UK Weekly Sanctions Update - Week Of March 18, 2024

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In this weekly update, we summarise the most notable updates in the UK sanctions world.
UK International Law
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In this weekly update, we summarise the most notable updates in the UK sanctions world. If you have any questions in respect of any of the developments set out below, please do not hesitate to contact a member of our London Global and Government Trade team listed above.

1. Russia Sanctions

  • UK Court of Appeal dismisses appeal that Oleg Deripaska was in contempt of court in connection with arbitral proceedings: On March 20, 2024, the UK Court of Appeal handed down judgment in a case relating to an arbitral award granted in favour of Vladimir Chernukhin against Oleg Deripaska in July 2017. Mr Deripaska was designated as an SDN in April 2018 before Mr Chernukhin received the arbitral award. Concerned that Mr Deripaska would repatriate his assets to Russian in order to avoid paying the arbitral award, Mr Chernukhin successfully sought a freezing order against Mr Deripaska's assets. Mr Derispaska provided an undertaking to the court that he would not take steps to dispose of or deal with shares held in certain companies he owned or controlled (including EN+). In the present case, Mr Chernukhin argued that, Mr Deripaska was in contempt of court for breaching his undertaking to the court by virtue of changing the domicile of a EN+ from Jersey to Russia. The Court of Appeal dismissed the appeal. (https://www.bailii.org/cgi-bin/format.cgi?doc=/ew/cases/EWCA/Civ/2024/268.html&query=(sanction) )
  • UK parliamentary committees debate the Russia diamond ban, the oil price cap and circumvention: On March 19, 2024, and March 14, 2024, the Lords Grand Committee and the UK Commons Delegated Legislation Committee respectively debated the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2024, which brought into effect a prohibition on Russia diamonds equal to or larger than 1 carat in weight. According to ministers, the Russia diamond ban is expected to impact business worth around £10 million per year. (https://hansard.parliament.uk/Lords/2024-03-19/debates/AE2359FA-BF0F-471C-94E0-0DBAE4C4EC03/Russia(Sanctions)(EUExit)(Amendment)Regulations2024; https://hansard.parliament.uk/Commons/2024-03-14/debates/a09cbfeb-b025-46d8-be46-85c4233a8f32/Russia(Sanctions)(EUExit)(Amendment)Regulations2024)
  • UK court rules against striking out a sanctions defence in ownership dispute: On March 13, 2024, the Insolvency and Companies Court ruled against striking out a claim which sought the transfer of ownership of a share in an English company (which in turn owns a villa in Italy) to Lyubov Kireeva ("the Claimant") and grant declaratory relief as to the ownership of the share. One argument put forward by Alina Zolotova and Basel Properties Limited ("the Defendants") as to why the declaratory relief should be refused was that the Claimant's funder was arguably subject to sanctions, and so declarations or transfers of ownership of the share would breach the sanctions regime. The judge decided that the case did not raise fundamental issues about access to justice given sanctions compliance was being considered in the court's exercise of discretion and it was the funder who was sanctioned, rather than the litigant. (https://southsquare.com/wp-content/uploads/2024/03/Kireeva-v-Zolotova-Approved-Final-Judgment-13-March-2024.pdf)
  • UK Foreign Affairs Committee holds evidence session as part of its inquiry into the situation in Ukraine and the UK's response: On March 12, 2024, the UK Foreign Affairs Committee heard from a minister, officials and academics about the impact and effectiveness of Russia sanctions. Among other things, witnesses commented that "[we] need to put more pressure and more sanctions" in place to affect certain individuals; preventing individuals from travelling to Europe could make a difference; Russia "has a playbook on how to counter some of the financial sanctions and export controls". (committees.parliament.uk/oralevidence/14485/pdf/)
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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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