Previously, in response to the situation following the annexation of Crimea in 2014, the Government of Japan implemented the following economic sanctions against Russia: (a) designation of individuals and entities as sanctioned persons or entities deemed to be directly involved in the annexation of Crimea or in the unstable situation in eastern Ukraine; (b) stricter restrictions on the export of arms and other items to the Russian Federation; and (c) a ban on the issuance or offering of securities in Japan by five Russian banks, including Zubelbank, the largest Russian bank. These measures remain in force.
Following the recent actions taken by the Russian Federation in Ukraine, in addition to the above measures, the Government of Japan imposed new economic sanctions against Russia on February 26, 2022 and against Belarus on March 3.
The economic sanctions are broadly divided into two categories: (1) financial measures (e.g., restrictions on investment, and access to international financial markets, and payment) and (2) export controls (e.g., prohibition of import or export). The Foreign Exchange and Foreign Trade Act underlies these sanctions and the Ministry of Foreign Affairs, the Ministry of Finance, and the Ministry of Economy, Trade and Industry jointly announced them.
These two types of sanctions are described in detail below.
(1) Financial Measures
a) The following measures have been taken in respect of designated Russian individuals, Russian banks, Belarusian individuals, Belarusian banks, and persons related to “Donetsk People’s Republic” and the “Luhansk People’s Republic.” Organizations subject to the measures include those in which more than 50 per cent of the total number of shares or capital contributions are directly owned by designated organizations.
i. Payment to the designated persons shall be subject to authorization by the Minister of Finance or the Minister of Economy, Trade and Industry.
ii. Capital transactions, such as deposit contracts, trust contracts and money loan contracts, with the designated persons shall be subject to authorization by the Minister of Finance or the Minister of Economy, Trade and Industry.
b) The following actions by or related to the designated bodies (i.e., the Government of the Russian Federation, the Government Agencies of the Russian Federation, and the Central Bank of the Russian Federation) are subject to the authorization from the Minister of Finance:
i. Issuance or offering of new securities in Japan by the designated bodies;
ii. Acquisition by a resident of Japan of securities newly issued by the designated bodies from a non-resident, or transfer by a resident of Japan of securities newly issued by the designated bodies to a non-resident;
iii. Provision by a resident of Japan of labor or services for the issuance or offering of new securities in Japan by the designated bodies.
c) Issuance or offering of new securities with a maturity exceeding 30 days in Japan by the designated bodies (Sberbank, VTB Bank, Bank for Development and Foreign Economic Affairs, Gazprombank, and Russian Agricultural Bank) is subject to the authorization from the Minister of Finance. Bodies subject to the measure include those in which more than 50 per cent of the total number of shares or capital contributions are directly owned by designated bodies:
(2) Export Controls
The following measures have been taken:
i. Prohibition of exports to Russia and Belarus of items subject to the international export control regime, e.g., machine tools, carbon fibers, and high-performance semiconductors;
ii. Prohibition of exports to certain entities in Russia and Belarus, e.g., the Russian Ministry of Defense and, Russian aircraft manufacturers;
iii. Prohibition of exports to both countries of general-purpose goods that are considered to contribute to strengthening the military and other capabilities of Russia and Belarus, e.g., general purpose items such as semiconductors, computers and telecommunications equipment;
iv. Prohibition of exports of oil refining equipment and other equipment to Russia;
v. Prohibition of exports of luxury goods, e.g., alcoholic beverages, tobacco products, clothing and footwear, ceramic products, cars and motorcycles, laptop computers, and watches (with precious metals); and
vi. Prohibition of exports to the “Donetsk People's Republic” and the “Luhansk People's Republic.”
The Government of Japan has also decided to take the following measures:
- To prevent loans to Russia from major multilateral financial institutions, including IMF, the World Bank, and the European Bank for Reconstruction and Development;
- To deal with the sanction evasion by Russia, including through the use of digital assets;
- To revoke “most-favored-nation” status of Russia; and
- To ban imports of other certain goods from Russia, which should be determined in due course.
It should also be noted that visa issuance to Japan has been suspended for designated individuals related to Russia as a non-economic sanction.
The Government of Japan has announced that, in accordance with the G7 Summit Statement in Berlin on March 11, 2022, it will implement additional sanctions to further increase diplomatic and economic pressure on Russia.