Russia/Ukraine Sanctions Update - Month of December

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

I.  US SANCTIONS

• U.S. Department of the Treasury Designates Russian Construction Director and Issues Russia-Related General Licenses: On December 18, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) designated Viktor Pavlovich Perevalov, the First Deputy Director of a U.S.-designated Russia-based construction company determined to have built infrastructure throughout Russia, as well as highways in Russia-occupied Crimea. OFAC previously designated Perevalov on January 26, 2018 pursuant to Executive Order (“E.O.”) 13685 and is now designating Perevalov pursuant to E.O. 14024 for operating or having operated in the construction sector of the Russian Federation economy. OFAC also issued Russia-related General License 1B, "Authorizing Certain Activities Involving Federal State Budgetary Institution Marine Rescue Service," and Russia-related General License 115 "Authorizing Transactions Involving Gazprombank Related to Civil Nuclear Energy." (Read more>>)
• U.S. Department of the Treasury Sanctions Key Facilitators Behind North Korea’s Support to Russia: On December 16, OFAC sanctioned nine individuals and seven entities determined to have provided financial and military support to the Democratic People’s Republic of Korea (“DPRK”), which has, in turn, supplied Russia with critical military support for its war on Ukraine. OFAC also sanctioned three targets related DPRK’s ballistic missile program. (Read more>>)
• U.S. Department of the Treasury Sanctions Money Laundering Network of Russian Elites: On December 4, OFAC sanctioned five individuals and four entities determined to be connected to the TGR Group, a “sprawling international network of businesses and employees that have facilitated significant sanctions circumvention on behalf of Russian elites.” (Read more>>)
• U.S. Department of State Releases Joint Statement on DPRK-Russia Cooperation: On December 16, the State Department released a joint statement with the Foreign Ministers of Australia, Canada, France, Germany, Italy, Japan, the Republic of Korea, New Zealand, the United Kingdom, and the High Representative of the European Union. The statement condemned “in the strongest possible terms the increasing military cooperation between the [DPRK] and the Russian Federation, including the deployment of DPRK troops to Russia for use on the battlefield against Ukraine.” (Read more>>)
• U.S. Justice Department Announces Sentencing of Russian National: On December 12, the Justice Department unsealed an indictment charging a Russian national, Alexey Komov, with conspiracy and violations of U.S. sanctions arising from his alleged assistance to sanctioned Russian oligarch, Konstantin Malofeyev. Specifically, Komov is alleged to have conspired with Malofeyev and others to illegally transfer a $10 million investment that Malofeyev had made in a U.S. bank to a business associate in Greece, in violation of the sanctions blocking Malofeyev’s assets from being transferred. (Read more>>)
• U.S. Justice Department Charges Manager of U.S. Freight Forwarding Company with Circumventing Export Controls: On December 11, the Justice Department unsealed an indictment charging a regional manager of a U.S. freight forwarding company for her alleged falsification of documents and circumvention of U.S. sanctions by illegally shipping oil and gas products to Russian costumers. (https://www.justice.gov/opa/pr/manager-us-freight-forwarding-company-indicted-circumventing-export-controls)
• U.S. Department of State Announced Consideration of Visa Restrictions Related to Forced Transfer and Deportation of Ukrainian Children: On December 4, the State Department announced it is considering visa restrictions for five Russian officials and authorities backed or installed by Russia for their alleged involvement in human rights abuses in Ukraine, including the forced deportation, transfer, and confinement of Ukrainian children. (Read more>>)
• U.S. Justice Department Files Civil Forfeiture Compliant Against Sanctioned Oligarch’s U.S. Music Studio Sale Proceeds: On December 2, the Justice Department announced it filed a civil forfeiture compliant for $3.4 million in proceeds from the sale of a music studio in California which are beneficially owned by Russian oligarch, Oleg Deripaska, and are the alleged proceeds of sanctions violations. (Read more>>)
• U.S. Justice Department Announces Arrest of Russian National for Attempting to Illegally Export Aircraft to Russia: On December 2, the Justice Department announced the arrest of a Russian national on charges related to his alleged attempt to export two small aircraft to Russia through Armenia. (Read more>>)

II.  EU Sanctions

• EU Adopts 15th Sanctions Package Against Russia: On December 16, the EU adopted the 15th package of sanctions against Russia imposing a significant number of asset freeze measures. In addition, the 15th package provides for several amendments to Regulation 833/2014, which is the main regime providing for sectoral sanctions relating to Russia. The 15th package of sanctions also seeks to better protect EU companies by restricting the effectiveness of anti-suit injunctions in Russia, introducing “no liability” clauses for central securities depositories, and extending the derogations permitting orderly exits from the Russian market. (Read more>>; Read more>> ; Read more>> ; Read more>> ; Read more>> ; Read more>>).
• EU Agrees First Listings in Response to Russia's Destabilizing Activities Against the EU: On December 16, the EU imposed restrictive measures consisting of asset freeze and travel ban measures against 16 individuals and three entities responsible for Russia’s destabilizing actions abroad. These listings cover amongst others GRU Unit 29155, a covert unit within the Russian military intelligence agency (GRU), the Groupe Panafricain pour le Commerce et l’Investissement, a disinformation network carrying out pro-Russian covert influence operations, and African Initiative, a news agency involved in spreading Russian propaganda and disinformation on the African continent. (Read more>>).
• EU Adds Listings in View of the Situation in Belarus: On December 16, the EU imposed restrictive measures on additional 26 individuals and 2 entities from Belarus, in view of the situation in the country. Restrictive measures were imposed on various members of the judiciary, heads and deputy heads of various correctional institutions, as well as business owners, part-owners, associates, or members of boards of directors. (Read more>>).
• EU Global Human Rights Sanctions Regime Extended for a Further Year: The EU decided to prolong and update the list of individuals, entities, and bodies subject to restrictive measures against serious human rights violations and abuses in specific countries, including in Russia and in Belarus, for a further year until 8 December 2025. (Read more>> ; Read more>>).
• European Commission Updates FAQs on EU Sanctions: The updated FAQs on sanctions against Russia issued in December 2024 cover the sanction topics on circumvention and due diligence, enhanced due diligence for operators manufacturing and/or trading with CHP items, "No re-export to Russia” clause, divestment from Russia, and restrictions on diamonds. (Read more>> ; Read more>> ; Read more>> ; Read more>> ; Read more>>).
• EU's General Court Dismisses Actions Against EU Sanctions Brought by Rosbank and Tinkoff Bank: By its judgments delivered in December 2024, the General Court dismissed the action brought by Rosbank PAO and Tinkoff Bank SA challenging their listings. The banks argued that their tax contributions were negligible compared to the federal budget, that EU sanctions targeted their owners, that the Russian banking sector experienced a decline in activity in 2022, and that the sanctions prevented their customers from accessing funds. The General Court found that Rosbank's profit levels indicated non negligible economic activity, noting it was one of the top five lenders in Russia, thus contributing to the banking sector. Tinkoff Bank was recognized as the third largest private bank in Russia and a key player in financial technology. The General Court also determined that arguments about ownership were irrelevant to assessing contributions to the financial sector and emphasized that the banking sector significantly contributed to Russia's economy, despite any losses it may have incurred. Furthermore, the General Court highlighted that provisions existed for competent authorities to release funds to non-designated individuals, and the bank could not claim a property right it did not possess. (Read more>> ; Read more>>).
• EU's General Court Dismisses Actions Against EU Sanctions Brought by Oleg Vladimirovich Deripaska: By its judgment delivered on December 18, 2024, the General Court dismissed action brought by Oleg Vladimirovich Deripaska against his listing. (Read more>>).
• EU’s Sanctions Envoy on Russia's Sophisticated Networks to Evade EU Sanctions: According to the EU’s sanctions envoy, David O’Sullivan, Russia has developed increasingly sophisticated networks to circumvent sanctions levelled against it by the EU and other western allies, in what has become a constant game of “cat and mouse”. Through a complex chain of transactions often involving multiple shell companies, battlefield products and components made in European factories move through places such as Turkey, Gulf states, southeast Asia and later China, to disguise the fact they are to ultimately end up in Russia to be used in the war against Ukraine. (Read more>>).
• EU Pushes for Stricter Sanctions on Russian Metals: A coalition of ten EU member states has called for enhanced sanctions on Russian metals, including aluminium, in an effort to curtail Moscow’s revenue streams further. The initiative is spearheaded by Poland, which is set to assume the rotating presidency of the EU Council in January 2025, succeeding Hungary. Other signatories include the Baltic states, Denmark, Ireland, Romania, Sweden, the Czech Republic, and Finland. The letter underscores the economic significance of Russia’s metal exports.  (Read more>>).

III.  UK Sanctions

• UK Government Updates Factsheet on UK Support to Ukraine: On December 20, the UK Government updated its factsheet setting out the UK’s support to Ukraine. Among other things, the factsheet states that the UK has sanctioned over 2,100 individuals and entities, 1,900 of which have been sanctioned since Russia's full-scale invasion of Ukraine. (Read more>>)
• UK Government Amends One Entry on the UK Sanctions List under the Russia Regime: On December 18, the UK Government amended the entry for Autel Robotics Co., Ltd on the UK sanctions list under the Russia sanctions regime. This entity remains subject to an asset freeze and trust services sanctions. (Read more>>)
• UK Government Adds Two Entries to the UK Sanctions List and Specifies 20 Ships under the Russia Regime: On December 17, the UK Government added 2Rivers DMCC and 2Rivers PTE Ltd to the UK sanctions list and specified 20 ships under the Russia regime. According to the UK Government, these measures, which include targeting 20 shadow fleet ships, will “further drain Putin’s war chest.” (Read more>>)
• UK Government Adds One Individual to the UK Sanctions List under the Russia Regime: On December 9, OFSI added Anto Joseph to the UK sanctions list under the Russia regime. Joseph is the CEO and manager of several gold trading companies, including Paloma Precious, which was designated by the UK Government in November 2023. According to the UK Government, Paloma Precious has purchased more than USD 300 million of Russian gold, thereby indirectly providing revenue for the Government of Russia which could be used to fund its war in Ukraine. (Read more>>; Read more>>)
• Updates to certain UK sanctions regimes (including the Russia regime) come into force: On December 5, updates to certain UK sanctions regimes (including the Russia sanctions regime) came into force pursuant to the Sanctions (EU Exit) (Miscellaneous Amendments) (No.2) Regulations 2024, which has been laid before the UK Parliament on November 14, 2024. Among other things, the new regulations: (i) changes the existing requirements on "relevant firms" and "involved persons" to report suspected offences to a requirement to report suspected breaches of sanctions regulations; (ii) creates a new insolvency licensing purpose under certain UK sanctions regimes; and (iii) introduces new civil monetary penalty powers for breaches in relation to Russia land prohibitions. OFSI has also updated the guidance for each of the sanctions regimes updated by these new Regulations. The Regulations also expand the definition of “relevant firms” subject to financial sanctions reporting obligations to cover high value dealers, art market participants, letting agents and insolvency practitioners with effect from 14 May 2025.  (Read more>>)

IV.  Russia/Ukraine Sanctions

• Ukraine Sanctions 19 Georgian Officials: On December 5, President Zelensky sanctioned 19 high-ranking Georgian officials who he said are "surrendering Georgia to (Russian President Vladimir) Putin." Among the designations is Bidzina Ivanishvili, an oligarch with business ties in Russia who is said to be the unofficial leader of the Georgia's ruling Dream party and Prime Minister Irakli Kobakhidze. This announcement came amid a series of anti-government protests in Georgia following the EU's decision to postpone Georgia's EU accession process until at least 2028. (Read more>>).
• Russia Adds 30 UK Nationals, including Certain UK Ministers, to its “Stop List”: On November 26, Russia added 30 UK national to its entry ban list over reported “reckless policies” and “anti-Russian activities” of the UK Government. The targeted individuals included senior UK cabinet ministers Angela Rayner, Yvette Cooper, and Rachel Reeves. (Read more>>; Read more>>)
• Ukraine Announced the Stop of Transit of Russian Gas through Ukraine: Ukraine will stop transiting Russian gas at 7:00 on January 1, 2025, when the agreement between the countries expires. This was announced by Ukrainian Prime Minister Denis Shmyhal in the Ukrainian Parliament. Shmyhal stressed that transit could be resumed at the request of the European Commission, if it is not Russian gas. Ukraine had previously stated its unwillingness to extend the contract. Russian President Vladimir Putin had also ruled out extending the transit agreement during a direct line earlier. (Read more>>)
• Kremlin Calls European Gas Shipments ‘Complicated’ After Slovak PM’s Visit to Moscow: The Kremlin called European gas shipments “very complicated” and requiring “increased attention” on Monday, a day after Slovak Prime Minister Robert Fico held a surprise meeting with President Vladimir Putin in Moscow to discuss energy and the war in Ukraine. Fico said his surprise visit to Moscow Sunday was in response to Ukrainian President Volodymyr Zelensky telling EU leaders that Kyiv remains opposed to Russian gas transiting through its territory. Ukraine has said it will not renew its gas transit agreement with Russia when it expires in January 2025. (Read more>>)
• EU to End Visa-free Travel for Georgian Diplomats: In what is being called a "first step," ministers agreed to restrict travel for Georgian government officials. It comes during Kaja Kallas first foreign ministers meeting as policy chief. European Union Foreign Ministers agreed to take moves to end visa-free travel for Georgia's diplomats and government officials following the ruling party's crackdown against pro-EU protesters. “The situation is not going to a positive direction for the Georgian people,” the EU's new foreign policy chief Kaja Kallas said after meeting with the ministers on Monday. (Read more>>)
• The US has Allocated a $20 Billion Loan to Ukraine using Proceeds from frozen Russian Assets: The United States has announced that it will provide Ukraine with a $20 billion loan to be repaid using proceeds from Russia's frozen sovereign assets. US Treasury Secretary Janet Yellen explained that these funds, paid for with profits from frozen Russian assets, will provide Ukraine with “critical support as it defends its country against unjustified aggression.” In October, the G7 countries agreed to provide Ukraine with a $50 billion loan, which is expected to be repaid using interest earned on Russia's frozen assets. Under the agreement, Brussels and Washington intend to allocate $20 billion each, with the remainder to be contributed by the UK, Canada, and Japan. (Read more>>)
• Euroclear Continues Settlements on a Number of Russian Companies' Eurobonds: The Belgian depository Euroclear resumed settlements on ten Eurobonds of Russian companies on December 2. The depository sent the corresponding notice (RBC Investments has a copy) to its clients. The list includes Eurobonds of Rusal, Russian Railways, and EVRAZ. According to experts interviewed by RBC Investments, the fact that operations with Eurobonds have resumed allows investors to transfer securities from the list to Russian depository accounts in Euroclear, and then present these securities to the issuer for replacement. (Read more>>)
• The Supreme Court of Russia will Decide whether it is Possible to Collect a Foreign Bank's Debt from its Russian Subsidiary: The Supreme Court of Russia will consider a complaint against the decision to collect USD 24 million in debt from Citibank and its Russian subsidiary in favour of the Russian claimant. As of February 2022, Citibank owed Sovcombank $24 million. Citibank confirmed the existence of the debt, but refused to repay it, citing the sanctions imposed on Sovcombank. Disagreeing with the decision, Sovcombank filed a claim with the Moscow Arbitration Court to recover the debt from the Russian subsidiary of Citibank. The case has already become a precedent: disputes are multiplying in Russian domestic courts, where plaintiffs are suing Russian companies affiliated with foreign legal entities for their debts. (Read more>>)
• Putin Approves Purchase of Russian Elevator Company from Louis Dreyfus: Russian President Vladimir Putin has issued an order approving the purchase of the Russian Elevator Company from the French grain trader Louis Dreyfus. Louis Dreyfus is one of the world's top ten grain exporters. The company stopped exporting grain from Russia. (Read more>>)

V.  Other Notable Developments

• Switzerland Adopts More EU Sanctions on Russia and Belarus: On December 23, Switzerland adopted the latest EU sanctions package on Russia and Belarus. The move came one week after the European Union targeted Moscow's vessels and Chinese entities found to have traded with the Russian military. In all, the Swiss government listed 54 persons and 30 companies and organizations, freezing their assets as of December 24, 2024 and banned 52 ships from providing services. (Read more>>)