The Russian invasion of sovereign and independent Ukraine is subject to ongoing global condemnation. In response to the attack, the international community has formed a united front and introduced significant, damaging sanctions on the Russian state, its government, members of parliament, banks, oligarchs and other closely associated individuals and entities.
On 23rd February 2022, the Council of the European Union released its first package of sanctions and measures following the decision by Russia to proceed with the recognition of the non-government-controlled areas in Ukraine as independent entities, thus sending Russian troops into these areas. Initially, the EU extended its targeted restrictive measures to cover all the 351 members of the Russian State Duma, who voted in favour.
Moreover, targeted restrictive measures were imposed on additional 27 high-profile individuals and entities, who played a critical role in the Ukraine crisis. These include decision-makers such as;
- members of the government involved in the illegal decisions;
- banks and businesspersons/oligarchs financially or materially supporting Russian operations or benefitting from them;
- senior military officers; and
- individuals who are leading a disinformation campaign against Ukraine.
Restrictive measures include an asset freeze and a prohibition from making funds available to the listed individuals and entities as well as a travel ban that prevents these listed individuals from entering or passing through EU territory.
The decision also introduced an import ban on goods emanating from these areas, restrictions on certain trade and investments, prohibitions on tourism services and an export ban for certain goods and technologies. Furthermore, the Council introduced several financial restrictions on Russia’s access to the EU’s capital and financial markets, aiming to limit financing of the Russian Federation.
On 25 February 2022, a day after the Ukraine attacks commenced, the Russian President and Minister of Foreign Affairs were both sanctioned by the EU. Additional restrictive measures were imposed on the members of the National Security Council of the Russian Federation. The EU has plans to target individuals who facilitated the Russian military aggression from Belarus.
This package expands on the existing financial restrictions, cutting Russian access to the most important EU capital markets. It also prohibits certain investment activities and imposes restrictions on deposits and public financing. It introduces new measures which significantly limit the financial inflows from Russia to the EU. These sanctions will target Russian banks and key state-owned companies, including those in the field of defence. Plans are also envisaged to tackle Russian fortunes hidden in safe havens within the EU.
The EU will prohibit the sale, supply, transfer or export to Russia of specific goods and technologies in oil refining and will introduce restrictions on the provision of related services. An export ban was introduced covering goods and technology in the aviation and space industry, as well as a prohibition on the provision of insurance and reinsurance and maintenance services related to those goods and technology.
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, including products such as semiconductors or cutting-edge technologies.
So far, restrictive measures will apply to a total of 654 individuals and 52 entities. As the crisis continues, one can expect the EU to issue new measures and further sanctions. Thus, subject persons are reminded of their regulatory obligation in complying with these sanctions as well as those issued by the United Nations and national authorities issued under the National Interest (Enabling Powers) Act.