostyanov, Andrei Yurievich Lipov, Volodymir Vasilyovich Saldo, Kyrylo Sergiyovich Stremousov, Serhiy Mikolayovich Cherevko, Tetiana Kuzmich, Galina Viktorivna Danilchenko, Petr Akopov, Timofey Nikolaevich Sergeytsev, Victoria Nikiforova, Alina Maratovna Kabaeva, Aleksandra Melnichenko, Eduard Yurevich Khudaynatov, Pavel Evgenevich Prigozhin, And Arkady Yurievich Volozh.
  • Sanctions against individuals up to the 5th EU package of sanctions, including but not limited to: Herman Gref, Olga Ayziman, Saodat Narzieva, Anastasia and Ekaterina Ignatova, Lyudmila Rukavishikova, Elena Timchenko, Mikhail Babakov, Said Kerimovdob, Igor Rotenberg, Oleg Deripaska, Vladimir Valerievich Rashevsky, Tigran Oganesovich Khudaverdyan, Suleyman Abusaidovich Kerimov, Marina Vladimirovna Sechina, Konstantin Lvovich Ernst, Dmitry Yevgenevich Kulikov, Artyom/ Artem Grigoryevich Sheynin, Armen Sumbatovich Gasparyan, Andrey Valerievich Ryumin, Alexander Nikolayevich Shokhin, Alexander Alexandrovich Mikheev, Alexey Viktorovich Kuzmichev, Viktor Filippovich Rashnikov, German Borisovich Khan, Roman Arkadyevich Abramovich, Sergei Shoigu, Anton Vaino, Marat Khusnullin, Dmitry Grigorenko, Maxim Reshetnikov, Nikolay Yevmenov, Vladimir Lvovich Kasatonov, Igor Osipov, Oleg Salyukov, Sergei Surovikin, Sergey Dronov, Yevgeny Prigozhin, Violetta Prigozhina, Lyubov Valentinovna Prigozhina, Denis Bortnikov, Andrey Kostin, Igor Shuvalov, Margarita Simonyan, Maria Zakharova, Vladimir Solovyov, Konstantin Knyrik, Aleksey Pushkov, and Pyotr Tolstoy, Alexander Konstantinovich Akimov, Andrey Andreevich Guryev, Vladimir Sergeevich Kiriyenko, Dmitry Vladimirovich Konov, Sergey Alexandrovich Kulikov, Nikita Dmitrievich Mazepin, Dmitry Arkadievich Mazepin, Andrey Igorevich Melnichenko, Vadim Nikolaevich Moshkovich, Mikhail Eduardovich Oseevsky, Mikhail Igorevich Poluboyarinov, Dmitry Alexandrovich Pumpyansky, Alexander Dmitrievich Pumpyansky, Galina Evgenyevna Pumpyanskaya, Alexander Semenovich Vinokurov, Serhiy Vitaliyovich Kurchenko and Yevgeniy Viktorovich Prigozhin.

6th EU package of sanctions against Russia

  • Ban on imports from Russia of crude oil and refined petroleum products, with limited exceptions.
  • SWIFT ban for an additional 3 Russian banks and 1 Belarusian bank.
  • Suspension of broadcasting in the EU for 3 more Russian state-owned outlets: Rossiya RTR/RTR Planeta, Rossiya 24/Russia 24 and TV Centre International.
  • New individual sanctions on additional 65 individuals and 18 entities.

5th EU package of sanctions against Russia

  • Ban on imports from Russia of coal, currently worth €8 B per year, and other solid fossil fuels.
  • Ban on all Russian vessels from accessing EU ports.
  • Ban on Russian and Belarusian road transport operators from entering the EU.
  • Ban on imports of other goods such as wood, cement, fertilisers, seafood and liquor (total estimated value of €5.5 B per year).
  • Ban on exports to Russia of jet fuel and other goods (such as quantum computers and advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment).
  • Ban on deposits to crypto-wallets.
  • Additional sanctions on 217 individuals and 18 entities, and 2 business people.
  • A full transaction ban on 4 key Russian banks, representing a 23% market share in the Russian banking sector.

4th EU package of sanctions against Russia

  • Ban on all transactions with certain state-owned enterprises.
  • Ban on the provision of credit rating services to any Russian person or entity.
  • Ban on new investments in the Russian energy sector.
  • Additional sanctions on 15 individuals and 9 entities.
  • Trade restrictions for iron, steel and luxury goods.

3rd EU package of sanctions against Russia

  • Ban on transactions with the Russian Central Bank and exclusion of 7 Russian banks from SWIFT.
  • Ban on the overflight of EU airspace and on access to EU airports by Russian carriers.
  • Additional sanctions on 26 individuals and 1 entity, 14 oligarchs and 146 members of the Russian Federation Council.
  • Ban on investing, participating or otherwise contributing to future projects co-financed by the Russian Direct Investment Fund.
  • Ban on selling, supplying, transferring or exporting euro banknotes to Russia or to any natural or legal person or entity in Russia.
  • Suspension of the broadcasting activities in the EU of the outlets Sputnik and Russia Today.
  • Measures targeting the Belarus financial sector, restricting the provision of SWIFT to 3 Belarusian banks and transactions with the Central Bank of Belarus; prohibit the listing and provision of services of shares of Belarusian state-owned entities on EU trading venues; prohibit the provision of euro-denominated banknotes to Belarus.

2nd EU package of sanctions against Russia

  • Freeze of assets of Vladimir Putin, President of the Russian Federation, and of Sergey Lavrov, Minister for Foreign Affairs of the Russian Federation.
  • Restrictive measures on the members of the National Security Council of the Russian Federation and on the remaining members of the Russian State Duma who supported Russia’s immediate recognition of the self-proclaimed Donetsk and Luhansk ”republics”.
  • Further package of individual and economic measures covering: finance, energy, transport and technology sectors, as well as visa policy.

1st EU package of sanctions against Russia

  • Targeted sanctions against the 351 members of the Russian State Duma and an additional 27 individuals.
  • Restrictions on economic relations with the non-government controlled areas of Donetsk and Luhansk oblasts.
  • Restrictions on Russia’s access the EU’s capital and financial markets and services.
  • Further sanctions targeting: financial sector; energy and transport sectors; dual-use goods; export control and export financing; visa policy; additional sanctions against Russian individuals; new listing criteria.

United States of America (USA) Sanctions

United States’ President Joe Biden announced set of measures that will “impose severe cost on the Russian economy, both immediately and over time.” The sanctions include export blocks on technology, which would severely limit Russia’s ability to advance its military and aerospace sector. Sanctions have also been applied on Russian banks and high-net-worth individuals (and their families) close to the Kremlin. On 8th March 2022, the US President Biden has signed an Executive Order to ban the import of Russian oil, liquefied natural gas, and coal to the United States.

  • Targeting state-controlled media within Russia that bolster the war, sanctions have been imposed on 3 television stations: JSC Channel One Russia, Television Station Russia-1, and JSC NTV Broadcasting Company.
  • Prohibiting U.S. persons from providing accounting, trust and corporate formation, and management consulting services to any person in the Russian Federation.
  • Restriction of the export of goods related to aerospace, marine, electronics, technology, and defence and related materiel sectors of the Russian economy.
  • Full blocking sanctions on Russian banks – Sberbank and Alfa Bank – freezing any of Sberbank’s and Alfa Bank’s assets touching the US financial system and prohibiting US persons from doing business with them.
  • Sanctions on major Russian banks, including the removal of 7 banks, Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, Vnesheconombank (VEB), and VTB Bank, from SWIFT global system.
    • Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank (VEB);
    • Public Joint Stock Company Sberbank of Russia (Sberbank);
    • OFAC has also imposed blocking sanctions on three additional major Russian financial institutions: VTB Bank, Vnesheconombank, Promsvyazbank, Bank Otkritie, Sovcombank OJSC, and Novikombank – and 34 subsidiaries.
  • Prohibiting new investment in the Russian Federation by US persons wherever located.
  • Prohibiting Russia from making debt payments with funds subject to US jurisdiction (sanctions do not preclude payments on Russian sovereign debt at this time, provided Russia uses funds outside of US jurisdiction).
  • Full blocking sanctions on critical major Russian state-owned enterprises, prohibiting any US person from transacting with these entities and freeze any of their assets subject to US jurisdiction: i) Public Joint Stock Company Alrosa, a Russian state-owned enterprise (SOE) and the world’s largest diamond mining company; and, ii) Joint Stock Company United Shipbuilding Corporation (USC), responsible for developing and building the Russian Navy’s warships – as well as its subsidiaries and board members.
  • Sanctioning Limited Liability Company Promtekhnologiya, rifles and weapons manufacturer; seven shipping companies, which own or operate 69 vessels; and one marine towing company.
  • Further restrictions by the Department of Commerce on obtaining technology and software, adding 71 parties located in Russia and Belarus to the Entity List.
  • The Nuclear Regulatory Commission will also suspend general licenses for exports of source material, special nuclear material, byproduct material, and deuterium to Russia.
  • New debt and equity restrictions on 13 of the most critical major Russian enterprises and entities (Sberbank, AlfaBank, Credit Bank of Moscow, Gazprombank, Russian Agricultural Bank, Gazprom, Gazprom Neft, Transneft, Rostelecom, RusHydro, Alrosa, Sovcomflot, and Russian Railways).
  • Full blocking sanctions on the President of Russian Federation Vladimir Putin and his Foreign Minister Sergei Lavrov, as well as Russian elites and their family members – individuals close to Putin and financial sector elites: President Putin’s adult children, daughters Maria Vladimirovna Vorontsova and Katerina Vladimirovna Tikhonova; Foreign Minister Lavrov’s wife, Maria Lavrova, and daughter Yekaterina Sergeyevna Vinokurova; members of Russia’s Security Council including former President and Prime Minister of Russia Dmitry Medvedev and Prime Minister Mikhail Mishustin; Sergei Ivanov (and his son, Sergei), Nikolai Patrushev (and his son Andrey), Igor Sechin (and his son Ivan), Andrey Puchkov, Yuriy Solviev (and 2 real estate companies he owns), Galina Ulyutina, Alexander Vedyakhin, Denis Bortnikov, Petr Fradkov, Vladimir Kiriyenko, Sergei Kiriyenko, Sergei Roldugin (and his family members), God Nisanov, Maria Zakharova, Alexey Mordashov (in addition to his family members and companies), government ministers overseeing key sectors integral to the Russian economy, yacht brokerages including Imperial Yachts and its CEO, and the President of United Aircraft Corporation, 8 executives from Sberbank, 27 executives from Gazprombank and Moscow Industrial Bank and its 10 subsidiaries.
  • Ban on the importation into the US of Russian crude oil and certain petroleum products, liquefied natural gas, and coal.
  • Additional restrictions on Russia’s industrial sector, including a broad range of inputs and products including wood products, industrial engines, boilers, motors, fans, and ventilation equipment, bulldozers, and many other items with industrial and commercial applications.
  • Additional measures: i) banning Russia’s aircraft from US airspace; ii) prohibiting Russian-affiliated vessels from entering into United States ports; iii) restrictions extending export control policies to Belarus and preventing diversion of tech and software to Russia through the country.

United Kingdom (UK) Sanctions

UK Prime Minister Boris Johnson stated that “for our part today the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen.” This will include sanctions freezing the assets of all major banks, and imposing sanctions and travel restrictions on individuals and businesses. Funds held by Russian nationals in UK financial institutions will be limited, and numerous individuals and entities will be sanctioned, including sanctioning the President of Russian Federation Vladimir Putin and his Foreign Minister Sergei Lavrov, as well as banning Russian companies from raising finance on UK markets.

  • Individuals, including but not limited to: Kirill Shamalov, Petr Fradkov, Denis Bortnikov, Yuri Slyusar, Elena Aleksandrovna Georgieva, Gennady Timchenko, Igor Arkadyevich Rotenberg, Boris Romanovich Rotenberg, Roman Borisovich Rotenberg, President Vladimir Putin, Foreign Minister Sergei Lavrov. The list has been extended on 10th March 2022 by 7 high-profile tycoons: Roman Abramovich, Igor Sechin, Oleg Deripaska, Andrey Kostin, Dmitri Lebedev, Alexei Miller, and Nikolai Tokarev. Further individuals have been added to the sanctions list on 6th April, including: President Putin’s adult children, daughters Maria Vladimirovna Vorontsova and Katerina Vladimirovna Tikhonova; Foreign Minister Lavrov’s wife, Maria Lavrova, and daughter Yekaterina Sergeyevna Vinokurova – in addition to Polina Kovaleva, Minister Lavrov’s stepdaughter added to the sanctions list on 25th March. Also, additional 8 persons are included on the list of sanctioned individuals: Boris Borisovich Rotenberg; Alexander Dyukov; Andrey Akimov; Leonid Mikhelson; Sergey Sergeyevich Ivanov; Sergey Kogogin; Andrey Guryev; Viatcheslav (Moshe) Kantor. As of 14th April 2022, UK has sanctioned Eugene Tenenbaum and David Davidovich. Further notable individuals sanctioned on 21st April 2022 are: Lt Colonel Azatbek Omurbekov, Colonel General Andrey Serdyukov, Major General Valery Flyustikov and Colonel General Nikolay Bogdanovsky, as well as Oleg Belozyorov and Ilya Kiva. Further sanctions extended 4th May 2022 include Evgeny Poddubny, Alexander Kots and Dmitry Steshin. As of 13th May 2022, additional individuals have been sanctioned, including Alina Kabaeva, Anna Zatseplina, Lyudmila Ocheretnaya, Igor Putin, Mikhail Putin, Roman Putin and Mikhail Shelomov, bringing the total number of oligarchs, family members and associates sanctioned to over 1600 individuals and entities since February.
  • Politicians: members of the Russian parliament, the Duma, and Federation Council who voted to recognise the independence of Donetsk and Luhansk.
  • Banks, including but not limited to:
  • A full asset freeze has been imposed on Sberbank of Russia PJSC and Credit Bank of Moscow.
  • Sanctions on 70% of the Russian banking market, including VTB Bank, Rossiya Bank, IS Bank, GenBank, Promsvyazbank, The Black Sea Bank.
  • Removal of 7 banks from SWIFT global system: Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, Vnesheconombank (VEB), and VTB Bank.
  • Companies, including but not limited to: JSC Research, United Aircraft Corporation, United Shipbuilding Corporation, Rostec, Uralvagonzavod, Tactical Missiles Corporation, JSC Rossiya Airlines, JSC Ural Airlines, PJSC Aeroflot, and strategic propaganda organizations, including RT and Sputnik online, All Russia State Television and Radio Broadcasting, InfoRos and South Front.
  • As of 4th May 2022, Foreign Secretary is set to cut off Russia’s access to the UK’s management consulting, accounting and PR services.
  • UK has revoked the Moscow Stock Exchange’s (MOEX) status as a recognized stock exchange on 5th May 2022.
  • Additional measures: i) all Russian aircraft, including private jets, are banned from UK airspace; ii) Russian ships banned from UK ports, including any vessels owned or operated by anyone connected to Russia and authorities will also gain new powers to detain Russian vessels ; iii) all dual-use export licences to Russia have been suspended with immediate effect (including items that may have civilian use, e.g. electrical components and truck parts); iv) key Russian state-owned and private companies will be prevented from borrowing or raising capital on the UK markets or processing any payments through the UK, and Russia will be barred from raising sovereign debt in London; v) prohibiting a wide range of hi-tech exports, and the export of equipment connected to extracting oil and gas, in cooperation with the US; vi) imposed phasing out of import of Russian oil will not be immediate, allowing the UK enough time to adjust supply chains, supporting industry and consumers; vii) a ban on all new outward investment to Russia (in 2020 UK investment in Russia was worth over £11 B); viii) action against key Russian strategic industries and state-owned enterprises – ban on imports of iron and steel products; ix) new restrictions on Russia’s ability to acquire the UK quantum and advanced material technologies; x) import bans on silver, wood products and high-end products from Russia including caviar; xi) further import tariffs on products worth £1.4 B, including platinum and palladium; xii) Export bans worth more than £250 M target Russia’s manufacturing and heavy machinery sectors.

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