In A Parallel Rollout, The US, EU, And UK Sanction Major Russian Financial Institutions And Russian Sovereign Debt And Take Additional Measures - Export Controls & Trade & Investment Sanctions

In close coordination, the US, EU, and UK continue to announce new sanctions targeting Russian interests in response to President Putin's actions in Ukraine.

Our prior client alerts, available here and here, detailed the US and UK governments' "first tranche" of sanctions, consisting of sanctions on major Russian financial institutions and individuals and entities with close ties to President Putin, as well as restrictions on dealing in Russian sovereign debt. The EU also announced its own package of sanctions. This alert provides a high-level comparison of the sanctions measures taken by the US, EU and UK.

Latest Developments

The US has issued a significant package of sanctions over the past week: the designation of a number of Russian banks, expanded prohibitions on dealing in Russian sovereign debt, including on the secondary market, prohibitions on certain transactions related to new debt and equity of specified Russian entities, prohibitions on US financial institutions from opening or maintaining any correspondent or payable-through accounts for or on behalf of Sberbank, and the designation of a number of individuals and entities with close ties to President Putin, as well as the designation of President Putin himself and other senior Russian officials. The US also announced sanctions that broadly prohibit US persons from transacting with Russia's Central Bank, National Wealth Fund, and Ministry of Finance. The US also announced that it has reached agreement with the UK and EU to disconnect sanctioned Russian banks from Swift, with further details to be announced.

In addition, the US announced export control regulations that impose new licensing requirements on certain specified "dual-use" items, including certain telecommunications and other high tech goods, software, and technology.

The UK has taken a range of restrictive measures, including, financial sanctions, export controls and further designations of individuals. On 1 March 2022, the UK brought into force legislation which:

prevents dealing with transferable securities and money market instruments issued on or after 1 March 2022 by the Government of Russia, a UK subsidiary of certain Russian banks or a "person connected with Russia" as defined in the Regulations..
prohibits financial institutions in the UK from establishing or continuing a correspondent banking relationship or from processing sterling payments to, from or via i) a designated person or ii) a credit or financial institution owned or controlled by them. This matches the prohibition in the US.
expands the trade restrictions applicable to Russia, to include a range of further products and technology including certain electronics, computers and computer processing equipment, telecommunications, information security, sensors and lasers, navigation and avionics, marine, diesel engines and certain other categories of goods, technology, software and related services.

The UK has pledged, alongside the US and the EU, to remove Russian banks from Swift, which would severely cut off Russia's access to the global financial system.

Furthermore, the UK has announced that, before the Easter recess of parliament on 31 March 2022, it will bring forward legislation that was intended for the Economic Crime Bill to strengthen unexplained wealth orders to take action against "kleptocrats" laundering funds in the UK.

The UK stated that it will impose further sanctions against Belarus for its role in the conflict.

On 28 February 2022, the EU imposed further restrictive measures on Russia prohibiting Russian air carriers and any Russian-registered aircraft, and any non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by, any Russian natural or legal person, entity or body from landing in or taking off from the territory of or flying over the airspace of, member states of the EU.

The EU has also suspended the application of some provisions of the Agreement between the European Community and the Russian Federation on the facilitation of the issuance of visas to the citizens of the European Union and the Russian Federation.

On 25 February 2022, the EU imposed further restrictions on exports of dual-use goods and technology, as well as restrictions on exports of certain goods and technology which might contribute to Russia's technological enhancement of its defence and security sector.

The EU has also increased the scope of its existing financial restrictions, including:

cutting Russian access to the most important capital markets;
prohibiting the listing and provision of services in relation to shares of Russian state-owned entities on EU trading venues; and
introducing new measures which significantly limit the flow of money from Russia to the EU, by prohibiting the acceptance of deposits exceeding certain values from Russian nationals or residents, the holding of accounts of Russian clients by the EU Central Securities Depositories, as well as the selling of euro-denominated securities to Russian clients.

The EU has also agreed to disconnect Russian banks from Swift.

The EU has also stated that it is looking at imposing further sanctions against Belarus which it states has "aided and supported Russian actions."

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