Articles Posted in Russia Sanctions

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Takeaways

  • The G7 has announced consensus on a price cap for Russian origin oil and petroleum products to be implemented across a wide coalition of countries.
  • The cap would be implemented by prohibiting services related to the maritime transportation of Russian-origin crude oil and petroleum products unless the products are purchased below the capped price, and thus impacts a broad array of industries.
  • The capped prices have yet to be determined and are proposed to be aligned with the implementation of restrictions in the EU’s sixth sanctions package, which will reportedly go into effect by December 5, 2022.

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.

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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 →

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We’ve covered in depth the array of sanctions-related activity brought by the international community against Russia in response to the conflict in Ukraine. As these measures mount, Russia has in return taken steps to alleviate some of the pressure such sanctions have brought to bear. In “Russia Introduces Tools for Russian Persons to Continue Use of Foreign IP Rights without Consent from Rightsholder,” Nancy A. Fischer, Aaron R. Hutman, Luke Wochensky and Oleg Khokhlov examine one recent such action.

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On May 8, 2022, the White House announced a number of new measures in response to Russia’s ongoing war in Ukraine. The new measures include prohibitions on new categories of services to Russia by U.S. persons; export controls on certain industrial goods; and the addition of several shipping companies, bank executives, and television companies to the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons (SDN) List.

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EU introduces a fifth package of measures.

New asset freezes
On April 8, 2022, the EU published a fifth round of measures against Russia and Belarus. Spread across four regulations, the new measures include additional asset freezes against 217 individuals and 18 entities. Notable inclusions are Otkritie FC Bank, Novikombank, Sovcombank, VTB Bank, and JSC GTLK. The full list of new designations can be found in the Annex to Regulation (EU) 2022/581.

A wind down license is available for the termination of correspondent banking relationships with the newly frozen banks by October 9, 2022. A new ground for licensing has also been added so that member states may enable the sale by listed persons/entities of proprietary rights in EU companies, provided the proceeds of such sale and transfer remain frozen.

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In the last month, the United States and global allies have issued unprecedented sanctions against Russia in response to the war in Ukraine. These sanctions apply ever-expanding pressure on the Russian economy and touch virtually every industry. This post addresses the latest U.S. sanctions against Russia in the following categories: new investment prohibitions, finance, energy sector import and export rules, general export and import controls, expanded sanctions designations, and denial orders for Russian airlines under export control authorities. The U.S. government already is actively implementing these authorities around the world, as evidenced by recent enforcement actions.

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The listing of Specially Designated Nationals (SDNs) has the potential to impact any American doing business with a named party, including landlords who lease real estate to sanctioned persons. In “Specially Designated Nationals as Tenants: How Landlords Can Be Impacted by Sanctions Against Russian Nationals,” Nancy A. Fischer, Rachel B. Horsch, Anne C. Lefever, Zachary C. Rozen and Samantha Franks explain how sanctions designations may require U.S. persons involved with sanctioned individuals to terminate existing contracts, including leases, and why it is important for landlords to conduct thorough due diligence on prospective tenants and to negotiate language that enables them to quickly terminate a lease if a tenant becomes subject to sanctions.

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UK DEVELOPMENTS

Further designations
On 10 March 2022, the UK Government added a further seven oligarchs to its list of sanctions targets, including the owner of Chelsea football club, Roman Abramovich. This was closely followed on 11 March 2022 by the sanctioning of 386 members of the Russian Duma (comparable sanctions had already been imposed by the EU).

Further aircraft-related sanctions
Airport operators, air traffic controllers and the Secretary of State have been granted new powers to issue directions to Russian aircraft (e.g., to take off, not to take off, and to land) and to suspend and revoke permissions needed to operate. The new provisions also allow the detention and movement of Russian aircraft and prohibit a person from providing aircraft insurance or reinsurance services to a person connected with Russia or where the aircraft is for use in Russia.

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On February 27, 2022, the U.S., UK and EU announced their agreement that certain Russian banks would be delisted from the Belgian-based Society for Worldwide Interbank Financial Telecommunication (SWIFT). The EU, which has jurisdiction over SWIFT, implemented sanctions measures that will ban the organization, effective March 12, 2022, from providing financial messaging support anywhere in the world for the following Russian financial institutions and their Russian subsidiaries:

  • Bank Otkritie;
  • Novikombank;
  • Promsvyazbank (PSB);
  • Bank Rossiya;
  • Sovcombank;
  • Vnesheconombank (VEB); and
  • VTB Bank

The SWIFT announcement has raised questions about how this action relates to existing sanctions and general licenses for Russian banks. We explore the differences below.

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The EU and UK have imposed additional export controls and sanctions with respect to Russia and Belarus connected to the Russian invasion of Ukraine. Below is a summary of key developments over recent days since our last blog post on EU and UK developments [here]. This is a rapidly developing area and future blog posts will summarize further developments.

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