What you need to know about new sanctions on Russia: a brief overview
8 March 2022
Our litigation and dispute resolution lawyers answer the questions you may have following the invasion of Ukraine and sanctions announced by the UK against Russia.
What is the purpose of sanctions, and specifically those targeted at Russia?
Sanctions help the UK meet its foreign policy and national security aims, while maintaining confidence in its business sectors. Sanctions regimes are imposed for a variety of reasons such as proliferation of nuclear weapons, terrorist activity, and violation of human rights.
The sanctions regime imposes serious and extensive restrictions on dealing with people who are listed.
The sanctions are wide ranging, and target other people and organisations as well as Russian interests.
In relation specifically to Russia, the Russia (Sanctions) (EU Exit) Regulations 2019 (the Regulations) came fully into force on 31 December 2020. They are intended to ensure that certain sanctions relating to Russia continue to operate effectively. A revised version of the Regulations can be found here.
In the light of the recent invasion of Ukraine by Russia, the UK Government has imposed further sanctions on Russia, and people with links to Russia. The sanctions are all aimed at encouraging Russia to cease actions destabilising, undermining or threatening the territorial integrity, sovereignty or independence of Ukraine.
What do the Regulations mean for individuals and businesses in the UK?
The Regulations impose financial, trade, shipping and immigration sanctions. These include asset freezes, prohibitions on making funds or services available, prohibitions on the trade of certain goods and services, barring Russian ships from UK ports and travel bans.
The sanctions apply within the UK and in relation to the conduct all UK individuals and businesses wherever they are in the world.
The UK Sanctions List lists those sanctioned under the Regulations as well as the sanctions applied to them. It is updated frequently.
Certain firms (called ‘relevant firms’ in the Regulations) also have reporting obligations to the UK Government concerning sanctioned individuals or those that may have breached the Regulations.
What happens if I breach the Regulations?
The Regulations make it a criminal offence to breach the trade, shipping and financial sanctions, as well as to enable or facilitate a contravention of, or to circumvent, any of the prohibitions in the Regulations.
You can obtain a licence to carry out sanctioned activity in limited circumstances. This must be sought in advance.
There are also certain exemptions set out in the Regulations that apply automatically.
What about EU or US sanctions?
UK sanctions are not fully aligned with EU or US sanctions.
Sanctions in other jurisdictions may therefore be relevant. For instance if a transaction in whole or part is in US dollars, as dollars transactions are cleared through New York on a daily basis, the US sanctions may apply.
A non-US entity may also be subject to the US sanctions regime if, for example, they are found to have “materially assisted” entities designated under US sanctions. That might include any transaction that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate any of the prohibitions in the US sanctions regime.
If you are unclear about any part of the Regulations or how they could apply to you, we highly recommend that you seek legal advice.
Please contact Andrew Kinnison, Will Arran or Adam Blenkinsop if you wish to discuss the issues raised in this article in more detail.
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William Arran
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Adam Blenkinsop
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Andrew Kinnison
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at March 2022.