Russia/Ukraine Sanctions Update - Month of February 2024

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

I. US SANCTIONS

• US Department of the Treasury Sanctions Almost 300 Individuals and Entities: On February 23, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned almost 300 individuals and entities, including targets in Russia’s financial infrastructure and military-industrial base and more than two dozen third-country sanctions evaders in Europe, East Asia, Central Asia, and the Middle East. As part of OFAC’s targeting of Russia’s core financial infrastructure, OFAC’s sanctions included the National Payment Card System Joint Stock Company (NSPK), which is the state-owned operator of Russia’s Mir National Payment System. NSPK is owned by the Central Bank of Russia and plays a key role in facilitating financial transactions both internal to Russia and abroad. Read more >>
  
• US Department of the Treasury Designates Russian State-Owned Sovcomflot, Russia’s Largest Shipping Company: On February 23, the US through OFAC, as part of an international coalition of countries, the Price Cap Coalition; including the G7, the EU, and Australia, that have agreed to prohibit the import of crude oil and petroleum products of Russian Federation origin; designated the Joint Stock Company Sovcomflot (Sovcomflot), Russia’s state-owned shipping company and fleet operator. In addition to designating Sovcomflot, OFAC identified 14 crude oil tankers as property in which Sovcomflot has an interest. Read more >>
• US Department of the Treasury Sanctions Affiliates of Russia-based LockBit Ransomware Group: On February 20, OFAC designated two individuals who are affiliates of the Russia-based ransomware group, LockBit. This action was the first in ongoing US collaborative efforts with the US Department of Justice, Federal Bureau of Investigation, and international partners to target LockBit. Read more >>
• US Department of the Treasury Targets Price Cap Violation Network and Implements G7 Ban on Russian Diamonds: On February 8, OFAC took its second price cap enforcement of 2024 by imposing sanctions on four entities and identifying one vessel as blocked property. OFAC also issued two new determinations that implement G7 commitments to ban the importation of Russian diamonds. Read more >>
• US Department of the Treasury Chairs Roundtable with US Regional Financial Institutions on Countering Russian Sanctions Evasion: On February 27, Acting Assistant Secretary of the Treasury for Terrorist Financing, Anna Morris, chaired a roundtable with US regional financial institutions who may have higher exposure to financing and payments for US exports of sensitive goods. The financial institutions discussed effective methodologies regarding identification of potential Russian evasion and the risks involved in engaging in international business that may be linked to Russia. Read more >>
• US Department of State Imposes Sanctions on more than 250 Entities and Individuals: On February 23, the Department of State imposed more than 250 sanctions on entities and individuals, including those engaged in sanctions evasion and circumvention, and those bolstering Russia’s future energy and metals and mining production. These sanctions also included several individuals for acts supporting Russia’s war, including the unlawful transfer and/or deportation of Ukrainian children. The Department of State also announced that it is taking steps to impose visa restrictions on Russia Federation-installed purported authorities involved in human rights abuses in connection with the transfer, deportation, and confinement of Ukrainian children. Read more >>
• US Department of Commerce Adds 93 Entities in Russia to Its Entity List: On February 23, the Department of Commerce Bureau of Industry and Security (BIS) imposed additional export restrictions on 93 entities in Russia and seven other destinations for a variety of reasons related to their activities in support of Russia’s defense-industrial sector and war effort. More than 50 of the entities added to the list will also receive a “footnote 3” designation as Russian-Belarusian military end users. A footnote 3 designation subjects the entities to some of the most severe restrictions under the Export Administration Regulations (EAR). The entities are added with a license requirement for all items subject to the EAR and a license review policy of denial, apart from food and medicine designated as EAR99, which will be reviewed on a case-by-case basis by BIS. Read more >>
• US Department of the Treasury Issues New Price Cap Analysis: On February 23, the US Department of the Treasury published a new analysis on the impact of the second phase of the price cap on Russian oil. The analysis shows the first phase of the price succeeded in significantly limiting the revenue Russia derived from energy exports to pursue its unprovoked war in Ukraine, with oil tax revenue down 40% during the first nine months of the year. At the same time, Russian energy exports remained stable, avoiding the potential spike of global oil prices to as much as $150 per barrel that market analysts predicted. Read more >>
• US Department of State Releases Risk Advisory for Doing Business in the Russian Federation and Russia-Occupied Territories of Ukraine: On February 23, the Department of State released a risk advisory for businesses and individuals remaining directly or indirectly in the Russian market to understand the sanctions risks of their activities and any applicable exemptions or authorizations. Read more >>
• US Department of State Announces Reward Offer for Information Leading to the Arrest and/or Conviction of a Russian Sanctions Evader: On February 22, the Department of State announced a reward offer under the Transnational Organized Crime Rewards Program of up to $1 million for dual Russian-Swiss national, Vladislav Osipov, for information leading to his arrest and/or conviction for participating in, conspiring to participate in, or attempting to participate in transnational organized crime. Read more >>
• Russian-Canadian National Pleads Guilty to Conspiracy to Launder Money from Scheme to Send UAV and Missile Components to Russia: On February 12, the Department of Justice released that Kristina Puzyreva, a Russia-Canadian National, pleaded guilty to money laundering conspiracy for her role in a multimillion-dollar scheme to send components used in unnamed aerial vehicles (UAVs) and guided missile systems and other weapons to sanctioned entities in Russia. Read more >>

II. EU SANCTIONS

• EU Adopted 13^th Sanctions Package against Russia: On February 23, the EU adopted its 13^th sanctions package against Russia. The new package introduces additional asset freeze measures. It also amends sectoral sanctions targeting Russia by extending the list of entities subject to enhanced export control restrictions on dual-use and advanced technology items, further limiting Russia's access to electronic components and facilitating trade in iron and steel products between the EU and the UK.Read more >>, Read more >> andRead more >>
• EU Agrees First Sanctions on Chinese and Indian Companies for Russia War Links: The EU's 13^th sanctions package against Russia targets for the first time Chinese and Indian companies accused of supporting Russia's war effort. The measures target close to 200 individuals and entities but stop short of any sweeping economic action targeting crucial industrial sectors. The targeted businesses will be hit by trade restrictions after being identified as helping to supply equipment, particularly electronics and microchips, used by Russia to manufacture weapons or other equipment used in its war against Ukraine. The inclusion of Chinese and Indian companies comes as the EU and its G7 partners attempt to crack down on Russia’s use of third countries and transit routes to evade existing curbs designed to hamper its war economy. Read more >>
• EU Sanctions Indian Tech Microelectronics Maker That Has Partnered with India's IT Ministry: Within the EU's 13^th sanctions package, the EU sanctioned Indian microelectronics maker Si2 Microsystems for allegedly providing Russia with goods and technology that support the country's illegal invasion of Ukraine. Si2 Microsystems describes itself as a system-in-package and microsystems solutions provider. It designs and assembles integrated circuits for commercial, military and space industries. In the past it has counted India’s Space Research Organisation, GE and IBM as customers. The Bangalore-based outfit is also a partner of India's Ministry of Electronics and Information Technology and the Indian Institute of Technology Madras, as part of an effort to research fabrication of chips with silicon photonic processor cores. Read more >> 
• EU Countries Float New Russia Sanctions Tool after Navalny’s Death: Czech Republic, Estonia, Finland, Latvia, Lithuania, Poland, Romania and Sweden are pushing the EU institutions to come up with a new sanctions instrument targeting Russia after the death of anti-corruption activist Alexei Navalny. At least four other countries are understood to support the idea but did not sign the letter. The EU Member States hope to establish a mechanism that specifically targets those involved in domestic repression in Russia. A second idea the eight Member States put forward is “new listings of individuals and entities” involved in Russian repression under the EU’s relatively new Global Human Rights Sanctions regime. This would presumably work a lot faster than any “Navalny Act” since the latter would require a proposal and a procedure with a European Parliament. Read more >>
• EU Extends Sanctions in Response to the Illegal Recognition, Occupation or Annexation by Russia of Certain Areas of Ukraine for a Year: On February 19, the EU renewed sanctions imposed in response to the illegal annexation of Ukraine’s Donetsk, Kherson, Luhansk and Zaporizhzhia regions by Russia for a further 12 months, until 24 February 2025. Read more >>
• Council Decides to Set Aside Extraordinary Revenues from Russian Assets: The Council of the EU adopted a decision and a regulation clarifying the obligations of Central Securities Depositories (CSD) holding assets and reserves of the Central Bank of Russia (CBR) that are immobilized as consequence of EU’s sanction measures. This decision, in line with G7 position, clarifies the prohibition of transactions related to the management of reserves as well as of assets of the CBR. It also clarifies the legal status of the revenues generated by the CSDs in connection with holding of Russian immobilized assets and sets clear rules for the entities holding them. The Council decided in particular that CSDs holding more than €1 million of CBR’s assets must account extraordinary cash balances accumulating due to EU restrictive measures separately and must also keep corresponding revenues separate. In addition, CSDs shall be prohibited from disposing of the ensuing net profits. Read more >> and Read more >>
• The EU and Price Cap Coalition Members Issue a Compliance and Enforcement Alert: On February 1, the EU, together with the other G7+ Price Cap Coalition members issued a compliance and enforcement alert to further enhance the collective action taken to tackle the oil price cap (OPC) evasion attempts. The alert includes (i) an overview of key OPC evasion methods and recommendations for identifying such methods; (ii) mitigating their risks and negative impacts and information on how to report OPC suspected breaches across the Price Cap Coalition. Read more >> 
• European Commission Updated Its Russia Sanctions FAQs on Software: On February 6, the European Commission updated its FAQ regarding restrictions on software. Read more >> 
• European Commission Updated Its Russia Sanctions FAQs on Tanker Sales: On February 19, the European Commission updated its FAQ regarding notification and authorization of tanker sales to third countries. Read more >>
• European Commission Updated Its Russia Sanctions FAQs on "No Re-Export to Russia" Clause: On February 22, the European Commission updated its FAQ regarding the “no re-export to Russia” clause. Read more >>
• EU's General Court Dismissed Several Actions against EU Sanctions: On February 7, the General Court dismissed several actions, including those brought by Igor Shuvalov and Alisher Usmanov. Read more >> and Read more >>
• European Commission Comments on Allegations Concerning Sanctions Evasion through Third Countries: The Finnish manufacturer and supplier of air traffic control equipment, NRPL Aero, has disclosed that Finland sold 2.5 tons of radar equipment valued at EUR 1.3 million to the Kazakh supplier of software and hardware for radio navigation equipment, AG TECH LLP, on behalf of the Kazakh air navigation services provider, Kazaeronavigatsia. The equipment was delivered to Shymkent International Airport, but allegedly there is reason to believe that this radar equipment might be delivered to Russia rather than Shymkent. In reaction to these allegations, the European Commission reaffirmed that it engages in a regular dialogue with third country authorities, including Kazakhstan, where a risk of circumvention has been identified, with particular attention to critical items for Russia’s military, industrial and economic development. Regarding the allegation of the loophole of derogations, the Commission explained that it is for the national competent authorities to assess applications for derogations from the sanctions in force, within the framework set by European and national law. Read more >> and Read more >>
• European Commission Comments on Sanctions on Russian LNG and Natural Gas Imports: Fluxys, the Belgium-based natural gas transmission operator, owning a gas terminal in Zeebrugge, which is one of the major transit hubs for Russian liquefied natural gas (LNG) claims that it cannot unilaterally stop imports from Russia, owing to breach of contract, juridical consequences and fines. It thus asked the European Commission whether it plans to propose sanctions to the Council on Russian LNG/gas imports or envisages alternative measures to sanctions packages that can enable Fluxys to end its contract with Yamal, while avoiding lawsuits and fines. In its response, the European Commission explained that although some Member States have already voluntarily stopped importing LNG of Russian origin, there are no EU restrictions on the import of natural gas from Russia either via pipeline or as LNG. However, the Commission has repeatedly urged Member States to reflect on the appropriateness of imports of LNG from Russia. The European Commission further emphasized that the politically agreed Hydrogen and Decarbonized Gas Market Package will also allow Member States to adopt restrictions to the supply of natural gas, including LNG, from Russia or Belarus, with the aim of protecting the essential security interests of the Member states or of the EU. Read more >> and Read more >>
• European Commission Comments on Allegations against PwC and Others: On February 14, the European Commission explained in light of the allegations against PwC and others, the Commission contacted the authorities in Cyprus and welcomed the public comments by President of Cyprus, N. Christodoulides on the invitation extended to financial crime experts to help Cyprus with its ongoing investigations. The Commission continues to stand ready to support Cyprus in this important work. Read more >> and Read more >>
• Third Sanctions Coordinators Forum: On February 13, EU Sanctions Envoy David O’Sullivan convened the third Sanctions Coordinators Forum gathering high-level representatives from all EU Member States and a broad coalition of international partners from 11 countries. The aim of the Forum was twofold. First, to identify ways of further disrupting Russia’s access to sensitive technology with a potential military application, notably by tackling different circumvention practices and emerging trends. Second, to focus efforts on reducing Russia’s revenue, in particular by reinforcing implementation of the oil price cap. Domestic implementation and enforcement as well as engagement with third countries outside of the sanctioning coalition were overarching themes. Read more >>
• Outcomes of the Fourth Meeting of the High-Level Meeting on Sanctions Implementation: On February 13, Commissioner Mairead McGuinness, responsible for sanctions implementation in the EU, chaired the fourth meeting of the High-Level Expert Group on Union Restrictive Measures. The Commissioner (i) highlighted overall determination to stop Russia from acquiring Western sensitive technology for its military; (ii) defined tackling possible circumvention attempts, including via countries outside the EU as a key priority; (iii) explained that the Commission dedicates significant efforts to close loopholes – from legislative changes targeting those who facilitate circumvention, through criminalizing the violation and circumvention of sanctions, to closely monitoring suspicious trade flows, and organizing dedicated outreach. Read more >> 
• EU Slams Governments for Banned Goods Reaching Russia: In a letter sent to EU Member States beginning of February 2024, the EU has demanded governments to urgently crack down on the illegal flow of goods to Russia, amid a push for Brussels to take control of closing sanctions loopholes. EU finance chief Mairead McGuinness and trade chief Valdis Dombrovskis, who co-signed the letter, said they would soon share “detailed information” on where companies are evading sanctions. They said they would follow up with EU Member States by mid-April to assess action taken. Read more >> 
• The Baltic Border Loophole in EU's Russia Sanctions: Estonia, Latvia and Lithuania, considered as the most hawkish EU countries on sanctions over the war in Ukraine, have struggled to manage the 1,600-kilometer border they share with Russia and Belarus. As a result, the Baltic border crossings have become a prime destination for those seeking to evade sanctions on goods that could have both civilian and military uses, as well as luxury items like cars, according to government officials, customs officers and experts. Goods arriving at the Baltic borders come from across Europe; only 6 percent of what crosses into Belarus or Russia from Lithuania originates from within the country, according to Lithuania’s foreign ministry. Read more >>
• EU Faces Pressure to Sanction Russian Aluminum: European aluminum producers - supported by Lithuania, Estonia, Latvia and Poland – have been reportedly pressing the bloc to impose an embargo on imports of the metal from Russia. Struggling with high energy costs and cheap foreign competition, European producers of aluminum expect potential sanctions against Russia, which remains the world’s third largest producer, can bring some relief. Since the fall, the EU's association of aluminum producers has argued that Brussels should cut off Russian imports completely, saying the producers have already "accelerated their decoupling." Read more >>
• Moldova Vows to 'Accelerate' Efforts to Comply with EU's Russia Sanctions: Moldova is "accelerating work" to comply with EU sanctions against Russia over its full-scale invasion of Ukraine, a government spokesman said on February 2, 2024, a day after an investigation showed Moldovan firms have continued to supply airplane parts to Russian airlines and companies. An investigation found that three Moldovan-based companies had brokered airplane-parts sales worth more than $15 million to Russian firms in 2022-23. The sales did not violate Moldovan law but were made after Brussels adopted sanctions against Russia over its invasion of Ukraine in February 2022. In June 2022, Moldova was granted official candidate status for EU membership. Read more >>
• Austria’s Dependence on Russian Gas Rises to 98%, Two Years after Ukraine War: Austria’s dependence on Russian gas has increased from 80% to 98% in two years, prompting the country’s energy minister to ring the alarm bell ahead of a national election. The high share of Russian gas is partly caused by rapidly falling gas consumption in Austria – from 100 TWh down to 75 TWh in 2023, according to figures from the energy ministry. Another reason is the contractual ties. Austrian utility OMV committed to a “take-or-pay” arrangement with Gazprom for up to 60 TWh a year, nearly enough to meet the country’s entire gas demand. These supplies, contracted in 2018 until 2040, come at a likely cheaper price than neighboring Germany, which must rely on global markets to secure liquefied natural gas shipments. Read more >>
• Austria, Czech Republic, Hungary and Slovakia Warn German Gas Transit Costs Will Fuel Need for Russian Imports: Austria, the Czech Republic, Hungary and Slovakia have warned they could be forced to increase Russian gas imports because of a German levy on supplies piped across its borders, highlighting strains in the EU’s bid to diversify sources of energy. The four EU countries still receive significant volumes of piped gas from Russia despite Europe attempt to wean itself off its dependence on energy from its eastern neighbor. As Russia slashed pipeline supplies to Europe in retaliation for EU sanctions, European gas prices soared to record levels of more than €300 per megawatt hour in August 2022. Germany imposed the transit tariff in 2022 to cover the cost of refilling its gas storage tanks to hit European Commission targets intended to avoid winter shortages for businesses and consumers. But Austria, the Czech Republic, Hungary and Slovakia argue the additional costs have damaged their efforts to buy gas from western neighbors. Read more >>
• EU Member States Fear Russian Retaliation and Cyberattacks after Asset Freezes: There are mounting concerns about Russia's retaliation, including potential cyberattacks targeting Western countries, against a full-scale confiscation of its frozen assets. Several European officials involved in the discussions warned that it could trigger a backlash against European assets in Russia. This comes on top of warnings that it could tarnish the reputation of the eurozone, making it less attractive to investors. Read more >>
• Danone Plans to Sell Russian Operations to Chechnya-linked Businessman: Danone is planning to sell its Russian business the rebranded Life & Nutrition to a member of its Kremlin-installed management linked to the nephew of Chechen strongman Ramzan Kadyrov, seven months after Vladimir Putin ordered the seizure of the French company’s local operations. Read more >>
• The West Has Not Gone Far Enough in Sanctioning Russia: Anders Fogh Rasmussen, a former Nato secretary-general, shared its opinion that western countries should tighten enforcement of existing sanctions to stop western components reaching Russia’s military industrial complex, step up sanctions against heavy industry, which has been co-opted to support the war effort. Last, they should use frozen Russian assets to fund Ukraine’s victory and recovery. Read more >>

III. UK SANCTIONS

• UK Government Amends One Entry on the UK Sanctions List under the Russia Regime: On February 28, the UK Government made one administrative amendment to the entry for Ilya Borisovich Brodskiy under the Russia sanctions regime. This individual remains subject to an asset freeze, travel ban, trust services sanctions, and transport sanctions.Read more >>
• UK Court of Appeal Rejects Appeals on De-listing Challenges: On February 27, the UK Court of Appeal rejected appeals against the judgments in Dalston Projects Ltd and Eugene Shvidler v. FCDO ([2024] EWCA Civ 172). This was the first Court of Appeal judgment to consider the proper approach to sanctions challenges in the UK, in particular on the grounds of proportionality. The Court upheld the rejection of Eugene Shvidler’s challenge to his sanctions designation and the challenge by Sergei Naumenko and Dalston Projects Ltd to the detention of superyacht Phi under the UK’s Russia sanctions regulations. Read more >>
• UK Government Amends General Licence for Russian Iron and Steel Imports: On February 26, the UK Government amended the General Trade Licence for sanctioned iron and steel to permit the import of Russian iron and steel products manufactured or produced before 23 June 2023 (this date was previously 21 April 2023). Read more >>
• OFSI Amends General Licence for Payments by Designated Persons to Companies House: On February 23, OFSI amended General Licence INT/2023/3626884 to permit the payment of inter alia fees owed by or due from a designated person to Companies House for the administrative restoration of an entity previously incorporated in the UK which was struck off and dissolved by the Registrar of Companies at Companies House Administrative Restoration Fees. Read more >>
• UK Government Amends One Entry on the UK Sanctions List under the Russia Regime: On February 23, the UK Government amended the entry for Ilya Borisovich Brodskiy under the Russia sanctions regime. This individual remains subject to an asset freeze and trust services sanctions, and is not subject to transport sanctions. Read more >>
• UK Government Adds More Than 50 Entries to the UK Sanctions List under the Russia and Belarus Regimes: On February 22, the UK Government designated more than 50 individuals and businesses in connection with Russia’s invasion of Ukraine. These sanctions target key sources of Russian revenue such as metals, diamonds, and energy trade, as well as parties that Russia with munitions. The new targets include munitions manufacturers, electronics companies, diamond and oil traders, and oil and gas companies (such as Arctic LNG 2, one if its directors and six directors of PJSC Novatek, majority owner of Arctic LNG 2). Read more >>, Read more >> and Read more >>
• UK Government Expands Common High Priority Items list: On February 22, the UK Government, in collaboration with its international partners, expanded the Common High Priority List, a list that includes Western items critical to Russian weapons systems and its military development. In particular, the list was expanded to include 5 new codes related to Computer Numerical Control (CNC) machines which are crucial to the manufacture and maintenance of vital military equipment. Read more >>
• UK Government Adds Six Entries to the Sanctions List under the Human Rights Regime: On February 21, the UK Government designated six individuals under the Global Human Rights Sanctions Regulations 2020. These individuals are reportedly in charge of the Artic penal colony where Russian opposition figure Alexie Navalny died on February 16, 2024, after years of mistreatment by the Russian authorities. Those designated are (i) Aleksandr Vladimirovich Golyakov; (ii) Vadim Konstantinovich Kalinin; (iii) Sergey Nikolaevich Korzhov; (iv) Aleksandr Valerievich Obraztov; (v) Vladimir Ivanovich Pilipchik; and (vi) Vasiliy Alexandrovich Vydrin, all of whom are now subject to an asset freeze and travel ban. Read more >> andRead more >>
• OFSI Updates Guidance on Reporting Requirements under the Russia Regime: On February 20, the UK Government updated its Russia guidance to add FAQ 56, which relates to reporting obligations under Regulation 70A(5). Regulation 70A(5) requires a designated person to report changes in their financial circumstances to OFSI as soon as practicable. The FAQ provides that a designated person must report to OFSI (a) when the value of their funds or economic resources, when taken together, has changed by an amount exceeding £10,000 compared with the previous report filed with OFSI, or (b) if there has been a change to the nature or location of funds or economic resources where those funds or economic resources exceed £10,000 in value. Read more >>
• OFSI Updates Oil Price Cap Guidance: On February 16, OFSI published updated guidance for the Maritime Services Ban and Oil Price Cap, to provide additional clarity and detail on the following:
  • Attestations: The changes to the attestation model announced on 20 December 2023 will come into effect on 19 February 2024. The updated model requires 1) attestation forms to be provided on a per-voyage basis, and 2) itemised ancillary costs to be recorded by Tier 1 entities and provided to Tier 2 and Tier 3A contractual counterparties upon request. The tier system has been amended and Tier 3 has been split into Tier 3A and Tier 3B.
  • Attestation and cost information deadlines: The deadline for providing additional attestations or itemised ancillary costs has been reduced from 30 days to 28 days.
  • Ceasing doing business: The requirement to cease doing business with actors who refuse or fail to provide information has been clarified as being contract-specific and only applying to policies relating to the seaborne transportation of Russian oil and oil products. Read more >>
• OFSI Issues New Oil Price Cap General Licence: On February 16, OFSI issued General Licence – Oil Price Cap INT/2024/4423849 to replace General Licence INT/2022/2469656 with effect from February 19, 2024. The General Licence permits activity that would otherwise breach the Maritime Services Ban including, inter alia: 
  • The supply or delivery of Russian oil by ship from a place in Russia to a third country or from one third country to another, provided that the unit price of the Russian oil concerned is at or below the Price Cap.
  • A service provider may provide relevant services to any person provided that the unit price of the Russian oil being supplied or delivered by ship from a place in Russia to a third country or from one third country to another third country, is at or below the Price Cap. Read more >> andRead more >>
• UK Government Amends One Entry on the Sanctions List under the Russia Regime: On February 12, the UK Government made one variation to the entry for Vladimir Olegovich Potanin under the Russia sanctions regime. This individual remains subject to an asset freeze, travel ban, transport sanctions, prohibition of technical assistance related to aircraft and trust services sanctions. Read more >>
• OFSI Publishes New Blog on Reporting Requirements under the Russia Regime: On February 12, the UK Government published a blog in respect of new reporting requirements for designated persons under the Russia regime. Two new reporting measures came into force in December 2023, through the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2023. These measures have been introduced to strengthen transparency of frozen assets in the UK and to assist HM Treasury in monitoring compliance with, and detecting evasion of, financial sanctions. The blog post states that (i) “relevant firms” are now required to inform OFSI of any funds or economic resources they hold for the Central Bank of Russia, Russian Ministry of Finance, or Russian National Wealth Fund and (ii) persons designated under the Russia regime are required to proactively provide details of their UK assets to OFSI (or their worldwide assets if they are UK persons). Read more >>
• OFSI Amends General Licence Relating to Oil Price Cap: On February 9, OFSI added an expiration date of 18 February 2024 to General Licence INT/2022/2469656. This General Licence authorises certain activities relating to the maritime transportation of certain oil and oil products to and between third countries as well as related financial and brokering services subject to certain conditions.
  
• OFSI Amends General Licence for Payments to UK Insurance Companies: On February 6, OFSI amended General licence – INT/2022/2009156, which allows UK designated persons (DPs) and persons acting on their behalf to make certain payments to UK insurers, subject to certain conditions. UK insurers are also authorised to receive such payments and to make return payments or refunds in specified circumstances. Read more >>
• UK Government Amends One Entry on the Sanctions List under the Russia Regime: On February 6, the UK Government made a variation to the entry for Oleg Alexandrovich Mashtalyar under the Russia sanctions regime. This individual remains subject to an asset freeze, trust services sanctions, and travel ban. Read more >>
• UK Prosecutors Charge Former Russian Mayor with Sanctions Circumvention: On February 6, Dmitry Ovsyannikov, a UK sanctions target and former mayor of Sevastopol, was arrested by the National Crime Agency and charged on suspicion of sanctions circumvention. Mr Ovsyannikov is the first person to be charged in the UK for breaching Russia sanctions and will appear before Southwark Crown Court on 20 February 2024. Read more >>
• UK Court of Appeal Grants Anti-Suit Injunction Preventing Russian Proceedings in Sanctions Case: On February 2, the Court of Appeal allowed an appeal by UniCredit and granted an anti-suit injunction against proceedings brought by RusChemAlliance LLC (RCA) in Russia against UniCredit. The underlying dispute relates to non-payment by UniCredit under bonds issued to RCA on account of EU sanctions against Russia. The Court held that it had jurisdiction and granted a final anti-suit injunction finding that RCA was in breach of its agreement that such disputes should be decided by ICC arbitration in Paris. Read more >>
• UK Government Issues Enforcement Alert on the Russian Oil Price Cap: On February 1, the UK Government, in a coordinated effort with G7+ nations, issued an enforcement alert to support governments and industry strengthen Russian Oil Price Cap (OPC) compliance, and crack down on evasion. The alert covers, inter alia, an overview of key OPC evasion methods, recommendations for identifying evasion methods and mitigating their risks and negative impacts, and information on how to report suspected OPC breaches. Read more >>
• UK Government Amends One Entry on the UK Sanctions List under the Russia Regime: On January 31, the UK Government made a variation to the entry for Vladimir Aleksandrovich Dmitriev under the Russia sanctions regime. This individual remains subject to an asset freeze, travel ban, and trust services sanctions, and is now subject to transport sanctions. Read more >>
• UK House of Lords European Affairs Committee Publishes Russia-Ukraine Report: On January 31, the UK House of Lords European Affairs Committee published a report titled “The Ukraine Effect: The impact of Russia’s invasion of Ukraine on the UK–EU relationship”. The report builds on the committee’s recommendations on UK-EU foreign and security policy cooperation made in its April 2023 report “The future UK-EU relationship” and focuses on (i) cooperation on sanctions; (ii) the UK-EU defence relationship; (iii) reconstruction of Ukraine; and (iv) the long-term implications for the UK-EU foreign and security relationship. Read more >>
• UK Updates Russia Sanctions Guidance to Include Reference to Licencing Grounds for Scheduled 3DA Revenue Generating Goods: On January 30, the UK Government updated its Russia sanctions guidance to include licensing grounds relating to Schedule 3DA revenue generating goods, outlining when a licence may be granted for the provision of technical assistance, brokering services, financial services, or funds relating to goods falling under Schedule 3DA. Read more >>
• UK Court Rules that Disclosure of Documents to 3^rd party Does Not Breach Sanctions: On January 29, Butcher J in the High Court, in Aercap Ireland Limited v. AIG and others, held that the disclosure of reinsurance documents from the reinsurance broker (a 3^rd party in the litigation relating to aircraft and engines) did not amount to the provision of financial services, brokering services or insurance/reinsurance services with the relevant regulations and, accordingly, was not prohibited under UK sanctions. Read more >>

IV. RUSSIA/UKRAINE SANCTIONS

• Ukraine Launched the State Register of Sanctions: The register contains up-to-date information about sanctioned legal entities and individuals and provides information on sanctions in multiple jurisdictions, including the EU, the US and the UK. The register is accessible at https://drs.nsdc.gov.ua/.Read more >>
• Ukraine Launches a Database of Foreign Equipment Used by Russia for the Production of Weapons: According to the Agency, more than 270 units of various foreign equipment have already been published in the new database. The base contains detailed information about brands of foreign equipment that still enter the Russian Federation, models of individual machines, Russian manufacturers of weapons and their components that use foreign equipment, their lethal products, suppliers and importers. Read more >>
• Ukraine Plans to Sell Confiscated Russian Assets: On 10 February 2024 the Cabinet of Ministers of Ukraine approved the procedure for selling confiscated Russian assets and using the proceeds of such sale. According to the Prime Minister of Ukraine, the state has frozen and confiscated hundreds of facilities that belonged to the Russian government or Russian oligarchs in Ukraine, which are now idle. Sales auctions will be held by the State Property Agency and will be based on the principle of small privatization. Read more >>
• The Russian Foreign Ministry Warned of Retaliatory Measures in Case of Confiscation of Assets by Kyiv: Russia will take countermeasures if Ukraine confiscates its assets, stated Deputy Head of the Russian Foreign Ministry Mikhail Galuzin. Commenting on the decision of the Ukrainian Parliament and the Ukrainian Ministry of Justice to confiscate two An-148 aircraft, the diplomat said that any attempts to alienate Russian property in “unfriendly” countries are illegitimate. Read more >>
• Russia Creates a Mechanism for Carrying Out Corporate Transactions Previously Banned by Russian Law: The Legal Commission on Foreign Investments will prepare motivated recommendations for the President of Russia on the advisability or inexpediency of carrying out corporate transactions with Russian companies owned by foreign investors from “unfriendly” states, that are otherwise prohibited by Russian law. The relevant changes were introduced by the Decree No. 143 dated 26 February 2024. The new rules provide that the Commission will assess whether to allow transactions that are otherwise prohibited but can be approved by a special decision of the President. Read more >>
• Russian Expobank Buys 100% Share of the Russian Subsidiary of HSBC: The relevant transaction was approved by the Decree of the President of the Russian Federation dated 19 February 2024 No. 53-rp. Reportedly, the relevant transaction was agreed still in 2022 shortly before the ban on the sale of subsidiaries of foreign banks. The British HSBC, against the background of the introduction of Western sanctions against Russia in 2022, began to curtail relations with Russian credit institutions and also stopped accepting new clients. Read more >>
• Russia Takes Control Over the Russian Plant of Gildemeister Beteiligungen GmbH: The Russian Government took control over Ulianovsk Machine Building Plant which belongs to the German manufacturer Gildemeister Beteiligungen GmbH. The Russian Agency for Management of the State Property has been designated as the agency in charge of the plant. The relevant decision was approved by the Order of the President of Russia dated 19 February 2024 No. 133. Earlier in 2023 the Russian Government already took control over the Russian subsidiaries of certain Western corporations, including Uniper, Fortum, Danone and Carlsberd. Read more >>
• The Russian Parliament Considers a Bill on Reciprocity in International Trade: The new bill suggests to amend the Law on Fundamentals of State Management of International Commerce by introducing the principle of reciprocity. The principle allows for reciprocal limitation of the rights of foreign actors involved in international trade in response to restrictions introduces against Russia. Read more >>
• The European Union Will Lift Sanctions against the Founder of Yandex Volozh: The EU will lift sanctions against the founder of Yandex Volozh. Volozh is one of three individuals who will be removed from the list after March 15, when the sanctions regime is extended. Volozh came under European sanctions on June 3, 2022. In August 2023, Volozh criticized the military operation in Ukraine. Reportedly, shortly after this statement, Volozh’s lawyers asked the EU to lift sanctions against him. Read more >>
• Ukraine Refused to Exclude Raiffeisen Bank from the List of “War Sponsors”: The Austrian banking group was included in the Ukrainian list in the spring of 2023 for continuing to operate in Russia. According to Ukrainian Anticorruption Agency, in the appeal, the Ukrainian authorities asked what Raiffeisen did to stop working in Russia. The bank could not give a timeline for its exit from Russia but indicated that giving preference loans to Russian military staff (which is among the reasons of inclusion into the list) was mandatory in Russia. Read more >>

V. OTHER NOTABLE DEVELOPMENTS

• New Zealand Sanctions Those Involved in Russia Sanctions Evasion Procurement Networks: On February 29, New Zealand sanctioned an additional 61 Russian individuals and entities, including those involved in sanctions evasion procurement networks. These designations include entities procuring technology for Russia’s defence industry and senior leaders of certain Russian banks. Those involved in the procurement of weapons from North Korea have also been sanctioned. Read more >>
• Australia Imposes Further Targeted Financial Sanctions on Two-year Anniversary of Russia’s Invasion of Ukraine: On February 24, Australia imposed further targeted financial sanctions and travel bans on 55 persons, and targeted financial sanctions on 37 entities. The new sanctions target those involved in Russia's deportation of Ukrainian children from regions under temporary Russian control and targets in Russia's defence, energy, media, and minerals sectors, as well as targets involved in Russia's procurement networks in Belarus, Iran, and North Korea.Read more >>
• Canada Imposes Additional Sanctions against Russia: On February 21, Canada imposed sanctions on 10 individuals, including Putin's aide and other senior officials of private and state-owned companies, who represent nodes of direct and indirect support of Russia's full-scale invasion of Ukraine through finance, logistics and sanctions evasion. Canada also imposed sanctions on 153 entities, most of which are part of the Russian military-industrial complex, and who provide goods and services such as components for Kalibr missiles and drones, insurance and retail services to Russian soldiers and to the Russian Ministry of Defence. They also include entities providing oil transportation and logistics services to the Russian government. Read more >>