Sanctions against Russia - what to expect?

February 18, 2022 Sanctions

There is at present intense speculation what counter measures in terms of sanctions that the US, EU and UK will implement against Russia in response to its threat against and potential invasion of Ukraine. There are several possible explanations for why information of the counter measures have not been made public. The silence could be deliberate because uncertainty makes the sanction threat more powerful. The silence could also be due to that the decision makers are not in agreement – within the EU it would seem that at least the sanctioning of the Nord Stream 2 pipeline and Russian gas is a contentious issue.

The disunity is apparent in the US where the senators reportedly have failed to reach agreement on a bipartisan sanctions package. As a result, republican senators have introduced their own bill, the Never Yielding Europe’s Territory Act (The Act). It is not clear whether The Act materially differs from the sanction package that the democrats try to compile, or if the initiative is a product of the US political game. Be that as it may, The Act may serve as a pointer of what sanctions to expect from the US.

The Act, if made into law, will impose numerous sanctions against “Foreign persons”, which are defined as an individual or entity that is not a “United States person”. US sanctions against foreign persons are of particular interest for non-US companies. Under the Act, the following foreign persons are subject to sanctions:

  • Any entity established for or responsible for the planning, construction, or operation of the Nord Stream 2 pipeline or a successor entity, including Nord Stream 2 AG; and any corporate officer of an entity
  • Any entity engaged in activities to destabilize Ukraine
  • Any entity determined to be a financial institution owned or operated by the Government of the Russian Federation; or that are owned or controlled by, or are successors to, a financial institution described in the Act
  • Any foreign financial institution that, on or after the date that is 30 days after sanctions are imposed, knowingly engages in a significant financial transaction with any financial institution subject to sanctions imposed under the Act. Notably, pursuant to the Act, the following Russian financial institutions will be subject to sanctions:

    • VTB
    • VEB.RF
    • The Russian Direct Investment Fund
    • Alfa Bank
    • Sberbank
    • Gazprombank
    • Credit Bank of Moscow
    • Rosselkhozbank
    • FC Bank Otkritie
    • Promsvyazbank
    • Sovcombank
    • Transkapitalbank
    • Any other comparable Russian financial institution as determined by the President

In addition, the following Belarusian financial institutions will be subject to sanctions:

  • Belarusbank
  • BPS-Sberbank
  • Belinvestbank
  • The Development Bank of Belarus
  • Alfa Bank Belarus
  • BSB Bank


  • Any entity determined to be engaged in transactions involving the debt of not fewer than 10 entities owned or controlled by the Government of the Russian Federation (i.e. Russian sovereign debt)
  • Any entity in any of the following sectors or industries of the Russian Federation:
    • Oil and gas extraction and production
    • Metals extraction, mining, and
    • roduction
    • Minerals extraction and processing
    • Any other sector or industry with respect to which the President determines the imposition of sanctions is in the United States national security interest

Notably, regarding the sanctions against the Russian oil and gas industry, the Act provides that the US shall make efforts to (1) mitigate the impact of Russian restrictions on natural gas, coal, and oil exports to Europe (2) ensure sufficient energy supplies to Europe in the event of the imposition of the sanctions and (3) implement requirements to address energy supply shortfalls caused by the imposition of sanctions or the termination of energy supplies by the Russian Federation.

In contrast to how US sanction regimes generally are structured the Act does not contain any wind-down provisions enabling entities to terminate business relationships without running the risk of falling foul of sanctions, save for a very minor delay of 30 days that the President may apply regarding the sanctioning of foreign financial institutions.

The Act is available here:>>> 

Companies having a business relationship with Russia, Ukraine or Belarus, or companies being dependent of products originating from these countries, are recommended to review their operations, identify risk areas, and investigate whether any steps can be taken in order to mitigate the risks. If necessary, legal advice should be obtained.