The Week in Review delivers information and analysis on recent developments related to sanctions against Russia and key implications for the public, private, and non-profit sectors as the United States (U.S.), the European Union (EU), and the United Kingdom (UK) continue to lead a global sanctions campaign that has been unprecedented in its speed, complexity, and impact in responding to Russia’s ongoing war against Ukraine.
DOLFIN users can visit the updated Russia Sanctions page on DOLFIN to find additional resources and information on sanctions against Russia, including sanctions evasion typologies, case studies, and analysis on other sanctions programs implicating Russian actors, such the Global Magnitsky Sanctions Program Targeting Human Rights Violations and Corruption.
Recent Developments Related to Sanctions Against Russia
Since the last update on 21 July, a number of sanctions-related actions took place and are detailed below. These actions include the U.S. Treasury’s designation of additional individuals and entities under its Russia sanctions program; the European Union’s adoption of its seventh round of sanctions targeting Russia; and the UK government announcing prohibitions against the provision of professional services to Russia.
U.S. actions include:
- On 2 August, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the U.S. Department of State designated additional individuals and entities pursuant to Executive Order 14024. The new designations included:
- Blocking sanctions on 13 individuals, including close associates to the Kremlin;
- Blocking sanctions on 36 entities, including entities operating in the technology sector of the Russian Federation economy; and
- Visa restrictions on 893 Russian Federation officials.
- On 29 July, OFAC designated two individuals and four entities that allegedly played roles in supporting Russia’s malign influence operations and foreign election interference activities.1 According to a Treasury press release, one of the designated individuals, Aleksandr Ionov, worked with the Russian Federal Security Service (FSB) as a “co-optee” to promulgate the Kremlin’s disinformation and malign influence agenda. Ionov’s activities included founding the so-called Anti-Globalization Movement of Russia, which “maintained connections with separatists and anti-establishment groups in the United States and abroad, holding conferences and protests in the United States in opposition to U.S. policy.” Concurrently, the U.S. Department of Justice unsealed an indictment against Ionov.2
EU-related actions include:
- On 26 July, the European Council amended Decision 2014/512 to extend the restrictive measures against Russia for another six-month period through 31 January 2023.3 The prolonged sanctions regime covers the major part of EU sanctions against Russia, including restrictions on the finance, energy, technology, transport, and luxury industries.
- On 22 July, the European Council announced additional asset freeze sanctions targeting 54 individuals and 10 entities, including Sberbank, companies operating in the military or shipbuilding industries, and Russian military leaders and staff.4
- On 21 July, the European Union adopted its seventh round of sanctions against Russia.5 Dubbed a “maintenance and alignment” package, the new sanctions ban the importation of gold and jewelry from Russia—similar to recent bans imposed by Group of Seven countries.6 The new package also broadens the list of controlled items that are banned for export to Russia.
UK actions include:
- On 26 July, the UK government announced additional sanctions targeting the Russian-imposed “Prime Minister” and “First Deputy Chairman” of the so-called Donetsk and Luhansk People’s Republics.7 Additionally, the UK designated 29 regional governors across Russia who have supported and facilitated “the Russian occupation in attempting to wrest territory from Ukraine,” as well as the nephews of Alisher Usmanov, a Putin crony who was designated by the UK in March 2022. The sanctions include asset freezes and travel bans.
- On 21 July, the UK’s Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 went into effect.8 The new regulations prohibit, among other things, “the provision of accounting, business and management consulting, and public relations services to persons connected to Russia.” Additionally, the regulations prohibit the importation into the UK of gold, oil and oil products, as well as coal and coal products originating in or consigned from Russia.
Key Implications (Public, Private, and Non-Profit Sectors)
The ongoing designations of individuals and entities in or otherwise related to Russia continues to increase the risk of engaging in prohibited activity. Additional sanctions targeting parties acting on behalf of sanctioned targets or otherwise engaging in sanctions evasion should be anticipated. Understanding red flags associated with sanctions evasion continues to be a key tool to ensuring compliance.
Actions like the ban on professional services implemented by the UK and the ban on gold exports implemented by the UK and EU demonstrate that there continues to be coordination among the U.S., EU, and UK regarding Russia sanctions. However, financial institutions and those engaged in global commerce should pay attention to the variations in the scope and timing of the prohibitions in order to ensure compliance with all applicable regimes. Screening lists should be updated in a timely manner to ensure the prompt restriction of assets or other activity to the ever-increasing body of targets related to Russia.
The ban on professional services in the UK is a major change for parties subject to the UK’s sanctions jurisdiction, and many firms that provide accounting, business and management consulting, and public relations services are expected to be impacted by the new prohibitions. Parties who provide such services should evaluate their potential exposure to ensure that they are not serving clients in Russia knowingly or inadvertently in breach of the new regulations.
1 Treasury Targets the Kremlin’s Continued Malign Political Influence Operations in the U.S. and Globally (29 July 2022), https://home.treasury.gov/news/press-releases/jy0899.
2 Russian National Charged with Conspiring to Have U.S. Citizens Act as Illegal Agents of the Russian Government (29 July 2022), https://www.justice.gov/opa/pr/russian-national-charged-conspiring-have-us-citizens-act-illegal-agents-russian-government.
3 Russia: EU Renews Economic Sanctions Over Russia’s Military Aggression against Ukraine for Further Six Months (26 July 2022), https://www.consilium.europa.eu/en/press/press-releases/2022/07/26/russia-eu-renews-economic-sanctions-over-russia-s-military-aggression-against-ukraine-for-further-six-months/.
4 Russia’s Aggression Against Ukraine: The EU Targets Additional 54 Individuals and 10 Entities (22 July 2022), https://www.consilium.europa.eu/en/press/press-releases/2022/07/22/russia-s-aggression-against-ukraine-the-eu-targets-additional-54-individuals-and-10-entities/.
5 Russia’s Aggression Against Ukraine: EU Adopts “Maintenance and Alignment” Package (21 July 2022), https://www.consilium.europa.eu/en/press/press-releases/2022/07/21/russia-s-aggression-against-ukraine-eu-adopts-maintenance-and-alignment-package/.
6 UK Sanctions Russian Gold Exports (26 June 2022), https://www.gov.uk/government/news/uk-sanctions-russian-gold-exports.
7 UK Sanctions Russian Officials Propping Up Putin’s Proxy Administrations in Ukraine (26 July 2022), https://www.gov.uk/government/news/uk-sanctions-russian-officials-propping-up-putins-proxy-administrations-in-ukraine.
8 The Russia (Sanctions) (EU Exit) (Amendment) (No. 14) Regulations 2022 (21 July 2022), https://www.legislation.gov.uk/uksi/2022/850/made.