Territory-based Sanctions; Sanctions on Banks, State-Owned Entities, and Individuals; Correspondent Account Sanctions; Debt and Equity Restrictions; Sovereign Debt Restrictions; Restrictions on Dealing with the Russia Central Bank and Finance Ministry; Restrictions on Imports, Exports, and New Investments; and Import Bans.
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), and Singapore 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. Broad export controls restrict Russia’s access to -use items, and also target Russia’s defense, aerospace, and maritime sectors. [See links above for summaries of the U.S., EU, UK, and Singapore 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, and Singapore administrations have warned that more severe restrictions may be necessary over time.
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
- There have been several “tranches” of restrictions.
- The restrictions generally have immediate effect, though some sanctions include specific wind-down periods.
- There is a high degree of coordination among countries imposing sanctions against Russia.
- Sanctions against the so-called DNR and LNR regions closely resemble sanctions imposed against Crimea in 2014.
- Sanctions have largely targeted the financial sector — including major Russian banks — but not all Russian financial institutions are sanctioned.
- The new export controls on Russia are very broad and complex, covering many commercial items previously outside of, respectively, U.S. and EU jurisdiction.
- Restrictions have also been placed on the Russian energy sector by the U.S. and the EU. The importation into the U.S. of crude oil, petroleum, liquified natural gas, coal, and related products of Russian origin is prohibited, as is new investments in the sector by a U.S. person. The EU has also enacted a partial ban on the import of Russian crude oil and petroleum products.
- Restrictions extend broadly to new investments in Russia, including certain purchases of Russian debt and equity.
- Companies should be prepared for additional sanctions in the future.
- 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.
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