On February 24 and 25, 2023, the United Kingdom and European Union each adopted additional sanctions against Russia due to the ongoing conflict in Ukraine. These new measures are summarized below.
This post marks the third entry in our Year-in-Review series. For prior posts, click here.
Many of the first measures that the United States, European Union and United Kingdom collectively took against Russia in 2022 related to aircraft and international air travel. As the conflict broke out, each jurisdiction quickly prevented Russian actors from entering their airspace. Over the past year, export controls on the aviation industry and sanctions on companies that support the Russian aviation sector have grown increasingly complex. Those rules have also been applied to Russia’s ally, Belarus. Meanwhile, Russia has imposed a number of significant countermeasures in order to keep aircraft within Russia. Below, we explore how key sanctions on Russia have affected the aviation industry.
This post marks the second entry in our Year-in-Review series. For prior posts, click here.
Few sectors have been more affected by the sanctions on Russia than the energy industry. As Russia’s largest industry, it has been a focus of sanctions designed to deter the continuation and escalation of the conflict in Ukraine, with policies targeting the trade in oil and gas, new equity and debt, investment in energy projects, and export to Russia of equipment and parts, as well as designations of specific companies and individuals in the sector.
On February 24, 2022, Russia’s entry into Ukraine set off an unprecedented wave of sanctions and export controls by a wide coalition of countries, including the United States, the United Kingdom, the European Union, Canada, Japan, South Korea, Australia, and New Zealand. The goal of these measures is to cripple the Russian economy and its military capability, and they have had a widespread impact—both direct and indirect—on a broad array of global industries.
On December 5, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) announced a $60 per barrel price cap on maritime transfers of Russian-origin crude oil. The final cap level is being implemented multilaterally by the Price Cap Coalition, which include the Group of 7 (G7) nations and Australia.
Various reports indicate that the Group of Seven nations (G7) will announce its initial capped price for Russian-origin crude oil transported by maritime means (“seaborne”) this week. The cap will come into effect on December 5, 2022, for crude oil (including condensate) and February 5, 2023, for petroleum products.
In response to Russia/Ukraine conflict, and Belarus’ ensuing support for Russia, the United States and global allies have imposed sweeping sanctions and export control restrictions on both Russia and Belarus. These actions are discussed extensively in our prior publications.
The sanctions and export controls restrictions especially target Russia and have had a significant impact on the Russian economy. Virtually every industry is impacted, and Russia’s financial institutions, businesses and prominent individuals are being targeted by ever-widening sanctions and export control restrictions imposed by the United States and global allies. As the situation evolves, further restrictions remain possible.
In the final few days of September, the U.S. and global allies issued a number of sanctions and export controls against actors who have supported Russia’s referendums in Ukraine and related attempts to annex four Ukrainian territories. The referendums have been condemned by the Group of 7 (G7) nations, which committed to imposing further economic costs on individuals and entities both inside and outside of Russia.
The latest measures include actions by the Office of Treasury’s Office of Foreign Assets Control (OFAC), the U.S. Department of Commerce’s Bureau of Industry and Security (BIS), the U.S. Department of State, and the United Kingdom (UK) Office of Financial Sanctions Implementation (OFSI), as well as further announcements from the European Union (EU), described in turn below.
Takeaways
On September 2, 2022, the Group of 7 (G7) nations formally announced its consensus to implement a global price cap on Russian oil and petroleum products in response to the ongoing conflict in Ukraine. The Joint Statement does not provide a specific timeline for implementation of the price cap, but notes that it seeks to align implementation with related measures within the EU’s sixth sanctions package, which will come into effect on December 5, 2022. (See here for prior analysis of this package.) The initial capped price has not been announced, and will be decided by the full coalition in advance of implementation.
EU introduces a sixth package of sanctions.
On June 3, 2022, the EU adopted a sixth package of sanctions against Russia which includes economic, individual, media and diplomatic measures. (See the full text of the regulation here.) Continue reading →
Global Trade & Sanctions Law