Russia-Related Sanctions

*Content last updated on May 16 at 19:00 GMT. Check back for regular updates.

This content focuses on the wide-ranging set of sanctions and export controls enacted by the United States (U.S.), the European Union (EU), the United Kingdom (UK), Singapore, and Japan in response to actions taken by the Russian Federation in Ukraine and surrounding areas.

The sanctions are intended to target Russia, two separatist pro-Russian regions in Ukraine (the so-called Donetsk People’s Republic (DNR) and Luhansk People’s Republic (LNR)) and any individuals, banks, or corporations seen as allies to the administration of Russian President Vladimir Putin. The broad export controls restrict Russia’s access to technologies that support its military capabilities by targeting Russia’s defense, aerospace, and maritime sectors. [See links above for summaries of the U.S., EU, UK, Singapore, and Japan restrictions to date.]

Any organization or individual with investments or other business dealings relating to Russia or Russian individuals and entities should consider the impact these sanctions and export controls may have on their businesses. The fast-moving situation in Ukraine means this regime must be kept under constant review — as the U.S., the EU, the UK, Singapore, and Japan administrations have warned that more severe restrictions may be necessary. The announcement on February 26 that certain Russian banks will be banned from the SWIFT interbank messaging system is the most far-reaching to date.

Sidley’s deeply experienced team of sanctions lawyers is closely monitoring the situation and can help clients successfully navigate the complex web of constantly evolving sanctions.

What You Need to Know

1. There have been several “tranches” of restrictions, with the most severe and complex sanctions and export controls announced between February 23 and 26, 2022 in response to Russia’s invasion of Ukraine.
2. The restrictions generally have immediate effect, though some sanctions include specific wind-down periods.
3. There is a high degree of coordination among countries imposing sanctions against Russia.
4. U.S. and EU sanctions against the so-called DNR and LNR regions closely resemble sanctions imposed against Crimea in 2014. The UK has announced its intention to impose similar restrictions.
5. Sanctions have largely targeted the financial sector — including major Russian banks — but not all Russian financial institutions are sanctioned.
6. Not all Russian financial institution sanctions are the same — there is a wide variety of sanctions imposed, from full blocking sanctions to restrictions on extension of credit.
7. The new U.S. and EU export controls on Russia are very broad and complex, covering many commercial items previously outside of, respectively, U.S. and EU jurisdiction.
8. Restrictions have also been placed on the Russian energy sector by the U.S. – the importation of crude oil, petroleum, liquified natural gas, coal, and related products of Russian origin is prohibited, as is new investment in the sector by a U.S. person.
9. The change in attitude by the U.S. and Germany regarding Nord Stream 2 sanctions reflects the seriousness with which the countries are approaching the current situation, though the U.S. has explicitly stated that sanctions have been designed to minimize the impact on energy.
10. Companies should be prepared for additional sanctions in the future.
11. While Congress has taken a back seat on sanctions thus far, U.S. lawmakers may push for sanctions beyond those enacted by the Biden Administration.