New Russia-related sanctions

We highlight the main features of these developments below.

Norwegian Sanctions

On 28 October 2022, Norway imposed an additional set of sanctions on Russia, which entered into force the same day. The sanctions incorporate the EU's 8th package and are therefore largely in line with the measures described in our previous update. In summary, the Norwegian measures include:

• Expansion of the geographical scope of the restrictions that were applied in February to the non-government controlled parts of the Donetsk and Luhansk oblasts to cover also the non-controlled areas of the Zaporizhzhia and Kherson oblasts;
• Additional export restrictions on e.g., coal, electronic components, technological goods used in the aviation sector and certain chemicals;
• Additional import restrictions on certain Russian products;
• Expansion of the ban on access to Norwegian ports to apply to vessels registered in the Russian Maritime Register of Shipping. Note that there is a Norwegian exemption from the port ban for Russian fishing vessels calling at ports in Tromsø, Kirkenes or Båtsfjord (which is not included in the EU sanctions);
• Additional services bans to Russia of IT consultancy, legal advisory, architectural and engineering services;
• Future prohibition on providing maritime transport, as well as technical assistance, brokering services or financing or financial assistance related to the maritime transport, to third countries of (listed) crude oil or petroleum products, which will apply after the Norwegian Ministry of Foreign Affairs has adopted a price cap on Russian oil (below);
• New legal basis for the implementation of a price cap on Russian oil (ref. above);
• New ban on holding posts in governing bodies of certain state-owned or state-controlled enterprises;
• Tightening of existing prohibitions on the provision of services for crypto assets to Russian citizens, persons living in Russia and entities established in Russia;
• New legal basis for designating individuals and entities that facilitate infringements of the prohibition against circumvention of sanctions; and
• Addition of the Russian Maritime Shipping Register to the list of state-owned entities subject to a transaction ban.

Interestingly, some of the above Norwegian amendments, in particular those that regard the scope of bans on the import or transfer of certain goods to third countries, depart in scope from the text of the EU provisions they are based on, in the sense that they are not mere translations of their EU equivalents, but are rather aligned with the legislative interpretations that have been expressed by the EU Commission through various Russia-related FAQs. Presumably, this has been done to make it easier for Norwegian operators to identify the scope of the prohibitions.

Further information is available in this press release and in the amending legislation itself. The Norwegian Ministry of Foreign Affairs' Russia-related sanctions guidance has been updated accordingly.

UK Sanctions

New round of various additional restrictions targeting Russia

On 28 October 2022, the UK adopted the Russia (Sanctions) (EU Exit) (Amendment) (No. 15) Regulations 2022. Broadly speaking, these measures include:

• Amended restrictions on making certain loans or credit available to "persons connected with Russia", subsidiaries of those persons; and entities owned by Russian individuals;
• Prohibitions on the export, supply, delivery, and making available of goods to or for use in Russia that are considered critical to the functioning of Russia’s economy, as identified in a new "Russia Vulnerable Goods" list, and related services;
• Expansion of the “G7 Dependency and Further Goods” list, which includes items that are subject to export restrictions, to further align the scope of such restrictions with the EU;
• Prohibition on the import of LNG which is consigned from or originates in Russia, and the acquisition of LNG which originates or is located in Russia, with the intention of the LNG entering the UK, and related technical assistance, financial services, funds and brokering services;
• Expansion of the list of revenue generating goods included in Schedule 2E, which are subject to export controls; and
• Prohibitions on the import of gold which incorporates gold that, on or after a certain date, originated in Russia and has been exported from Russia, as well as on the import of certain gold jewellery.

Apart from the ban relating to LNG, which enters into force on 5 December 2022, all of the above measures have entered into force.

Future prohibition on maritime transportation of Russian crude oil and oil products and associated services, and related price cap exemption.

The G7 and Australia stated in September that they would target seaborne transportation of Russian oil and oil products from Russia to and between third countries, unless purchased at or below a certain price cap (as described in our previous WR Sanctions Alert). The purpose of such a mechanism is to mitigate adverse consequences on energy supply to third countries and reduce price surges, while still limiting Russia's oil revenues.

On 3 November 2022, the UK adopted such a ban on maritime transportation of Russian oil and oil products and associated services, cf. the Russia (Sanctions) (EU Exit) (Amendment) (No. 16) Regulations 2022, and informed that a price cap exemption will follow in time for the entry into force of the bans. Broadly speaking, the prohibitions will target:

• the supply or delivery by ship of certain oil and oil products from Russia to a third country or between third countries (unless exempt or licensed); and
• the provision of financial services, funds or brokering services in pursuance of, or in connection with, an arrangement whose object or effect is the supply or delivery by ship of the specified oil or oil products from Russia to a third country or between third countries (unless exempt or licensed).

The maritime services ban and its price cap exception for oil will come into effect from 5 December 2022, and the equivalent restrictions and exception for refined oil products will come into force from 5 February 2023.

In respect of the related price cap exemption, OFSI informed on 14 November 2022 that it will, before 5 December, issue a General Licence which will allow for the above supply or delivery by ship of oil and oil products, and the provision of associated services, if purchased or sold at or under a set price ("cap") for that oil or oil product. The price cap will cover only the price of the oil or oil product, and not ancillary costs (such as transportation). Further information about the content, scope and operation of the bans and price cap exemption is available in OFSI's guidance document published 14 November 2022. On November 22 2022, the Department for Business, Energy & Industrial Strategy published a guidance on Russian oil and oil products, including on how to determine the origin of oil imports to the UK.

Additional designations and general licences

In recent weeks, the UK has also made several Russia related designations of individuals and entities to its consolidated (asset freezing) sanctions list. An overview of all recent OFSI notices, containing identifying information about the designated individuals and entities, is available here and the full UK sanctions list is available here.

Moreover, OFSI has also published and amended certain general licences relating to Russia. A full overview of general licences issued by OFSI can be found here.

US Sanctions

Implementation and further guidance on price cap exemption for Russian oil

On 22 November 2022, OFAC published a Determination pursuant to Executive Order 14071, to implement the price cap policy for Russian crude oil, as well as the OFAC Guidance on the Implementation of the Price Cap Policy for Crude Oil of Russian Federation Origin.

Following the Determination, exportation, reexportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of the following categories of services are prohibited, as they relate to the maritime transport of Russian crude oil:

• Trading/commodities brokering;
• Financing;
• Shipping;
• Insurance, including reinsurance and protection and indemnity;
• Flagging; and
• Customs brokering.

The Determination takes effect 12.01 a.m. EST on 5 December 2022.

However, to mitigate the effects of these service bans, the covered services are authorized "when the price of the crude oil of Russian Federation origin does not exceed the relevant price cap determined by the Secretary of the Treasury, in consultation with the Secretary of State."

Further, the Determination, the related guidance as well as the recently published FAQ 1094, makes clear that US service providers can continue to provide the covered services related to Russian crude oil purchased at a price above the price cap, provided that the oil is loaded onto a vessel at the port of loading for maritime transport prior to 5 December 2022 and unloaded at the port of destination prior to 19 January 2023.

In tandem with the Determination, OFAC issued three general licenses, relating specifically to the Sakhalin-2 project, import of crude oil to Bulgaria, Croatia or landlocked EU member states and transactions that are ordinarily incident and necessary to address vessel emergencies.

For further information and context, see also our previous WR Sanctions Alert and OFAC's preliminary guidance.

Additional designations and general licences

Since our last update, OFAC has published also other general licences which exempts acts that would otherwise be prohibited under Russia-related sanctions. The General Licenses are published on the Russian Harmful Activities Sanctions page.

In addition, the US has placed further individuals and entities on the SDN (asset freezing) list with basis in its Russia-related sanctions regime. The consolidated US SDN list can be found here.

EU Sanctions

Updated FAQs

After the adoption of the EU's 8th sanctions package in October (which is described in our update available here), the EU Commission has made several updates to its Russia related FAQs. The Commission has added answers on (among other things) the scope of the ban on the import of Russian oil and transactions with state-owned enterprises. 

Update regarding upcoming price cap exemption for Russian oil and oil products

In respect of the G7 commitment to introduce a price cap exemption for the maritime transportation of Russian-origin oil and oil products to third countries (mentioned above and in our previous update), the EU Commission has recently informed, e.g. to Reuters on 18 November 2022, that the EU expects to have the necessary legislation ready in time for the introduction of a price cap on 5 December 2022. The exemption will allow for the maritime transport and related services of Russian-origin oil and oil products to third countries if the oil or petroleum products are purchased at or below a pre-established price cap, which will be included in Annex XXVIII to Russia-related Council Regulation (EU) 833/2014 when agreed upon by the G7.

Additional designations

The EU has sanctioned certain additional individuals and entities under its Russia-related regime since our last update, including Iranian individuals and one Iranian entity for being involved in the production or delivery to Russia of Iranian combat drones used by Russia in its war against Ukraine. The consolidated list of individuals and entities that are subject to EU asset freezing measures can be downloaded here.

G7 statement on continued sanctions commitment

On 11 October 2022, the G7 issued a statement in which the G7 leaders reiterated their joint commitment to continue to impose further economic costs on Russia, including on individuals and entities – inside and outside of Russia – providing support for Russia’s illegal attempts to change the status of Ukrainian territory

WR Sanctions Alerts provide you with updates on material developments in the country-specific sanctions programmes implemented by the US, the UN, the UK, the EU and Norway. We will not provide updates on mere prolongations, without material changes, of existing sanctions programmes, nor on any listings or de-listings of individuals/entities placed on implemented sanctions lists . Please note that the WR Sanctions Alerts are provided as general information and do not constitute legal advice.