EU announces fifth round of Russian sanctions; UK extends financial sanctions | Faegre Drinker Biddle & Reath LLP

On April 5, 2022, the EU announced the fifth sanctions package against Russia. The final round, aimed at deepening the Russian economy, will focus on the following six areas:

  1. A ban on coal imports from Russia, which would cost Russia 4 billion euros per year.
  2. A comprehensive ban on transactions on four key Russian banks, including VTB, Russia’s second-largest bank. The four banks now totally cut off from EU financial markets represent 23% of the Russian banking sector.
  3. Subject to certain exceptions for essential products, such as food and agricultural products, humanitarian aid and energy products, a ban on access to EU ports for Russian ships and ships operated by Russia. This ban is designed to limit opportunities for Russia to obtain essential goods.
  4. Additional targeted export bans, worth €10 billion, in areas where Russia is vulnerable. This ban will affect, for example, quantum computers and advanced semiconductors, as well as sensitive machinery and transport equipment.
  5. New import bans, worth 5.5 billion euros, to cut off the flow of money to Russia and its oligarchs, on products ranging from wood to cement, seafood to alcohol. It will also close the loophole between the current Russian and Belarusian sanctions.
  6. A general ban on Russian companies from participating in EU public procurement processes, as well as the exclusion of any EU financial support to Russian public bodies. The aim is to prevent EU tax money from going to Russian companies.

New regulations and penalties in the UK

In addition to EU sanctions, the UK continues to expand its sanctions regime in response to Russia’s invasion of Ukraine. On March 30, 2022, new regulations came into effect targeting Russian oligarchs’ planes and ships to ban access to aviation and navigation technical assistance. These regulations further introduce a power to designate persons or entities by description under the standard or urgent procedure introduced by the Economic Crimes Act 2022 and correct certain errors and resolve issues arising from previous amendments to the regulations on sanctions against Russia.

This new legislation also extends existing financial, maritime and trade sanctions regarding Crimea to areas of Donetsk and Luhansk oblasts that are not under the control of the Ukrainian government.

Assets freeze and UK travel bans extended

The UK has added the following individuals and entities to its UK Sanctions List and Consolidated List, subjecting them to asset freezes and travel bans.

People:

  • Mikhail Yevgenyevich Mizintsev, Head of National Defense Command and Control Center and Commander of Mariupol Headquarters
  • Anton Sergeevich Anisimov, editor-in-chief of the Sputnik news agency.
  • Andrej Grigoryevich Areshev, under Australian sanctions
  • Anton Sergeyevich Bespalov, subject to sanctions by Australia
  • Sergey Borisovich Brilev, presenter and deputy director of Rossiya Television and Radio Other information
  • Irina Sergeyevna Bubnova, under Australian sanctions
  • Vladimir Ilich Maksimenko, under Australian sanctions
  • Alexey Lvovich Nikolov, general director of Russian broadcaster RT (formerly Russia Today)
  • Sergei Ivanovich Saenko, under Australian sanctions
  • Natalya Petrovna Skorokhodova, under Australian sanctions
  • Svetlana Georgiyevna Zamlelova, under Australian sanctions
  • Aleksandr Alexandrovich Aleksandrovich, CEO of Gasprom-Media Holding

Organizations:

  • Wagner Group
  • Rossiya Segodnya, a major Russian media organization
  • TV-Novosti, a major Russian media
  • Photon Pro LLP
  • Majory srl
  • Djeco Group LLP

Photon Pro LLP, Majory LLP and Djeco Group LLP have also been named by OFAC for their alleged links to a “sanctions circumvention network”.

Since February 24, 2002, the UK has sanctioned banks with £500 billion in global asset value and over £150 billion in net worth of oligarchs and their family members.

UK General Licenses

The United Kingdom has issued or amended the following blanket licenses:

  • a general license authorizing the liquidation period until May 15, 2022 to allow the closing of trading positions with Sovcomflot or its subsidiaries.
  • a general license regarding “payments by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation or the Ministry of Finance of the Russian Federation related to debt issued by them before March 1, 2022” , which allows until June 30, 2022 the provision of financial services for the purpose of receipt and subsequent transfer of non-ruble interest/coupon or installment/principal payments from the Central Bank of Russia, the Fund National Wealth Fund or the Russian Ministry of Finance, or persons owned/controlled or acting on behalf of or at the direction of these 3 entities, in connection with debt issued by them before March 1, 2022.
  • amended general license relating to the “Continuation of the activities and essential needs of the subsidiaries of GEFCO UK” to allow the persons or an institution concerned to process payments or transactions relating to the sale and transfer of shares of the joint venture by the means of Russian irons. This license expires on May 23, 2022.
  • Amended General License for “Russian Banks – UK Subsidiaries – “Basic Needs, Routine Holding and Maintenance, Payment of Legal Expenses and Payments Related to Insolvency” to authorize any payment or take any action in connection with the proceedings of insolvency relating to VTB Capital UK Subsidiary This license expires on 1 March 2023.

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