Since late February 2022, the United States (U.S.), the European Union (EU) and its member states, the United Kingdom (U.K.), and many others—including Japan, Australia, New Zealand, Taiwan and Canada—have imposed sweeping new sanctions on Russia in response to its invasion of Ukraine.
This note updates and consolidates our February 28 publication. It summarizes the most significant new sanctions coming out of the U.S., EU and U.K., as they stood at midnight on March 22, 2022. In addition, it annexes a table of key individuals and entities newly named as being subject to the 2022 U.S., EU and U.K. sanctions.
As a reaction to these sanctions, the Russian government has announced a number of retaliatory sanctions, including foreign currency restrictions and measures targeting foreign businesses in Russia.
The landscape is changing rapidly. We are tracking these developments and may provide further updates as the situation evolves.
Prior to Russia’s invasion of Ukraine, named Russian persons and businesses were already subject to wide-ranging international sanctions, linked to Russia’s annexation of Crimea and other events. Since late February, increasingly intensive rounds of international sanctions have been imposed as the conflict in Ukraine has escalated.
G7 countries removed key Russian banks from using the secure financial messaging system operated by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and imposed sanctions on the Russian Central Bank, designed to significantly restrict the bank’s access to its foreign currency reserves. The G7 have also committed to taking action to deny Russia its most-favored-nation status at the World Trade Organization and continue a campaign of pressure through targeted sanctions and additional trade restrictions of key goods and technology.
The global sanctions range from directly targeting the assets of Russian financial institutions, online media outlets linked to the Russian government disinformation campaign, corporations and individuals to extending restrictions on certain categories of transactions, investment or trade with Russia. The U.S. has banned imports of oil and gas from Russia, and the EU and U.K. have announced plans to substantially reduce their imports. New trade controls on imports and exports of certain categories of goods and a comprehensive trade and investment embargo on the self-proclaimed Donetsk and Luhansk People’s Republics (respectively, DNR and LNR) have also been implemented. Several countries have announced restrictions on the operations of Russian flights in their airspace, and many have implemented travel bans on sanctioned individuals. Many jurisdictions have also targeted Belarusian individuals and entities and/or trade with Belarus in response to Belarus’ support for the Russian campaign against Ukraine.
The U.S. sanctions regime consists of a number of sanctions programs with a combination of country-wide, sectoral, targeted and secondary sanctions. The sanctions program related to Russia and Ukraine is implemented primarily by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC)—along with the State Department and Commerce Department’s Bureau of Industry and Security (BIS)—pursuant to Executive Orders (EOs) issued by the President and legislation passed by Congress. OFAC has laid out additional measures in response to the Russian invasion of Ukraine in a series of new directives with certain wind-down periods and exceptions authorized through general licenses.
The U.S. sanctions regime is binding on all U.S. persons, including all U.S. citizens and permanent resident aliens regardless of their location, all persons and entities within the United States and all U.S.-incorporated entities and their foreign branches. Non-U.S. persons may also be exposed to secondary sanctions risk if they transact with individuals or entities subject to sanctions—including, if they materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, certain activities, a person whose property and interests in property are blocked. Non-U.S. persons may also expose themselves to liability if they “cause” a violation of U.S. sanctions by unlawfully introducing some U.S. nexus to a prohibited transaction. Violations of U.S. sanctions can lead to significant criminal or civil penalties.
The table annexed to this note lists key entities and individuals named in 2022 as being subject to U.S. (as well as EU and U.K.) sanctions.
The new U.S. sanctions implemented in response to Russia’s invasion of Ukraine as of March 21, 2022 include:
The U.S. has also imposed sanctions on Belarus for its role in supporting the Russian invasion. BIS imposed restrictions, similar to those placed on Russia, on the exports of high-tech goods and luxury goods to Belarus. OFAC also designated several Belarusian individuals for their support of the Russian invasion of Ukraine.
In addition to new sanctions, OFAC has issued a number of general licenses that authorize transactions otherwise prohibited by U.S. sanctions. These include wind-down periods for some restrictions and exceptions for certain categories of transactions or with certain individuals or entities.
U.S. President Biden has indicated that the U.S. will take steps in accordance with other G7 nations to deny Russia of its most-favored-nation trade status—a move that would require Congressional action.
Proposed legislation in Congress would build upon the current measures. If adopted into law, a bill passed by the House of Representatives on March 17 would authorize the President to increase tariffs on products of Russia and Belarus until January 1, 2024, seek suspension of Russia’s participation in the WTO and provide the President the authority to restore normal trade relations if aggression against Ukraine ceases. Similarly, a separate bill, passed by the House on March 9, proposes to suspend the import of Russian oil and energy products into the U.S., direct the U.S. Trade Representative to take steps to curb Russia’s access to the World Trade Organization and reauthorize the Magnitsky Act, which provides the authority for the U.S. to sanction any foreign person deemed by the President to be complicit in serious human rights abuses. Separate proposals for legislation are also circulating in the Senate, including bills that would similarly limit trade relations with Russia and Belarus, apply secondary sanctions to certain individuals transacting in Russian gold and that would target sanctions evasion through cryptocurrency by Russia.
In the EU, decisions on the adoption of sanctions are taken by the Council of the European Union on the basis of proposals from the High Representative of the Union for Foreign Affairs & Security Policy. The High Representative together with the European Commission seek to give effect to these decisions by submitting joint proposals for Council regulations, which are then adopted by the Council. The Commission also oversees member-state implementation of EU sanctions regimes.
In addition, member states of the EU are permitted to introduce their own sanctions regimes against third countries. Several EU sanctions have involved or been presaged by similar actions by particular EU member states, notably those concerning the prohibition of Russian aircraft or the use of airspace. The SWIFT sanctions have also been imposed via groups of EU member states and other countries acting together.
The territorial scope of the EU’s Russian sanctions is broad. The sanctions typically apply: (1) within the territory of the EU, including its airspace; (2) on board any aircraft or vessel under the jurisdiction of an EU member state; (3) to EU nationals, wherever they are located; (4) to any legal entity incorporated under the law of an EU member state, whether that entity is situated inside or outside the EU; and (5) to any legal entity in respect of business done in whole or in part within the EU
The table annexed to this note lists key entities and individuals named in 2022 as being subject to EU (as well as U.S. and U.K.) sanctions.
EU sanctions against Russia include the following categories of measures:
A range of exemptions exist, including to permit member states to release frozen funds or resources in certain limited circumstances, such as where necessary to satisfy basic needs such as foodstuffs or medicines or for payment of reasonable professional fees.
Penalties for breaches of EU sanctions are imposed and enforced at a member state level. The European Commission monitors enforcement of sanctions by member states and can launch an infringement procedure against a member state it perceives has failed to comply with its EU law obligations.
The U.K. has historically operated its own sanctions regime, which was distinct from, and often more far-reaching than, that of the EU. The U.K.’s overarching domestic sanctions regime is established under the Sanctions and Anti-Money Laundering Act 2018, which grants the U.K. government wide-ranging powers to introduce and enforce new sanctions.
U.K. sanctions are binding on both individuals and legal entities within (or undertaking activities in) the U.K., as well as U.K. persons (U.K. nationals and entities incorporated under the law of the U.K.) wherever they may be in the world (“U.K. Persons”). They include financial sanctions, described in further detail below, as well as trade, immigration and aircraft and shipping sanctions. Some financial sanctions (e.g., investment bans and asset freezes) are also targeted at categories of firms or individuals which are not specifically designated but should be considered in addition to those named on the U.K. sanctions lists.
The table annexed to this note lists key entities and individuals named in 2022 as being subject to U.K. (as well as U.S. and EU) sanctions. This table does not include entities and individuals falling within generic categories of sanctions (e.g., U.K.-incorporated subsidiaries of Russian entities subject to an investment ban). You can search more generally for financial sanctions applicable to a particular entity or individual using the U.K. government’s consolidated list search tool.
The relevant U.K. financial sanctions in place as of March 21, 2022 include:
The U.K. government has also announced that it will no longer issue any new guarantees, loans or insurance for exports to Russia and Belarus.
Other sanctions measures imposed by the U.K. include an airspace restriction preventing all Russian air traffic from operating in U.K. airspace, maritime restrictions, trade restrictions on a wide range of military, dual-use (i.e., with both civilian and military applications) and other ‘critical-industry’ goods and technology and restrictions on insurance services. The U.K. has also supported international moves to ban Russian banks from SWIFT.
General licenses can be granted by the U.K. Office of Financial Sanctions Implementation, which permit the conduct of activities for a limited period of time that would otherwise be prohibited by the sanctions. These are intended to allow firms to wind down their transactions and affairs with sanctioned entities and individuals in an orderly way.
Specific licenses may be issued in respect of investment bans or financial services restrictions, permitting activities that would otherwise breach sanctions e.g., for humanitarian assistance, activities conducted by or on behalf of financial regulators for the purposes of their regulatory functions, actions taken to protect U.K. financial stability and anything done to deal with an “extraordinary situation.”
Certain firms, including those with permission to conduct regulated activities in the U.K., must notify HM Treasury as soon as possible if, based on information gleaned while conducting their business, they know or have reasonable cause to suspect that a person is a designated person or has committed an offence by breaching the financial sanctions. If the designated person is a customer of the firm, it should also state the nature and amount of funds or economic resources held by it at the time it came to suspect the designated person.
Certain other measures have been announced by the U.K. government but are yet to enter into force. These include limits on the level of deposits Russian nationals may hold in U.K. banks (expected to be set at £50,000). The U.K. government also plans to fast-track measures to increase transparency in U.K. property markets and businesses, phase out imports of Russian oil by the U.K. by the end of 2022 and reduce the U.K.’s dependence on Russian gas.
On February 26, 2022, a joint statement by the U.S., EU, U.K., France, Germany, Italy and Canada condemned Russia’s attack on Ukraine. The states committed to implement certain measures, including preventing certain Russian banks from using the SWIFT messaging system, restrictions on the deployment of international reserves by the Russian Central Bank and creation of a transatlantic task force to identify and freeze assets of sanctioned individuals and companies held within each nation’s jurisdiction. Seven Russian entities (together with their designated Russia-based subsidiaries) were removed from SWIFT on March 12, 2022 and three Belarusian entities will be removed on March 20, 2022.
Blocking selected Russian banks from their ability to use the SWIFT system is a rare step, which will affect their ability to operate in the global financial system. The only other countries whose institutions have been blocked previously from SWIFT are Iran and North Korea.
A G7 joint statement on March 11, 2022 announced additional commitments, including taking action to deny Russia its most-favored-nation status at the World Trade Organization and closing loopholes and methods for evasion, including cryptocurrency.
The Russian government has introduced a range of measures designed to combat the effect of Western sanctions in Russia and/or to have a retaliatory effect. Some are targeted at “unfriendly” states, a list of which have been drawn up and include the U.S., all EU member states, the U.K., Japan, Canada, Australia and New Zealand. In many cases, the Russian legislation requires further guidance from the Russian Bank to establish the parameters of the sanctions. Key measures adopted include:
 The restrictions extend by operation of law under OFAC’s 50 percent rule to any non-listed entities that are majority-owned by a designated SDN.
 The definition of “transferable securities” has been expanded to include crypto-assets. See Council Regulation (EU) 2022/262, Article 1 and Council Regulation 2022/394, Article 1.