News

Sanctions update 3 of March

March 03, 2022

Further to our sanctions newsletter of 25 of February, as amended, EU announced on 2 of March it has imposed the following additional sanctions against Russia and Belarus.

Sanctions newsletter of 25 of February

Russia

• the provision of specialised financial messaging services, which are used to exchange financial data (SWIFT), to Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, VNESHECONOMBANK (VEB), and VTB BANK’. The prohibition will enter into force on the 12th of March. It will also apply to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50% by the above-mentioned banks

• to invest, participate or otherwise contribute to future projects co-financed by the Russian Direct Investment Fund

• sell, supply, transfer or export euro denominated banknotes to Russia or to any natural or legal person, entity or body in Russia, including the government and the Central Bank of Russia, or for use in Russia.

Belarus

• Restrictions in the trade of goods used for the production or manufacturing of tobacco products, mineral fuels, bituminous substances and gaseous hydrocarbon products, potassium chloride (“potash”) products, wood products, cement products, iron and steel products and rubber products

• Restrictions on exports of dual-use goods and technology, and certain advanced goods and technology which might contribute to Belarus’ military, technological, defence and security development, together with restrictions on the provision of related services.

Restrictive measures by the EU as a response to Russia’s war against Ukraine now apply to a total of 702 individuals and 53 entities, include an asset freeze and a prohibition from making funds available to the listed individuals and entities. In addition, a travel ban applicable to the listed persons prevents these from entering or transiting through EU territory.

In addition, OFAC (the US agency administering US sanctions) has issued guidance regarding the interpretation of, in particular, prohibitions related to transactions Involving the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, and the Ministry of Finance of the Russian Federation. The guidance can be found here and here.

In terms of payments, notably, numerous types of transactions are still lawful both under EU and US law. US Department of the Treasury has stated as follows:

While recent actions have closed off many of the funds of the Central Bank of the Russian Federation, among others, Treasury remains committed to permitting energy-related payments — ranging from production to consumption for a wide array of energy sources — involving specified sanctioned Russian banks. To help protect Americans, partners, and allies from higher energy prices that would drive more resources to Russia, Treasury swiftly issued and updated Russia-related guidance to allow U.S. financial institutions to continue processing these transactions and underscore that such activity is not prohibited by sanctions.

Finally, the UK Secretary of State for Transport has issued a statement to all UK ports saying the Department for Transport deemed it ‘inappropriate’ for Russian vessels to continue to enter UK ports, and ports are asked not to provide access to Russian vessels. There are rumours other countries may follow suit but these rumours are unconfirmed. Furthermore, reports in the media suggest that some liner operators have decided not to call Russian ports. Companies involved in trade with Russia are therefore recommended to, in addition of analysing the effects of the EU (and US and UK as applicable) sanctions legislation, investigate the feasibility of the logistical operation generally. In addition, it is recommended to discuss beforehand the prospects to send and receive monies in relation to the intended transaction with the company’s main bank.

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