Major Sanctions Developments

UK Charity Regulator to Investigate Genesis Philanthropy Group. The Charity Commission for England and Wales opened an investigation into Genesis Philanthropy Group after three of its founding trustees were made subject to financial sanctions. Prominent Putin allies Petr Aven, Mikhail Fridman, and German Khan were added to the list of individuals who are subject to the United Kingdom’s financial sanctions against Russia. The inquiry will see if the charity can continue to operate and if the three trustees have discharged their legal duties and responsibilities in managing the organization. In addition to the inquiry, the commission froze the charity’s bank account to ensure that no one can move funds without prior consent. The investigation comes as Aven and Fridman had their shares in the USD 22 billion investment conglomerate LetterOne frozen on 2 March after being designated by the European Union.

Switzerland Implements EU Sanctions Against Russia. Switzerland’s Federal Council adopted new sanctions imposed by the European Union against Russia, targeting 197 additional individuals and nine entities. The EU on 15 March unveiled the latest restrictions on Russia over its invasion of Ukraine, making it the fourth package of sweeping sanctions that target Moscow. The measures include more extensive measures in relation to goods, restrictions on transactions with certain state-owned enterprises, and a ban on providing rating services to Russian clients or entities.

New Zealand Adds Vladimir Putin, Other Individuals and Entities to Sanctions List. The New Zealand government has released the first tranche of targeted sanctions under the Russia Sanctions Act. According to Foreign Minister Nanaia Mahuta, the new release designates 364 additional political and military individuals to the government’s travel ban list. Russian President Vladimir Putin and 12 members of his security council were also added to the sanctions list, along with Promsvyazbank (PSB) and 18 entities associated with the Russian military and undermining of Ukraine’s sovereignty and territorial integrity. The entities on the sanctions list will be subject to asset freezes and bans from operating maritime vessels and aircraft. The government also announced the creation of a Russia sanctions unit to ensure that agencies will implement the restrictions.

Export Controls

Australia Prohibits Aluminum Ore Exports to Russia. Australia imposed an export moratorium on alumina and aluminum ores to Russia. The Australian government said it would work with “exporters and peak bodies that will be affected by the ban to find new and existing markets.” Australia is responsible for fulfilling 20 percent of Russia's alumina needs. The Anglo-Australian multinational mining company and second largest mining corporation in the world, Rio Tinto, owns an 80 percent stake in Queensland Alumina Ltd (QAL) in a joint venture with Russia's Rusal International PJSC, the world’s second-largest aluminum producer. According to a December 2020 Bloomberg report, close Putin ally Oleg Deripaska allegedly continues to control Rusal in violation of a 2018 U.S. sanctions agreement.

Sanctions Effects and Enforcement

U.S. Commerce Department Identifies Aircraft Illegally Exported to Russia. The U.S. Bureau of Industry and Security (BIS) identified commercial and private aircraft that have flown into Russia in violation of the Export Administration Regulations. BIS has warned the public that providing any form of service of these aircraft requires authorization. The latest actions are in response to Russia’s ongoing military aggression toward Ukraine.

Sanctions Outlook

Senior Treasury Official Reports Increase in Crypto Money Laundering Amid Ukrainian Crisis. Nellie Liang, undersecretary for domestic finance at the U.S. Department of the Treasury, said the use of digital assets in illicit financing has seen an uptick since Russia’s invasion of Ukraine, but noted that the transaction volume is too small to significantly help Moscow evade sanctions. Liang explained that the virtual assets ecosystem is too underdeveloped to enable individuals to bypass restrictions. She added that Treasury has been studying the potential use of crypto in money laundering and noted that the Group of Seven economies and other countries have also raised concerns about the issue.

EU Ministers Push for Further Energy Sanctions on Russia. Before a meeting of EU ministers, the foreign ministers of Lithuania and Ireland said that the EU should be moving towards more extensive sanctions on Russia’s energy sector. “It’s unavoidable we start talking about the energy sector, and we can definitely talk about oil because it is the biggest revenue to Russia’s budget," Lithuanian Foreign Minister Gabrielius Landsbergis said. Diplomats told Reuters that Baltic countries including Lithuania are pushing for an embargo on Russian oil and gas, while Germany is warning against acting too quickly due to the already high energy prices in Europe.