Russia Sanctions: The U.S., EU, and UK continue to apply pressure on Russia through new sanctions on oligarchs and politicians and restrictions on exports. A number of other countries have implemented similar measures and continue to widen the scope of such prohibitions as the invasion continues. On a more limited scale, Belarus has also been subject to new EU restrictions targeting certain financial institutions. As the invasion continues, we expect additional sanctions and export controls in the near future.
Financial Sector Restrictions: The most recent actions have focused on the Belarusian financial sector. The EU expanded its prohibition on SWIFT access to three Belarusian banks: Belagroprombank, Bank Dabrabyt, and Development Bank of the Republic of Belarus, which means these banks will be removed from SWIFT effective March 20, 2022. This action follows the EU’s previous announcement that seven major Russian banks and majority-owned subsidiaries will be disconnected from SWIFT. The EU also announced that transactions related to the management of reserves or assets of the Central Bank of Belarus are prohibited.
Oligarch Sanctions: A number of additional oligarchs and prominent businesspeople were sanctioned by the UK and EU this week. These individuals are involved in key economic sectors that provide a substantial source of revenue to Russia, including the oil, metallurgical, agriculture, pharmaceutical, telecom, and industrial industries. As the list of sanctioned oligarchs continues to expand, identifying the companies and entities that may also be sanctioned by operation of law, as a result of oligarch ownership or control, will continue to pose a challenge to businesses globally. We expect the U.S., UK, and EU will continue to target oligarchs as the invasion continues.
Export Controls & Energy Sanctions: As anticipated, the U.S. announced a ban on the import of Russia origin oil, petroleum, and natural gas. The Executive Order also prohibits “new investment in the energy sector.” The definition of “investment” is broad and includes any transaction involving a “contribution of funds or other assets for” new “energy sector activities” that are “located or occurring” in Russia after March 8, 2022. As a result, this may effectively prohibit the export of any goods for use in the Russian energy sector after March 8, 2022. The UK announced that it would “phase out” the import of Russian oil over the course of 2022, but offered no specific guidance.
The EU imposed a prohibition on the export of maritime navigation goods and technology to Russia. This restriction applies to navigation equipment and radio-communication equipment and the provision of technical or financing related to such goods.