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Global
Crisis-Ukraine-Russia
In previous posts, we outlined measures imposed by states in response to Russia’s recognition of Donetsk and Luhansk. Following Russia’s invasion of Ukraine on 24 February 2022, various states have enacted a new tranche of measures in response and announced further measures to be imposed over the coming days.
We outline below the further actions taken by the US, EU, UK, Canada, and Australia since our last update.
The most significant developments represent:
We expect that the further and continued targeting of Russia regions, sectors, entities and individuals in these latest developments will spawn a multiplicity of complex compliance challenges going forward.
US
Nord Stream 2
On 23 February, the US blocked and designated as Specially Designated Nationals (SDNs) Nord Stream 2 AG, the lead company building the Nord Stream 2 gas pipeline between Russia and Germany, and its CEO, Matthias Warnig.
Nord Stream 2 AG and Mr Warnig were both designated under Executive Order 14039 of 20 August 2021. OFAC also issued a related general license authorizing transactions involving Nord Stream 2 AG, or any entity it owns 50% or more, through 2 March 2022.
Such designations follow a decision taken by Germany to halt the certification process for the Nord Stream 2 pipeline.
Measures Targeting Russian Financial Institutions and Other Entities
On 24 February 2022, OFAC announced the imposition of the following measures targeting Russian and Belarussian financial institutions:
There are some accompanying General Licences which authorise, for a limited period of time, certain dealings with the above entities.
OFAC have also designated an additional number of Russian elites and their family members.
New Export Restrictions
The White House has also announced forthcoming export restrictions targeting military items and also sensitive goods and technologies related to the Russian defense, aviation, and maritime sectors
EU
Further to the update in our last post, the EU has since published legislative details of the sanctions package that in enacted on 23 February.
These include:
The new measures have been implemented by way of updates of existing EU Regulations, such as Regulation (EU) No 269/2014 (as amended) and Regulation (EU) No 833/2014 (as amended), and through the introduction of the new Council Regulation (EU) 2022/263.
A further package of sanctions is expected to be finalised and enacted over the coming days following an extraordinary meeting of the European Council and European Commission late in the evening of 24 February 2022.
The European Council have also condemned the involvement of Belarus in the current conflict and have indicated that it will seek to expand the current EU-Belarus sanctions programme.
UK
On 24 February 2022, the UK Foreign Secretary announced the imposition of immediate and future measures that were described as "punishing sanctions to inflict maximum and lasting pain on Russia".
In summary, the UK has imposed or will seek to impose:
The announcement made reference to the issue of a General Licence in relation to VTB, which will be published by OFSI.
Canada
On February 22 and 24, 2022, the Canadian federal government announced the imposition of various measures in response to Russia’s recognition of Donetsk and Luhansk and its deployment of military forces into those territories.
These measures have been enacted under the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations. Based on the Prime Minister’s announcements, Canada appears to be implementing measures in alignment with those announced by the US and EU.
The measures imposed on 22 February 2022 include:
On 24 February 2022, the Prime Minister announced the imposition of further measures, including:
Australia
Further Designations
On 24 February 2022, the Australian government designated:
The Prime Minister stated that further designations were likely to be made, including on members of the Russian State Duma involved in Russia’s recognition of Donetsk and Luhansk.
Crimea Trade Restrictions Extended to Donetsk and Luhansk
The Autonomous Sanctions Amendment (Ukraine Regions) Regulations 2022 extend the following restrictive measures currently applicable to the Crimea and Sevastopol region to Donetsk and Luhansk:
The legislation introduces the broader concept of a ‘specified Ukraine region’, allowing the Government to extend such measures to further regions in Ukraine, if required.
New Listing Criteria
Australia has also amended the Autonomous Sanctions Regulations 2011 (Cth) by way of the Autonomous Sanctions Amendment (Russia) Regulations 2022 to add further criteria for the imposition of asset freezes and travel bans on individuals or entities who are deemed to be:
It is anticipated that this new listing criteria will allow for the designation of individuals and entities in alignment with multilateral partners.
Further Sanctions Expected
In light of the rapidly escalating conflict in Ukraine, further measures are anticipated to be imposed over the coming days. Over the course of our previous updates on this situation (here, here, here and here), a greater degree of alignment on a policy level and timing between multilateral partners can be observed.
As we continue to monitor and update you on development, we encourage readers to subscribe to be kept informed of new developments.
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