September 27, 2024

Russia/Ukraine Sanctions Update - Month of September

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US Sanctions | EU Sanctions | UK Sanctions | Russia/Ukraine Sanctions | Other Notable Developments

I. US SANCTIONS

U.S. Department of the Treasury Acts Against Russian Virtual Currency Exchanges: On September 26, the U.S. Department of the Treasury announced that its Financial Crimes Enforcement Network issued an order that identifies PM2BTC, a Russian virtual currency exchanger associated with Sergey Sergeevich Ivanov, as being of “primary money laundering concern” in connection with Russian illicit finance. Concurrently, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) sanctioned Ivanov and Cryptex, a virtual currency exchange registered in St. Vincent and the Grenadines and operating in Russia, determined to be part of a coordinated international effort to disrupt Russian cybercrime services. Read more >>
U.S. Department of Commerce Announces Proposed Rule toSecure Connected Vehicle Supply Chains: On September 23, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) published a Notice of Proposed Rulemaking that would prohibit the sale or import of connected vehicles integrating specific pieces of hardware and software, or those components sold separately, with a sufficient nexus to the People’s Republic of China or Russia. Read more >>
U.S. Department of the Treasury Designates Entities and Individual Linked to Sanctions Evasion Scheme:On September 19, OFAC designated a network of five entities and one individual, based in Russia and in the Russia-occupied Georgian region of South Ossetia, determined to have enabled and supported ongoing efforts to establish illicit payment mechanisms between Russia and the Democratic People’s Republic of Korea (“DPRK”). The Treasury Department’s announcement highlighted that these actions demonstrate its “commitment to exposing and disrupting networks that facilitate the funding of the DPRK’s unlawful weapons of mass destruction (WMD) and ballistic missile programs and support Russia’s illegal war against Ukraine.” Read more >>
U.S. Department of State Sanctions Those Connected to Russia’s Destabilizing Actions Abroad: On September 13, the Department of State designated Rossiya Segodyna, a Russian state-owned and state-funded broadcast agency headquartered in Moscow, as well as its Director General, and Autonomous Non-Profit Organization TV-Novosti, a federally funded organization associated with Rossiya Segodnya that controls the RT media channel. The Department also announced the designation of an entity and individual determined to be linked to Russia’s continued efforts to undermine Moldovan democracy. Read more >>
U.S. Department of the Treasury Sanctions Actors Facilitating Iran’s Transfer of Lethal Aid to Russia: On September 10, OFAC designated ten individuals and six entities based in Iran and Russia and identified four vessels as blocked property after determining their role in enabling Iran’s delivery of weapons components and weapons systems, including unmanned aerial vehicles and close-range ballistic missiles, to Russia. The Department of State also designated Iran Air, two Russia-based shipping companies, and five vessels due to their determined facilitation of Iran-Russia cooperation. Read more >> and Read more >>
U.S. Department of State Issues Further Sanctions to Degrade Russia’s Ability to Operationalize the Arctic LNG 2 Project: On September 5, the Department of State sanctioned two entities, Gotik Energy Shipping Co. and Plio Energy Cargo Shipping OPC PVT LTD, and two vessels determined to be connected to attempts to export liquefied natural gas from the U.S.-sanctioned Arctic LNG 2 project. Read more >>
U.S. Department of the Treasury Responds to Targeting of 2024 U.S. Presidential Election: On September 4, OFAC designated ten individuals and two entities as part of a coordinated U.S. government response to Moscow’s malign influence efforts targeting the 2024 U.S. presidential election. The designations include the leadership of RT, formerly Russia Today, a Russian-state funded news outlet, andAutonomous Non-Profit Organization Dialog, a Russian nonprofit organization that “leverages AI technology in online Russian disinformation for the use against election campaigns.” These designations complement actions taken by the Department of Justice and the Department of State, detailed below. Read more >>
U.S. Department of State Takes Actions to Counter Russian Influence and Interference in U.S. Elections: On September 4, the Department of State imposed new visa restrictions on individuals who were determined to be acting on behalf of Kremlin-supported media organizations and responsible for, or complicit in, engaging in covert influence. The Department of State also designated, pursuant to the Foreign Missions Act, Rossiya Segodnya, RIA Novosti, RT, TV-Novosti, Ruptly, and Sputnik, which will now be required to notify the Department of all personnel working in the United States. Finally, the Department of State, through its Rewards for Justice program, announced a reward offer of up to $1 million for information leading to the arrest and/or conviction in any country of Tim Vakhaevich Stigal, alleged to have engaged in multiple significant computer intrusions targeting U.S. businesses, for participating in, conspiring to participate in, or attempting to participate in transnational organized crime. Read more >> and Read more >>
Export Enforcement Five Governments Reaffirm Commitment to Robust Export Control Enforcement: On September 18, BIS announced that the governments of Australia, Canada, New Zealand, the United Kingdom, and the United States (collectively, the “Export Enforcement Five”) reaffirmed their commitment to robust enforcement of export controls on Russia. Read more >> and Read more >>
U.S. Announces Significant Military Assistance for Ukraine: On September 25, the Department of State announced $375 million of new assistance to Ukraine, which includes additional munitions and support for the High Mobility Artillery Rocket System; 155mm and 105mm artillery ammunition; cluster munitions; armored, Mine Resistant Ambush Protected and light tactical vehicles; patrol boats; small arms; and anti-armor capabilities, including, Javelin missiles, Tube-launched, Optically-tracked, Wire-guided missiles, and AT-4 (Anti-Tank) rockets; as well as spare parts, ancillary equipment, services, training, and transportation. Read more >>
G7 Issues Statement Condemning Iran’s Export and Russia’s Procurement of Iranian Ballistic Missiles: On September 14, the G7 Foreign Ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States and the High Representative of the European Union issued a statement condemning “in the strongest possible terms Iran’s export and Russia’s procurement of Iranian ballistic missiles.” Read more >>
U.S. Citizens Found Guilty of Conspiring to Act as Illegal Agents of the Russian Government: On September 12, the Department of Justice announced that four U.S. citizens were found guilty of conspiring to act as agents of the Russian government due to their attempts to undermine the U.S. under the direction of the Moscow-based Federal Security Service. Read more >>
U.S. Department of State Announces Additional Assistance to Ukraine: On September 11, the Department of State announced more than $700 million in new assistance to Ukraine, which includes $325 million in assistance to support Ukraine’s energy infrastructure efforts, nearly $290 million in humanitarian assistance, and over $102 million in humanitarian demining assistance. Read more >>
Israeli Freight Forwarder Pleads Guilty to Violating Export Restrictions Imposed on Russia: On September 10, the Department of Justice announced that an Israeli freight forwarder pleaded guilty to export control and smuggling violations for his role in a scheme to illegally ship aircraft parts and avionics from U.S. manufacturers and suppliers to Russia, including for the benefit of sanctioned Russia airline companies. Read more >>
U.S. Department of Justice Charges Russian Officers and Civilian for Conspiring to Hack Ukrainian Government: On September 5, the Justice Department unsealed an indictment charging six computer hackers due to their alleged engagement in a conspiracy to hack into, exfiltrate data from, leak information obtained from, and destroy computer systems associated with the Ukrainian Government in advance of the Russian invasion of Ukraine. The Justice Department also announced the indictment of two individuals for their alleged participation in a scheme to violate U.S. sanctions for the benefit of sanctioned Russian broadcaster, Channel One Russia, and to launder funds obtained from that scheme. Read more >> and Read more >>
U.S. Justice Department Announces Seizure of Domains Linked to Russian Foreign Malign Influence: On September 4, the Justice Department announced the ongoing seizure of 32 internet domains allegedly used in Russian government-directed foreign malign influence campaigns, colloquially referred to as “Doppelganger,” in violation of U.S. money laundering and criminal trademark laws. The Justice Department also announced the indictment of two RT employees for their alleged “$10 million scheme to create and distribute content to U.S. audiences with hidden Russian government messaging. Read more >> and Read more >>

II. EU Sanctions

EU Council Prolongs Individual Sanctions Against Russia for a Further Six Months: On September 12, the EU Council decided to prolong measures targeting those responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for another six months, until 15 March 2025. The existing sanctions include travel restrictions for natural persons, the freezing of assets, and a ban on making funds or other economic resources available to the listed individuals and entities. Sanctions will continue to apply to over 2200 individuals and entities. Read more >> and Read more >>
EU Discusses Russia Sanctions Circumvention with Industry Executives: On September 10, EU Trade Commissioner Valdis Dombrovskis and Commissioner for Financial Services Mairead McGuinness chaired a roundtable with senior executives from key EU companies trading in Common High Priority items. Participants discussed how EU industry, in close cooperation with governments and EU institutions, could engage in a trust-based partnership to tackle the circumvention of EU sanctions on sensitive goods. They also shared perspectives on compliance risks, best practices against circumvention, the protection of EU know-how and intellectual property from misuse abroad, and ways to tackle smuggler networks and illicit actors. Read more >>
European Commission Updates Its FAQs on Sanctions Against Russia: The updated Frequently Asked Questions on sanctions against Russia issued in September 2024 cover the following sanction topics: asset freeze and prohibition to make funds and economic resources available (Council Regulation 269/2014) and provision of services (Article 5n of Council regulation 833/2014). Read more >> and Read more >>
Latvian Court Seeks Preliminary Ruling on Notion of ‘Associated Person’: A request for a preliminary ruling from the Latvian Supreme Court (Augstākā tiesa, Senāts) lodged on July 9, 2024, has been published in the Official Journal of the EU. The referring court is seeking clarification on the concept of 'associated person' within the meaning of Article 2 of Council Regulation 269/2014. In particular, the referring court is asking whether a legal person must be regarded as an associated legal person if 50% of its shares belong to a legal person and the beneficial owner of the latter is a natural person appearing on the list in the annex to Council Implementing Regulation (EU) 2022/336, implementing Regulation 269/2014. Read more >>
Croatian Court Seeks Preliminary Ruling in Dispute Involving Gazprom:A request for a preliminary ruling from the Croatian High Commercial Court lodged on June 10, 2024, has been published in the Official Journal of the EU. The request concerns an ongoing dispute around the security of a claim and the potential transfer of EUR 35 million from an EU-based commercial company to a Russian company. Read more >>
EU's Court of Justice Interprets EU Prohibition on Legal Advisory Services to Russian Entities: By its judgment of September 5, the Court of Justice ruled that a notary does not breach the sanctions against Russia when he or she authenticates the sale of a property owned by an unlisted Russian company. The Court held that by authentication, a notary does not provide legal advisory services, but acts independently and impartially in the context of a function entrusted to him or her by the State. Read more >>
EU's Court of Justice Rules that Confiscation of the Entire Proceeds from Brokering Military Equipment to Russia is Permitted: By its judgment of September 10, the Court of Justice ruled that the prohibition on providing brokering services in relation to military equipment to an operator in Russia applies even if those goods were never imported into a Member State. The Court also considered that EU law permits the automatic confiscation of the full amounts received in relation to the provision of brokering services concerning military equipment to an operator in Russia. Admittedly, this limits the provider’s right to property over those amounts. Nevertheless, the Court observed that such a limitation is appropriate in order to ensure that the prohibition in question is effective and, consequently, proportionate in principle in the light of the legitimate objectives pursued by the European Union, that is, the protection of Ukraine’s territorial integrity, sovereignty and independence. Read more >>
EU's General Court Upholds Council’s Power to Impose Reporting and Cooperation Obligations: By its judgment of September 11, the General Court dismissed actions brought by the parties concerned in cases T-635/22 Fridman and Others and T-644/22 Timchenko and Timchenko against the Council regulation laying down obligations to report funds and to cooperate with the competent national authorities. The General Court recalled that EU law permits the adoption of regulations by the Council in order to implement or give effect to restrictive measures so as to ensure their uniform application in all Member States. The Council was entitled to adopt reporting and cooperation obligations, even though they were not expressly provided for in the decision to which they relate. Read more >> and Read more >>
EU's General Court Confirms EU Sanction Against the Russian Finance Company NSD: By its judgment of September 11, the General Court dismissed NSD’s action against acts by which its name was included and maintained on the lists of persons subject to the restrictive measures. In response to NSD’s argument that the sanctions imposed on it entailed the freezing of funds and economic resources belonging to its customers – who are not subject to those measures – and, therefore, the infringement of their right to property, the Court recalled that NSD cannot rely, in its action for annulment, on a right to property that it does not hold. However, the Court observed that when examining a request for the release of those customers’ assets, under a derogation laid down by the Council for that purpose, the national authorities must ensure that the interference with the right to property of the customers concerned follows the conditions laid down in Article 52 of the Charter of Fundamental Rights of the European Union. Read more >>
EU's General Court Annuls the Sanctions Listing of Maya Tokareva, Pavel Ezubov and Andrey Anatolyevich Kozitsyn: By its judgments of September 11, the General Court annulled the designation of Maya Tokareva and Pavel Ezubov. By its judgment of September 1, the General Court annulled one of the acts maintaining Andrey Kozitsyn listing. Read more >>, and Read more >>
EU's General Court Dismisses Actions Against EU Sanctions Brought by Belaruskali AAT, Belarusian Potash Company AAT and Ivan Golovaty: By its judgments of September 18, the General Court dismissed three actions against EU sanctions brought respectively by Belaruskali AAT, a major Belarusian potash producer, Ivan Golovaty, its director-general, and Belarusian Potash Company AAT, its exporting entity. Read more >>, Read more >> and Read more >>
EU's General Court Dismisses Action Against EU Sanctions Brought by Several Individuals: By its judgments delivered in September, the General Court dismissed several actions brought by Igor Albertovich Kesaev, Kirill Shamalov, a Russian businessman OT, Marina Alexandrova Mordashova, and Musa Yusopovich Bazhaev. Read more >>, Read more >>, Read more >>,Read more >>, Read more >> and Read more >>
Two Suspects Agree on a Settlement after Suspicion of Violations of Sanctions: Two suspects representing company based in Amsterdam, the Netherlands, have agreed on a settlement with the Public Prosecution Service of the Netherlands after the company paid out approximately 18 million euros in dividends to a Russian company that was hiding an individual subject to EU sanctions. Read more >>
EU Weighs Expanding Sanctions on Exports to Russia: The EU is considering extending its sanctions regime against Russia to include the foreign subsidiaries of European companies in order to restrict the flow of sensitive goods reaching the country’s war machine. Since Russia’s full-scale invasion of Ukraine, the EU has imposed 14 packages of sanctions against Moscow. These include export controls to stop Moscow procuring goods crucial to its war effort. The EU has also banned re-exports of certain sensitive goods via third countries. But discussions on further rounds of sanctions, which have to be agreed unanimously by all 27 member states of the EU, have become increasingly fraught as countries find fewer areas on which they can agree without damaging their own economies. Read more >>
EU Member States Sharing Border with Russia Discuss Implementation of EU Sanctions: On September 17, five EU Member States Estonia, Finland, Latvia, Lithuania and Poland held their third meeting on sanctions cooperation. The meeting addressed specific measures to prevent the circumvention of sanctions imposed against Russia and Belarus. Participants also discussed the possibility to impose additional restrictive measures. Read more >>

III. UK Sanctions

UK specifies 5 ships and adds 2 new entries to the UK sanctions list under the Russia sanctions regime:On September 26, the UK Government specified 5 ships and added two entities involved in Russia’s LNG sector, namely Ocean Speedstar Solutions OPC PVT Ltd and White Fox Ship management FZCO, under the Russia sanctions regime. According to the FCDO, these sanctions build upon the sanctions against the Arctic LNG 2 project by targeting ships and entities that engage with "projects important to Russia's future energy production." Read more >> and Read more >>
UK Government updates factsheet on UK support to Ukraine:On September 20, the UK Government updated a factsheet setting out the UK’s support to Ukraine. Among other things, the factsheet states that the UK has sanctioned over 2,000 individuals and entities, 1,700 of which have been sanctioned since Russia's full-scale invasion, and on September 11, 2024, the UK announced sanctions on another 10 vessels in Russia’s “shadow fleet”. Read more >>
UK Government publishes civil monetary penalty guidance in relation to UK transport sanctions: On September 13, the UK’s Department for Transport (DfT) published civil monetary penalty guidance in relation to UK transport sanctions. DfT acquired the power to issue civil monetary penalties in relation to breaches of shipping and aircraft sanctions under the Trade Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024. The guidance sets out inter alia DfT’s approach to case assessment and enforcement. Read more >>
UK Government launches Office of Trade Sanctions Implementation (OTSI): On September 12, the UK Government published the regulatory framework providing the scope and powers of the (OTSI), the authority responsible for the implementation and enforcement of certain trade sanctions in the United Kingdom. Pursuant to the Trade, Aircraft and Shipping Sanctions (Civil Enforcement) Regulations 2024, which comes into force on 10 October 2024, OTSI will be empowered to impose civil monetary penalties and require information disclosure, similar to OFSI. Certain persons in the financial, legal, shipping and aviation sectors will also be subject to reporting obligations Read more >> and Read more >>
UK specifies ten ships under the Russia sanctions regime:On September 11, the UK Government specified ten ships under the Russia sanctions regime. According to the FCDO, these sanctions target Russia's "shadow fleet", which use illicit practices to avoid sanctions targeting Russian oil. These ships are now barred from entering UK ports and will be refused access to the UK Ship Register. Read more >>
UK Government adds three entries to the UK sanctions list and specifies five ships under the Russia regime: On September 10, the UK Government added three entities, namely 924th State Center for Unmanned Aviation, Command of the Military Transport Aviation and Russian Aerospace Forces, to the UK Sanctions List under the Russia regime. The UK Government also specified five ships. According to the FCDO, those designated and specified are involved in Iran’s military support to Russia, including parties involved in ballistic missile and drone supply chains. Read more >>
UK Government introduces statutory instrument to amend legal advisory services ban and revokes legal services general licence:On September 6, the UK introduced The Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2024, which inter alia amended the legal advisory services prohibition set out in Regulation 54D of the Russia (Sanctions) (EU Exit) Regulations 2019. Among other things, the amendments introduce a knowledge requirement the legal advisory services prohibition and clarifies that the provision of sanctions compliance advice in respect of any “relevant law” falls outside the scope of the prohibitions. At the same time, the UK Government revoked the Legal Advisory Services General Trade Licence, as the update to Regulation 54D meant that this General Trade Licence is no longer required. Read more >>, Read more >> and Read more >>
UK Government amends guidance on providing professional and business services to a person connected with Russia: On September 6, the UK Government amended its guidance on the professional services sanctions targeting Russia to reflect the amendment to Regulation 54D of the Russia (Sanctions) (EU Exit) Regulations 2019. This includes guidance on applying for licences and on what information to include licence application cover letters related to the professional services and legal services prohibitions. Read more >>
UK Government updates its guidance on the Russia regime:On September 1, 4 and 6, the UK Government updated its Russia sanctions guidance. Among other things, the guidance was updated to reflect updated licencing information of third country processed Russian diamonds (in relation to Regulation 46Z16R) and amendments to the legal services prohibition. Read more >>
UK Government updates General Trade Licence for sanctioned Russian diamonds processed in third countries: On September 1, the UK Government updated its General Trade Licence for sanctioned Russian diamonds processed in third countries In particular, the General Trade Licence has been expanded to authorise the import of relevant processed diamonds equal to or larger than 0.5 carats and smaller than 1 carat outside of Russia so long as the relevant diamond is not located in Russia anytime from September 1, 2024, as well as related services. Read more >>
UK updates Russia sanctions guidance:On September 1, the UK government updated its Russia sanctions guidance. In particular, the guidance relating to the import prohibition in Regulation 46Z16R was amended to update licensing information of third country processed Russian diamonds and to include new links to guidance. Read more >>

IV. Russia/Ukraine Sanctions

Russia accuses the West of using sanctions and human rights regimes to promote unfair competition: On September 26, Putin accused the West of using its sanctions and human rights regimes as instruments to "oust [Russia] from the [energy] market". Putin stated his belief that "the West does not want competition because it cannot cope with it. It often loses in a fair fight. It resorts to discrimination, which it cloaks in the garb of ostensible Euro-Atlantic solidarity, the campaign for human rights and so on." Read more >>
Senior Ukrainian politician briefs U.S. Delegation on Ukraine's security situation: On September 26, it was announced that Andriy Yermak, the Head of President Zelensky's Office, has held a meeting with (amongst others) the U.S. Principal Deputy National Security Advisor Jon Finer. Yermak sought to further Ukraine's relationship with the United States and stated, "The United States is our friend, we are strategic partners, and we want to be completely open, because without trust it is impossible to advance together towards Ukraine's victory". Yermak also emphasized the need for a strengthening of the sanctions regime in the financial sector to prevent Russia from undertaking cross-border transactions Read more >>
Russian Central Bank extends curbs on transferring funds abroad: On September 23, Russia's Central Bank extended restrictions on transferring funds abroad for another six months until March 31, 2025. The restrictions prohibit firms from "unfriendly countries" still operating in Russia from transferring money abroad. Foreign companies controlled by Russian individuals or entities are exempt from this ban. Read more >>
Ukraine imposes new sanctions against individuals and entities from Russia: On September 19, President Zelensky signed a decree which imposed sanctions against Russian citizens lexander Fedorko, Igor Dyugurov, Valentina Grigorieva, Liliya Alimova and their Russia-based businesses. Ukraine also imposed sanctions against six individuals associated with the supply and procurement of drones to Russia, including the director of Iranian company Pishgam Electronic Safeh Company, Hamid Reza Janghorbani Read more >>

V. Other Notable Developments

New Zealand Introduces New Package of Sanctions Against Russia and Belarus: On September 20, New Zealand designated five individuals and six entities, including Belarusian individuals and entities, determined to be providing material support to the Russian invasion and a Russian entity determined to be involved in Russia’s illegal occupation and control of Ukraine’s Zaporizhzhya Nuclear Power Plant. Read more >>