More and more jurisdictions are supporting Ukraine by applying sanctions regimes covering different economic, trade and other aspects in an effort to suppress Russia’s ongoing invasion of Ukraine.
Among the nations that have imposed economic restrictions, Canada is targeting financial activities with specific financial entities that have already been sanctioned internationally, as well as for designated individuals. On top of these measures, Japan has included asset freeze on the same institutions, while Australia has sanctioned over 300 people and entities, including members of the Russian State Duma and ‘’oligarchs whose economic weight is of strategic significance to Moscow’’
Here, Coinfirm’s Regulatory Affairs department explores the latest sanctions regimes from the US’ OFAC, the UK’s OFIS HMT and the EU added in the wake of the Ukraine invasion of February 24th. There were already existingsanction regimes in place by these bodies against certain Russian entities and individuals following the Crimea annexation.
USSanctions on Russia and Belarus Following the Ukraine Invasion
The US Treasury’s Office of Foreign Assets (OFAC) has been quick to imposesanction regimes on the Russian Federation following the full-scale invasion of Ukraine. So far (as of 3rd of Mar) OFAC has issued 4 Russian Harmful Foreign Activities Sanctions Directives (1A, 2,3 and 4), and updates to the Specially Designated Nationals list. The White House has also issued an Executive Order.
Directive 1 – Under Executive Order of April 15th, 2021 Blocking Property With Respect to Specified Harmful Foreign Activities Of the Government Of The Russian Federation (Superseded by Directive 1A)
Directive 1A – Prohibitions Related to Certain Sovereign Debt of the Russian Federation (February 22, 2022)
| Who Must Comply? | Who Is Sanctioned? | Prohibits |
| US Financial Institutions | – Central Bank – National Wealth Fund – Ministry of Finance of the Russian Federation | – Participation in primary and secondary markets for bonds issued by the sanctioned institutions – Lending funds to the sanctioned institutions |
Directive 2 – Prohibitions Related to Correspondent or Payable-Through Accounts and Processing of Transactions Involving Certain Foreign Financial Institutions (February 24, 2022)
| Who Must Comply? | Who Is Sanctioned? | Prohibits |
| US Financial Institutions | – Sberbank and subsidiaries owned in more than 50% by Sberbank – Annex 2 to the Directive lists 25 subsidiaries; however all entities owned in more then 50% by Sberbank are covered (not only those identified by OFAC) | – Processing of transactions involving sanctioned entities – Opening or painting correspondent banking accounts or payable through accounts for the sanctioned entities |
Annex for Directive 2
- PUBLIC JOINT STOCK COPANY SBERBANK OF RUSSIA
- ARIMERO HOLDING LIMITED
- IKS JOINT STOCK COMPANY
- INSURANCE COMPANY SBERBANK INSURANCE LIMITED LIABILITY COMPANY
- INSURANCE COMPANY SBERBBANK LIFE INSURANCE LIMITED LIABILITY COMPANY
- JOINT STOCK COMPANY RASCHETNIYE RESHENIYA
- JOINT STOCK COMPANY SBERBANK
- JOINT STOCK COMPANY SBERBANK AUTOMATED TRADE SYSTEM
- JOINT STOCK COMPANY SBERBANK LEASING
- JOINT STOCK COMPANY SBERBANK PRIVATE PENSION FUND
- LIMITED LIABILITY COMPANY MARKET FUND ADMINISTRATION
- LIMITED LIABILITY COMPANY PROMISING INVESTMENTS
- LIMITED LIABILITY COMPANY SBERBANK CAPITAL
- LIMITED LIABILITY COMPANY SBERBANK CIB CAPITAL
- LIMITED LIABILITY COMPANY SBERBANK FACTORING
- LIMITED LIABILITY COMPANY SBERBANK FINANCIAL COMPANY
- LIMITED LIABILITY COMPANY SBERBANK INSURANCE BROKER
- LIMITED LIABILITY COMPANY SBERBANK INVESTMENTS
- LIMITED LIABILITY COMPANY YOOMONEY
- OPEN JOINT STOCK COMPANY BPS-SBERBANK
- SB SECURITIES SA
- SBERBANK EUROPE AG
- SETELEM BANK LIMITED LIABILITY COMPANY
- SUBSIDIARY BANK SBERBANK OF RUSSIA JOINT STOCK COMPANY
- TEKHNOLOGII KREDITOVANIYA LIMITED LIABILITY COMPANY
- VYDAYUSHCHIESYA KREDITY MICROCREDIT COMPANY LIMITED LIABILITY COMPANY
Directive 3 – Prohibitions Related to New Debt and Equity of Certain Russia-related Entities (February 24, 2022)
| Who Must Comply? | Who Is Sanctioned? | Prohibits |
| US persons or activities taken with the US | – List of designated entities as per Annex below | – Transactions, financing and ‘other dealings’ in new debt of longer than 14 days maturity and new equity of sanctioned entities – Transactions, financing and ‘other dealings’ in the property or interest in property |
Annex for Directive 3
- CREDIT BANK OF MOSCOW PUBLIC JOINT STOCK COMPANY
- GAZPROMBANK JOINT STOCK COMPANY
- JOINT STOCK COMPANY ALFA-BANK
- JOINT STOCK COMPANY RUSSIAN AGRICULTURAL BANK
- JOINT STOCK COMPANY SOVCOMFLOT
- OPEN JOINT STOCK COMPANY RUSSIAN RAILWAYS
- PUBLIC JOINT STOCK COMPANY ALROSA
- PUBLIC JOINT STOCK COMPANY GAZPROM
- PUBLIC JOINT STOCK COMPANY GAZPROM NEFT
- PUBLIC JOINT STOCK COMPANY ROSTELECOM
- PUBLIC JOINT STOCK COMPANY RUSHYDRO
- PUBLIC JOINT STOCK COMPANY SBERBANK OF RUSSIA
- PUBLIC JOINT STOCK COMPANY TRANSNEFT
Directive 4 – 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 (February 28, 2022)
| Who Must Comply? | Who Is Sanctioned? | Prohibits |
| US persons or activities taken with the US | – The Central Bank – The National Wealth Fund – The Ministry of Finance of the Russian Federation | – Any transactions involving these entities |
Russian Entities SDN Updates – see US Treasury website here, here, here and here for further details
| Who Needs to Comply | Who Sanctions Are Imposed On | What Is Required |
| US persons | – VTB Bank Public Joint Stock Company – Public Joint Stock Company Bank Financial Corporation Otkritie (Otkritie) – Open Joint Stock Company Sovcombank (Sovcombank) – Joint Stock Commercial Bank Novikombank (Novikombank) – A number of senior Russian officials or individuals being associated with Putin – President Putin and three other senior Russian officials – Nord Stream 2 | – Blocking/ freezing assets owned by designated individuals or entities (including entities owned more than 50% by a designated entity) |
*Nord Stream 2 was sanctioned on the 23rd Feb
Belarus Entities SDN Update – see US Treasury website for further details
| Who Needs to Comply | Who Sanctions Are Imposed On | What Is Required |
| US persons | – 24 Belarusian individuals and entities including Belarusian state-owned banks, defence and securities industries and defence officials | – Blocking/ freezing assets owned by designated individuals or entities (including entities owned more than 50% by a designated entity) |
Executive Order on Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to Continued Russian Efforts to Undermine the Sovereignty and Territorial Integrity of Ukraine – see White House website for further details
| Who Needs to Comply | Who Sanctions Are Imposed On | What Is Required |
| US persons | – “Self-declared” independent states of Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR) – People facilitating the secession of the regions | – New investments in the DNR and LNR regions – Imports from or exports to these regions – Any involvement by U.S. persons in transactions by foreign persons that would otherwise violate these sanctions if performed by a U.S. person or within the U.S. – Blocking assets held by people and entities that operate in the DNR and LNR regions, members of leadership at such entities, people and entities controlled by or acting on behalf of blocked persons, and people and entities providing material support to blocked persons |
EU Sanctionson Russia and BelarusFollowing the Ukraine Invasion
Sanctions on Russia have been imposed by the European Council since 2014, when on July 31st, the Council adopted Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.
In view of the unprovoked attack of the Russian Federation on Ukraine, the European Council concluded that ‘’By its illegal military actions, Russia is grossly violating international law and the principles of the United Nations Charter, and undermining European and global security and stability.’’
Additionally, an urgent call was made to adopt further individual and economic sanctions after requesting Russia-backed armed formations to stop their disinformation campaign.
On 1 March 2022, the European Council adopted new Regulations and Decisions targeting financial services.
Financial Services
Imposed Sanctions
- Investing, participating or contributing to projects co-financed by the Russian Direct Investment Fund is prohibited. This does not apply to such activities bound by contracts concluded before 2 March 2022 or ancillary contracts necessary for the execution of such contracts.
- It is prohibited to 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.
- As of 12 March 2022 it is prohibited the provision of specialised financial messaging services, which are used to exchange financial data, to the entities listed below or to any legal person, entity or body established in Russia whose proprietary rights are directly or indirectly owned for more than 50 % by these entities.
Sanctioned Entities:
- Bank Otkritie
- Novikombank
- Promsvyazbank
- Bank Rossiya
- Sovcombank
- VNESHECONOMBANK (VEB)
- VTB BANK
The full list of sanctioned financial entities (including the recent additions) can be found here.
The European Commission adopted further targeted sanctions against Russia and Belarus, amending Regulation (EC) 765/2006 concerning restrictive measures against President Lukashenko and certain officials of Belarus and Regulation (EU) 833/2014 concerning restrictive measures in view of Russia’s actions in Ukraine.
The update was agreed upon in order for Member States to better align with EU sanctions regarding the two jurisdictions and strengthen their efficiency against evasion.
The new measures impose the following on Belarus;
- SWIFT services are restricted to a number of Belarusian banks and their subsidiaries
- Transactions with the Central Bank of Belarus are prohibited
- As of 12 April 2022, Belarus state-owned entities are refused any share-related services on EU trading venues
- Member States will not be accepting deposits over €100K from Belarusian nationals or residents
- Belarusians are restricted from owning accounts with the EU central securities depositories
- Euro-denominated securities, as well as banknotes are restricted to all Belarus nationals and entities
EU sanctions on Russia are now extended to 160 individuals, bringing the total to 862 individuals and 53 entities.
In addition, restrictions regarding loans and credit now include crypto assets, considered “transferable securities”, while the exemption of accepting deposits exceeding €100,000 in EU banks extends to Swiss and EEA nationals.
OFSI HMT Sanctionson Russia Following the Ukraine Invasion
Since February 24th, the Office of Financial Sanctions Implementation (OFSI) of Her Majesty’s Treasury (HMT) has issued several Financial Sanctions Notices updating its Consolidated Lists Of Financial Sanctions Targets for Asset Freezes and Investment Bans – all of which are available here.
HMT Financial Sanctions Notices
Who needs to obey?
• All individuals and legal entities who are within or undertake activities within the UK’s territory must comply with UK financial sanctions that are in force.
• All UK nationals and legal entities established under UK law, including their branches, must also comply with UK financial sanctions that are in force, irrespective of where their activities take place.
Financial and Investment Restriction
Who needs to obey?
Any individual/legal entity dealing in the following services:
- Payment and money transmission services, including credit, charge and debit cards, travellers’ cheques and bankers’ drafts
- Transferable securities or money-market instruments
- Loan and credit arrangements
- Investments in relation to Crimea
Which entities sanctions are imposed on:
- 24/02/2022
- NITED AIRCRAFT CORPORATION (Group ID: 13121)
- URALVAGONZAVOD (Group ID: 13122)
- VTB BANK (Group ID: 13080)
- 01/03/2022
- PJSC SBERBANK (PUBLIC JOINT-STOCK COMPANY SBERBANK) (Group ID: 13079)
Asset Freeze
Asset freezes, restrictions on making funds and or economic resources available to certain persons, entities or bodies responsible for engaging in, providing support for, or promoting any policy or action that destabilises Ukraine or undermines or threatens the territorial integrity, sovereignty and independence of Ukraine, or obtains a benefit from or supporting the Government of Russia, either directly or indirectly.
Who sanctions are imposed on:
- 25/02/2022
- Vladimir Vladimirovich PUTIN (Group ID: 14196)
- Sergei Viktorovich LAVROV (Group ID: 14197)
- 28/02/2022
- VEB.RF (Group ID: 14198)
- BANK OTKRITIE FINANCIAL CORPORATION PJSC (Group ID: 14199)
- PJSC SOVCOMBANK (Group ID: 14200)
- 01/03/2022 (1st Notice)
- Andrei Burdyko (Group ID: 14203)
- Victor Vladimirovich Gulevich (Group ID: 14204)
- Sergei Simonenko (Group ID: 14205)
- Andrey Zhuk (Group ID: 14206)
- 01/03/2022 (2nd Notice)
- Kirill Alexandrovich DMITRIEV (Group ID: 14208)
- RUSSIAN DIRECT INVESTMENT FUND (Group ID: 14207)
***This page is subject to change. Last updated: 10/03/2022
