On October 28, 2022, further amendments to the UK's Russia sanctions regime were laid before parliament. The new measures introduced under the Russia (Sanctions) (EU Exit) (Amendment) (No. 15) Regulations 2022 ("Amendment 15") include an expansion of the ban on loan and credit arrangements and the items covered by existing trade restrictions on oil refining, revenue generating, G7 dependency and further goods and technology. Amendment 15 also introduces an import ban on liquefied natural gas ("LNG") and the creation of new trade prohibitions on gold jewellery, certain processed gold and the export of so-called "Russia's vulnerable goods." All of the new measures will enter into force on October 29, 2022, with the exception of the provisions relating to the import of LNG, which will enter into force on January 1, 2023.

Expansion of Loan and Credit Arrangements Prohibition

Amendment 15 amends the categories of loan that are subject to the existing prohibition on directly or indirectly granting, or entering into an arrangement to grant, a relevant loan to include companies outside Russia that are owned by a person connected with Russia.

These "Category 5" loans are loans or credit with a maturity exceeding 30 days first made or granted at any time on or after October 29, 2022, that are not Category 1 – 4 loans, to:

  • an entity that is connected with Russia (e.g., incorporated/constituted under the law of, or domiciled in, Russia) other than an entity incorporated/constituted outside Russia on October 29 or owned by such a person;
  • an entity owned by an entity described in the bullet point above; or
  • an entity owned by a person connected with Russia who is an individual (e.g., a person ordinarily resident, or located, in Russia).

The restrictions on "Category 3" loans that have been in place since March 1, 2022, also will be phased out from October 29.

To coincide with the implementation of the prohibition on granting Category 5 loans, His Majesty's Office of Financial Sanctions Implementation ("OFSI") also has issued two General Licences:

  • General Licence INT/2022/ 2307324, which permits persons subject to UK sanctions jurisdictions a wind-down period until 23:59 on November 5, 2022 during which time Category 5 loans can be granted; and
  • General Licence INT/2022/ 2305324, which permits the granting of Category 5 loans to Gazprom Germania and/or any of its subsidiaries until October 29, 2023.

Expansion of Items Targeted by Existing Trade Prohibitions

Amendment 15 expands the number and range of items covered by existing trade restrictions on: (i) oil refining goods and technology; (ii) revenue generating goods; and (iii) G7 dependency and further goods.

The oil refining goods and technology included within the scope of the restrictions also now extends to:

  • hydrogen recovery and purification equipment falling within commodity codes ex 8419 60 00 and ex 8419 89 98;
  • refinery fuel gas treatment and sulphur recovery equipment falling within commodity codes ex 8419 60 00 and ex 8421 39 85; and
  • cooling towers and similar plant for direct cooling by means of recirculated water, falling within commodity code ex 8419 89 10.

To align with the EU, the revenue generating goods included within the scope of existing trade restrictions also now extend to items falling within commodity codes:

  • 2208 (e.g., undenatured ethyl alcohol of an alcoholic strength by volume of less than 80% volume; spirits, liqueurs and other spirituous beverages); and
  • 2303 (e.g., residues of starch manufacture and similar residues, beet-pulp, bagasse and other waste of sugar manufacture, brewing or distilling dregs and waste, whether or not in the form of pellets).

The G7 dependency and further goods included within the scope of existing trade restrictions have been increased to include items falling within over 45 commodity codes covering a range of products, including various chemicals, colourants, manufacturing products, machinery and vehicles. The measures are intended to increase alignment between comparable UK and EU sanctions measures.

Import Ban on LNG

From January 1, 2023, absent an available exception or licensing ground, persons subject to UK sanctions jurisdiction will be prohibited from:

  • importing in to the UK LNG originating in, or consigned from, Russia;
  • directly or indirectly acquiring LNG that originates, or is located, in Russia, with the intention of the LNG entering the UK; or
  • providing technical assistance, financial services and funds or brokering services in relation to the import or acquisition of LNG covered by the prohibition.

For the purpose of the ban, LNG refers to anything falling within commodity code 2711 11 00.

New Trade Prohibitions

Gold Jewellery and Certain Processed Gold

Absent an available exception or licensing ground, Amendment 15 prohibits persons subject to UK sanctions jurisdiction from:

  • importing into the UK gold jewellery originating in Russia where the jewellery was exported from Russia on or after October 29, 2022;
  • importing into the UK gold processed outside the UK, Isle of Man or Russia that incorporates gold that on or after July 21, 2022 originated in, or was exported from, Russia;
  • directly or indirectly acquiring gold jewellery that originates, or is located, in Russia with the intention of the jewellery entering the UK;
  • directly or indirectly acquiring gold jewellery that originates in Russia, or was exported from Russia on or after October 29, 2022, with the intention of the jewellery entering the UK;
  • directly or indirectly providing technical assistance, financial services and funds or brokering services relating to the import or acquisition of gold jewellery falling within the scope of the prohibition; and
  • directly or indirectly providing technical assistance, financial services and funds or brokering services relating to the import of processed gold falling within the scope of the prohibition.

For the purpose of this prohibition, an item has been processed if it has been altered, transformed in any way, or subjected to any other type of operation or process. Such an item has been exported from Russia when it has completed the applicable export formalities and where the item was transported by:

  • land, it has left Russian territory;
  • sea, the ship on which it was transported has departed a port in Russia for a destination outside Russia; or
  • air, the aircraft on which it was transported has departed an airport in Russia for a destination outside Russia.

Russia's Vulnerable Goods

Amendment 15 also introduces a prohibition, absent an available exception or licensing ground, on the export, making available, supply and delivery of goods that are critical to the functioning of Russia's economy (so-called Russia's vulnerable goods) to, or for use in Russia, or to persons connected with Russia. The new prohibition impacts goods falling within over 700 commodity codes. The prohibition also extends to the provision of technical assistance, financial services and funds or brokering services in relation to these categories of items.

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