Major Sanctions Developments

EU Launches Fifth Sanctions Package Against Russia. European Commission President Ursula von der Leyen revealed the fifth round of sanctions against Russia following atrocities committed by President Vladimir Putin's forces in the formerly Russian-occupied town of Bucha. She said the latest sanctions package “has six pillars”:

  • A ban on the import of Russian coal to the European Union;
  • A full transaction ban on four key Russian banks, among them VTB, the second largest Russian bank;
  • A ban on Russian vessels and Russian-operated vessels from accessing EU ports;
  • Additional export controls in quantum computers, advanced semiconductors, sensitive machinery, and transportation equipment;
  • Specific import bans on products ranging from cement and wood to seafood and liquor; and
  • Targeted measures such as a general EU ban on participation of Russian companies in public procurement in Member States or exclusion of all financial support.

Von der Leyen added: “We are working on additional sanctions, including on oil imports, and we are reflecting on some of the ideas presented by the member states, such as taxes or specific payment channels such as an escrow account. According to a document seen by the Financial Times, the EU will also discuss adding Herman Gref, the head of Sberbank and longtime Putin associate, and former Rusal owner Oleg Deripaska to its sanctions list. Alexander Shulgin, the chief of Russian ecommerce platform Ozon; Boris Rotenberg, one of Russian President Vladimir Putin’s closest associates; and Said Kerimov, who controls Russia’s largest gold miner, Polyus, will also be put on the list.

U.S. Treasury Sanctions Russian Darknet Site, Hydra Market. The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) announced sanctions targeting Russia-based darknet site Hydra Market in an effort to disrupt the proliferation of cybercrime services, dangerous drugs, and other illegal offerings. In a statement, OFAC said efforts to shut down Hydra is a joint operation involving several U.S. federal agencies in cooperation with international partners. Secretary of the Treasury Janet Yellen said the action taken by the U.S. sends a message to cybercriminals that they cannot hide on the darknet, in Russia, or anywhere else in the world. As part of international cooperation, the German Federal Criminal Police shut down Hydra servers in Germany and seized $25 million worth of bitcoin.

New Zealand Targets Russian Elites in New Round of Sanctions. New Zealand Foreign Minister Nanaia Mahuta unveiled a new round of sanctions targeting 36 Russian oligarchs with close personal ties to President Vladimir Putin or the Kremlin. Among the designated individuals and entities are some of Russia's wealthiest businesspeople, including chairs and CEOs of the country's biggest companies. The sanctions include a ban from traveling to New Zealand, transferring assets to the country, or using its financial systems to evade global sanctions. The New Zealand government also announced that it will introduce a 35 percent tariff on all imports from Russia and would extend existing export controls on industrial products closely connected to strategic Russian industries.

Sanctions Effects and Enforcement

Scotland Businesses Told to Review Ties with Entities Linked to Russian Regime. The Scottish government published guidance on how to reject bids for the procurement of goods and services from Russian and Belarusian entities as part of strengthening sanctions against the Putin regime and its supporters. Scotland's Business Minister Ivan McKee said the local business community has a moral responsibility to review their links with Russian businesses. The latest guidance also applies to companies with substantial business operations in Russia and those under the control of a person with links to the Russian regime.

Sanctioned Russian Oligarch's Yacht Confiscated in Spain. Spanish authorities seized a 255-foot luxury yacht owned by sanctioned Russian oligarch Viktor Vekselberg at the request of the U.S. Department of Justice. Attorney General Merrick Garland said that while the yacht was the first asset belonging to a sanctioned Russian individual seized by U.S. authorities, “it will not be the last.” The U.S. government sought the seizure of the $90 million yacht on allegations that it was acquired using shell companies in 2011 and has been in Vekselberg’s possession ever since. It was further alleged that the yacht was subject to forfeiture based on violation of U.S. bank fraud, money laundering, and sanction statutes.”

U.S. Blocks Russian Debt Payments in Dollars. The U.S. Department of the Treasury will block Russia from making debt payments using dollars held in American banks. The move aims to deplete Russia’s foreign reserves and push it towards a first foreign debt default since the Russian Revolution.

UK Releases New General License for Payments by Russian Central Bank. The United Kingdom issued a general license for payments by the Central Bank of the Russian Federation, the National Wealth Fund of the Russian Federation, or the Ministry of Finance of the Russian Federation related to debt issued by them before 1 March. The UK's Russia sanctions regime authorizes until 30 June the provision of financial services for the purposes of the receipt and transfer of non-ruble denominated interest, coupon, maturity, or principal payments from the Central Bank of Russia, the Russian National Wealth Fund, or the Russian Ministry of Finance.

Singapore Central Bank Says Financial Institutions Must Cooperate with Russian Sanctions. The Monetary Authority of Singapore (MAS) announced that the financial measures imposed by the Singapore Government in relation to Russia apply to all financial institutions (FI) operating in the country, including digital payment token (DPT) service providers. In a statement, MAS noted that it requires all FIs to ensure compliance with the measures, regardless of whether transactions are facilitated using traditional financial channels, through cryptocurrency exchanges, or “decentralized finance” protocols. Singapore's central bank called on both licensed and exempted DPT service providers to exercise robust controls to avoid facilitating prohibited transactions. FIs were also warned against allowing sanctioned parties to use non-traditional forms of finance to bypass economic sanctions.

Sanctions Outlook

Canada to Impose Additional Economic Sanctions Against Russian, Belarusian Regimes. Mélanie Joly, minister of foreign affairs of Canada, announced that the Canadian government is set to implement sanctions against the Russian regime over its invasion of Ukraine and the Belarusian regime for supporting the invasion. In a statement, Joly said that Canada will impose sanctions against nine Russians and nine Belarusians. The minister said that by enabling Vladimir Putin’s invasion, the sanctioned individuals have become complicit in the events currently taking place in Ukraine.

EU, U.S. Consider Sanctions Against Putin Daughters, Ex-Wife. Putin has two daughters, Ekaterina Tikhonova and Maria Vorontsova, with his ex-wife, Lyudmila Putina. He is also alleged to have further children with other partners, with one case highlighted in the 2021 Pandora Papers disclosures.