US and UK impose new sanctions on Russia
Earlier today, on 24 February 2023, one year after Russia's full scale invasion of Ukraine began, the US and the UK imposed further sanctions on Russia. As of yet, no consensus has been reached on the EU's tenth package of sanctions.
Below, we briefly summarize today's developments, and also comment on the recently increased focus on circumvention of sanctions.
Today, the US, in coordination with the G7, has adopted new sanctions on Russia, in a combined effort by the Department of Treasury, Department of State, Department of Commerce and the Office of the US Trade Representative. New US measures include:
- OFAC is issuing a determination allowing for sanctions to be imposed on any individual or entity determined to operate or have operated in the Russian metals and mining sector. Four entities have been designated under the new legal basis.
- The Bureau of Industry and Security is expanding the scope of existing Russian and Belarusian industry sector restrictions relating to oil and gas production, commercial and industrial items, chemical and biological precursors, as well as certain luxury goods.
- Imposition of higher tariffs on certain metal and metal products, chemicals and minerals.
- A large number of new designations, including:
- 11 Russian banks including the Credit Bank of Moscow, Lanta Bank and MTS bank, and 3 financial institutions.
- Several Russian wealth management-related entities.
- Targeting Russian sanctions evasion, certain persons and entities have been designated for circumvention (notably, all of them non-Russian).
- Nurmurad Kurabnov, an arms dealer supporting Russia and Belarus.
- Russian businessman Aleksandr Yevgenyevich Udodov and several companies linked to him, have been designated for operating or having operated in the management consulting sector of the Russian economy.
- Targeting Russia's military supply chains, several entities that produce carbon fiber and related advanced materials, entities that operate in Russia's Aerospace Sector, entities that operate in Russia's technology and electronics sectors have been designated.
OFAC are also issuing new General Licenses and new FAQs relating to today's actions, which can be found at this link.
For more information see an OFAC press release at this link, and a statement from Secretary of State Blinken at this link.
The UK also announced new sanctions today, including:
- An export ban on every item Ukraine has found Russia using on the battlefield to date.
- An import ban on 140 goods including iron and steel products processed in third countries.
- Existing measures against Crimea, and non-government controlled territory in Donetsk and Luhansk oblasts are extended to target Russian controlled areas of Kherson and Zaporizhzhia oblasts, restricting their access to UK trade and finance.
- 92 entries have been added to the UK's Russia regime, including four Russian banks as well as persons linked to Gazprom, the defence company Rostec, the state-owned nuclear power company Rostatom, and the CEO of Nord Stream 2.
For more information, the notice from OFSI can be found at this link and a press release at this link.
Today's UK listings follow the designations of 6 entities providing military equipment for Russia's invasion of Ukraine as well as 8 persons and 1 entity connected to the Kremlin elite, on 8 February 2023. The OFSI press release and notice can be found at this link.
On the topic of circumvention, which is a known risk in today's geopolitical landscape and highlighted by the various authorities as a key risk, we note that the Financial Times published an article earlier this week emphasising that as trade flows to Russia from the EU has dropped, countries in the Russian vicinity have seen unusual spikes. Countries such as Kyrgyzstan, Armenia, Kazakhstan and Georgia are mentioned specifically.
According to the Financial Times, Germany's deputy chancellor also stated recently that Berlin will crack down on companies that dodge western sanctions, and that sanctions evasion is no misdemeanour.
The G7 will also reportedly set up a tool to bolster and coordinate enforcement of Russia sanctions, see this Bloomberg article.
This emphasizes the heightened risk of circumvention and enforcement in today's geopolitical landscape.
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.