Current sanction regulations regarding Russia and the Ukraine
Currently the European Union, the United States,the United Kingdom, Australia, Canada and Japan are announcing and updating sanctions targeting Russia and regions of Ukraine known as the Donetsk People's Republic (DPR) and the Luhansk People's Republic (LPR). Here is a brief overview of some of the changes that are being made.
European Union
On 21 February 2022 the European Council adopted measures under existing sanctions against five individuals for actively supporting actions and implementing policies regarding Ukraine. The individuals are members of the State Duma, who were elected to represent the Crimean peninsula and the city of Sevastopol, as well as the head and deputy head of the Sevastopol election commission. Those designated persons and entities are subject to an asset freeze and EU travel ban.
On 23 February 2022 the EU adopted a package of sanctions in order to "respond to the decision by the Russian Federation to proceed with the recognition of the non-government controlled areas of the Donetsk and Luhansk oblasts of Ukraine as independent entities, and the subsequent decision to send Russian troops into these areas." Targeted sanctions include financial restrictions and an EU travel ban to the listed individuals and entities.
United States
The new Executive Order (EO), entitled “Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to Continued Russian Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine”, prohibits:
1. New investments in the covered regions by a US person.
2. The importation of any goods, services, or technology from these regions to the US.
3. The exportation of any goods, services, or technology from the US or by a US person to these regions.
The EO further prohibits US persons from financing, facilitating, or guaranteeing transactions by foreign persons in which US persons would be prohibited from directly participating.
The EO also authorizes blocking sanctions on any person that the Secretary of the Treasury, in consultation with the Secretary of State, determines is
(1) a person operating in the covered regions; or
(2) a leader, officer, senior manager, or member of the board of directors of an entity operating in the covered regions.
It also authorizes sanctioning an entity determined to be owned or controlled by a person blocked under the EO or any person who has provided material support to a person blocked under the EO.
On 22 February 2022, OFAC designated two financial institutions that it determined to be crucial to the financing of the Russian defense industry, and 42 subsidiaries. All designations were made under the authority of EO 14024, which authorizes blocking sanctions against persons determined to be operating in certain sectors of the Russian economy, with specific sectors to be determined by the Secretary of the Treasury, in consultation with the Secretary of State.
When EO 14024 was issued in April 2021, OFAC had identified the technology and defense sectors and related material as potential targets for future designations. In the most recent action, adopted on 22 February 2022, OFAC further identified the financial services sector of the Russian economy, making it easier for the United States to use a single consolidated sanctions tool to target the entire financial services sector. OFAC has accompanied this determination with FAQ 964, nothin"g that its decision lays the groundwork for future sanctions against persons operating in the financial services sector rather than serving as sanctions on the entire financial services sector.
United Kingdom
The amended Regulations broaden the scope of the UK's Russia Sanctions Regulations by expanding their designation criteria. The designation criteria now include entities and individuals involved in " obtaining a benefit from or supporting the Government of Russia.”
For the amended Regulation, being “ involved in obtaining a benefit from or supporting the Government of Russia ” includes, among other things, conducting business of economic or “in a sector of strategic importance” to the Government of Russia, such sectors being chemicals, construction, defense, electronics, energy, extractive, financial services, information, communications, digital technologies, and transportation.
Australia
The Australian Foreign Minister stated that the Australian Government was coordinating closely with the United States, the United Kingdom, the European Union and other governments around the world to" ensure that Russia's aggression came at a cost and that, together with its partners, Australia was prepared to announce sanctions targeting key Russian individuals and entities responsible for undermining Ukraine's sovereignty and territorial integrity.”
In addition, the Foreign Minister took a “response to Russia’s aggression against Ukraine”. According to the official announcement, Australia will impose travel bans and targeted financial sanctions on eight members of the Russian Security Council.
The 2011 Autonomous Sanctions Regulations will also be amended to extend the existing sanctions to Crimea and Sevastopol to Donetsk and Luhansk. This will impose economic sanctions on the Donetsk and Luhansk regions, prohibiting trade in the transport, energy, telecommunications, and oil, gas, and minerals sectors.
An amendment will also be made to the Regulations to significantly expand the scope of persons and entities that Australia can include on its sanctions list to include those of “strategic and economic importance to Russia.”
Canada
On 22 February 2022, the Prime Minister announced that Canada will align itself with its internation partners and allies and impose sanctions on Russia under the “Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations.”
Japan
On 23 February 2022, Japan announced that they will also implement sanctions in the form of (1) visa issuance suspension and asset freezing and
(2) import and export ban of Russian government bonds for DPR and LPR.
Japan will also be working with the G7 and other international communities to take further measures.
The data reflecting these changes are being continuously processed and updated and are available via PST.AG's data feed notification to our customers.
