Russia/Ukraine Sanctions Update - Month of March

I. US SANCTIONS

• US Department of the Treasury Sanctions Russian Companies Based on a Determination that They Were Supporting Sanctions Evasion: On March 25, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned thirteen entities and two individuals based on a determination that they were operating in the financial services and technology sectors of the Russian Federation economy, including persons developing or offering services in virtual assets, that enable the evasion of US sanctions. Five entities were also designated for being owned or controlled by OFAC-designated persons. Read more >>
  
• US Department of the Treasury Sanctions Companies Based on a Determination that They Were Advancing Russian Malign Activities in Africa: On March 8, OFAC sanctioned two companies - one in Russia, Limited Liability Company Broker Export, and one in the Central African Republic (CAR), Bois Rouge SARLU – based on a determination that they were advancing Russia’s malign activities, including seeking monetary gain from illicit natural resource extraction and providing material and financial support to the Wagner Group and other organizations associated with the enterprise of Yevgeniy Prigozhin, in the CAR. Read more >>
• US Department of State Announces Additional Military Assistance for Ukraine: On March 12, the US Department of State announced an additional package of weapons and equipment for Ukraine. This package provides up to $300 million of arms and equipment under previously directed drawdowns for Ukraine. Capabilities provided include Stinger anti-aircraft missiles, additional ammunition for High Mobility Artillery Rocket Systems, artillery shells, anti-tank weapons, demolitions, and small arms ammunition, and spare parts and other ancillary equipment. Read more >>
• US Attorney General, Merrick B. Garland, Meets with Ukrainian Prosecutor General, Andriy Kostin: On March 11, US Attorney General, Merrick B. Garland, hosted Ukrainian Prosecutor General, Andriy Kostin, Ambassador Oksana Markarova of Ukraine to the United States, and Director Yurii Belousov of the Prosecutor General’s Department for Countering Crimes Committed in Conditions of Armed Conflict. Attorney General Garland expressed the Justice Department’s continued support and commitment to working with Ukraine on all fronts and across numerous areas. Attorney General Garland also highlighted the Justice Department’s work holding Russia accountable for war crimes, including the work of the Justice Department’s War Crimes Accountability Team as well as the Justice Department’s participation in the International Centre for the Prosecution of the Crime of Aggression in The Hague. Read more >>
• US Department of State and German Marshall Fund of the US Establish Ukraine Cities Partnership for Sustainable Urban Recovery: On March 6, the US Department of State and the German Marshall Fund of the United States announced the creation of the Ukraine Cities Partnership for Sustainable Urban Recovery, a new public-private partnership to help Ukrainians redesign and rebuild sustainable, inclusive, and resilient cities. Read more >>
• US Department of Justice Arrests Air Force Employee for Alleged Unlawful Disclosure of Classified National Defense Information: On March 4, the US Department of Justice indicted a US Air Force employee for allegedly providing classified information relating to Russia’s war against Ukraine over a foreign online dating website. Read more >>
• US Department of State Publishes Report on Bombardment of Ukraine’s Power Generation and Transmission Infrastructure: On March 4, the US Department of State published the latest report from the Conflict Observatory, a Yale University Humanitarian Research Lab, which documented 223 incidents of damage to power generation and transmission infrastructure across 17 oblasts in Ukraine. In most of these incidents, the damaged infrastructure was far from the front lines of conflict. Read more >>

II. EU SANCTIONS

• EU Sanctions 33 Individuals and Two Entities: On March 22, 2024, the EU imposed restrictive measures against 33 persons and two entities linked to the sudden death in a penal colony of the Russian opposition politician Alexei Navalny. This decision was taken in the framework of the European Union's Global Human Rights Sanctions Regime.Read more >>, Read more >> andRead more >>
• EU Individual Sanctions over Territorial Integrity Prolonged for a Further Six Months: On March 12, 2024, the EU decided to prolong sanctions measures targeting those responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine for another six months, until 15 September 2024. Read more >> andRead more >>
• EU Sanctions in View of the Situation in Ukraine Prolonged for a Further Six Months: On March 5, 2024, the EU decided to prolong sanctions measures imposed against certain persons, entities and bodies in view of the situation in Ukraine, until 6 March 2025. The EU also updated the framework with regard to the rights of defence and the right to effective judicial protection.Read more >> andRead more >>
• EU's General Court Annuls Sanctions Listing of Mr. Nikita Mazepin: By its judgment of March 20, 2024, the General Court upheld a claim submitted by Mr. Mazepin stating that the acts extending the sanctions measures taken against him are vitiated by an error of assessment. The General Court emphasized that basing sanctions measures solely on the family connection is not sufficient. Read more >>
• EU's General Court Annuls Sanctions Listing of Belshyna AAT: By its judgment of March 20, 2024, the General Court upheld claim submitted by Belshyna AAT, a Belarusian company manufacturing tires, stating that the acts extending the sanctions measures taken against him are vitiated by an error of assessment. The General Court held that the Council committed an error of assessment in considering that the applicant supports the Lukashenko regime and that it is responsible for the repression of civil society. Read more >>
• EU's General Court Dismissed Several Actions against EU Sanctions: On March 6, 2024 the General Court dismissed actions brought by AAT Mostovdrev, a Belarusian company active in the field of wood products, and AAT Byelorussian Steel Works – management company of ‘Byelorussian Metallurgical Company’ holding, a Belarusian company active in the field of iron and steel products. Read more >> andRead more >>
• European Commission Updated Its Russia Sanctions FAQs on Diamonds: On March 1, 2024, the European Commission updated its FAQ regarding Article 3p of Council Regulation (EU) No 833/2014 referring to restrictions on diamonds. Read more >>
• European Commission Updated Its Russia Sanctions FAQs on State-owned Enterprises: On March 25, 2024, the European Commission updated its FAQ regarding Article 5aa of Council Regulation (EU) No 833/2014. Read more >>
• Over 260 Tonnes of Russian Timber Entered Belgium in Breach of EU Sanctions: Although Russian timber imports were banned in the fifth round of EU sanctions, ratified by Member States in April 2022, the Belgian Environment Ministry has found evidence that imports have continued since July 2022 making the end of a period of grace. Read more >>
• Cargo Ship Loaded Russian Timber Seized in Germany: A vessel carrying some €40 million of Russian conflict timber has been seized by German Customs. The vessel was operated by a Canadian-owned shipping firm, Atlantic Ro-Ro Carriers (ARRC), which sail back and forth between Russia and the US with Russian birch ply. ARRC’s lawyers argued that the vessel’s cargo should be exempt, because it only docked in Germany due to an emergency. German Customs have rejected that argument, and ARRC is now set to appeal. Read more >>
• 94 Tankers Violated the Embargo and Brought Russian Oil to the EU During the Last Three Months: According to the Black Sea Group monitoring, between December 5, 2023 and February 29, 2024, Russia exported 82.9 million barrels of oil to the EU through Black Sea Ports, using 94 mainly EU-owned tankers. 68.8% of Russian oil exported to the EU through Black Sea ports were delivered to the raid transshipment in the Gulf of Laconia near the coast of Greece. The other 31.2% were delivered directly to EU ports even though sanctions prohibit it. Read more >>
• Russian Businesses Get Shut Out from Microsoft Cloud Services: To comply with the EU sanctions imposed in December 2023, Microsoft will cease the provision of cloud services to Russian organizations at the end of March. As a result, organizations in Russia will no longer have access to Microsoft products including Office 365 apps, OneDrive, Microsoft Teams, Azure, SharePoint, Visual Studio, SQL Server, as well as LinkedIn apps and Media Player development kits. Read more >>
• A Ban on Nickel Imports to the EU Would Have Disastrous Consequences: The Finish government expressed its opposition to a ban on imports of nickel from Russia. The Russian nickel powder is currently transported to Nornickel’s plant in the Finnish town of Harjavalta for processing, while the copper powder extracted from it is exported back to Russia for further processing. Read more >>
• Latvia Calls to Include Manganese Ore in the Sanctions against Russia: Latvian Prime Minister Evika Silina urged EU leaders to include manganese ore in the list of EU sanctions against Russia. Silina previously said that if manganese ore or aluminum oxide cannot be included in the sanctions list, the Latvian government will look for other solutions. It is reported that the supplies of manganese ore, crucial for the arms industry, to Russia have surged dramatically, and since 2023, these supplies have also been routed through the Port of Sillamae, half of which is owned by Estonia's former prime minister Tiit Vahi, and also Latvia's Riga and Ventspils ports. Read more >>
• EU, US Discussed How to Address China’s Role as Conduit for Goods to Russia: The EU and its allies are considering steps to address the export from China of goods that could help Russia’s military, including by imposing further sanctions. The EU has already imposed sanctions on some entities in China and Hong Kong that it sees as part of procurement networks for buying European products for export to Russia, and is said to continue to do so. Read more >>
• Calls for Sanctions on Russian-origin Aluminium Not on Rusal: Industry group European Aluminium wants the European Union to impose sanctions on aluminium supplied from Russia, but not EU-based companies owned by Rusal which produces bauxite and alumina outside Russia, some of it imported by Europe. The group has been lobbying the EU for a ban on Russian-origin aluminium for its invasion of Ukraine. So far sanctions have not been imposed but they are still on the agenda. Read more >>

III. UK SANCTIONS

• UK Export Control Joint Unit (ECJU) Amends the Open General Export License (OGEL) to Take into Account Recent Changes to Schedule 3 of the Export Control Order 2008: On March 26, 2024, the ECJU published Notice to Exporters 2024/05 stating that an OGEL for the export of dual-use items to EU member states will be updated with effect from 1 April 2024. The updated OGEL will permit the export of items specified by three new entries set out in Schedule 3 of the Export Control Order 2008 (equipment relating to quantum technologies, cryogenic technologies, semiconductor technologies, additive manufacturing equipment and advanced materials) to inter alia EU member states, Australia and the United States. Read more >>
• UK Court of Appeal Dismisses Appeal that Oleg Deripaska Was in Contempt of Court in Connection with Arbitral Proceedings: On March 20, 2024, the UK Court of Appeal handed down judgment in a case relating to an arbitral award granted in favour of Vladimir Chernukhin against Oleg Deripaska in July 2017. Mr. Deripaska was designated as an SDN in April 2018 before Mr. Chernukhin received the arbitral award. Concerned that Mr. Deripaska would repatriate his assets to Russia in order to avoid paying the arbitral award, Mr. Chernukhin successfully sought a freezing order against Mr. Deripaska’s assets. Mr. Derispaska provided an undertaking to the court that he would not take steps to dispose of or deal with shares held in certain companies he owned or controlled (including EN+). In the present case, Mr. Chernukhin argued that Mr. Deripaska was in contempt of court for breaching his undertaking to the court by virtue of changing the domicile of a EN+ from Jersey to Russia. The Court of Appeal dismissed the appeal.Read more >>
• UK Parliamentary Committees Debate the Russia Diamond Ban, the Oil Price Cap and Circumvention: On March 19, 2024, and March 14, 2024, the Lords Grand Committee and the UK Commons Delegated Legislation Committee respectively debated the Russia (Sanctions) (EU Exit) (Amendment) Regulations 2024, which brought into effect a prohibition on Russia diamonds equal to or larger than 1 carat in weight. According to ministers, the Russia diamond ban is expected to impact business worth around £10 million per year. Read more >> andRead more >>
• UK Court Rules against Striking out a Sanctions Defence in Ownership Dispute: On March 13, 2024, the Insolvency and Companies Court ruled against striking out a claim which sought the transfer of ownership of a share in an English company (which in turn owns a villa in Italy) to Lyubov Kireeva (the "Claimant”) and grant declaratory relief as to the ownership of the share. One argument put forward by Alina Zolotova and Basel Properties Limited (the "Defendants”) as to why the declaratory relief should be refused was that the Claimant’s funder was arguably subject to sanctions, and so declarations or transfers of ownership of the share would breach the sanctions regime. The judge decided that the case did not raise fundamental issues about access to justice given sanctions compliance was being considered in the court’s exercise of discretion and it was the funder who was sanctioned, rather than the litigant. Read more >>
• UK Foreign Affairs Committee Holds Evidence Session as Part of Its Inquiry into the Situation in Ukraine and the UK’s Response: On March 12, 2024, the UK Foreign Affairs Committee heard from a minister, officials and academics about the impact and effectiveness of Russia sanctions. Among other things, witnesses commented that “[we] need to put more pressure and more sanctions” in place to affect certain individuals; preventing individuals from travelling to Europe could make a difference; Russia “has a playbook on how to counter some of the financial sanctions and export controls”.Read more >>
• OFSI Amends Russia Oil Price Cap Deadline: On 12 March, 2024, OFSI increased the deadline for providing additional attestations or itemised ancillary costs in connection with the oil price cap from 28 days to within 30 days of a request. Read more >>
• UK Government Increases the Deadline for Providing Certain Information in Relation to the Maritime Services Ban and Oil Price Cap Exception: On March 8, 2024, the UK Government increased the deadline for providing additional attestations or itemised ancillary costs from 28 days to 30 days. The UK’s industry guidance on oil price cap, oil price cap general licence and related reporting forms have been updated to reflect this. Read more >>
• UK Government Revokes One Entry on the UK Sanctions List under the Russia Regime: On March 5, 2024, the UK Government revoked Igor Viktorovich Makarov entry on the UK sanctions list. Mr. Makarov is no longer subject to an asset freeze, travel ban, transport sanctions, or trust services sanctions. Read more >>
• Post-Legislative Scrutiny Memorandum: Sanctions and Anti-Money Laundering Act 2018: On March 4, 2024, the UK Government published a memorandum that provides a summary and preliminary assessment of the provisions and implementation of the Sanctions and Anti-Money Laundering Act 2018. In respect of UK sanctions targeting Russia, the memorandum notes that the UK has amended the Russia (Sanctions) (EU Exit) Regulations 2019 more than 20 times since Russian’s full-scale invasion of Ukraine, increasing the number of UK Russia designations to more than 1900 as well as introducing new sanctions measures in key sectors such as finance, energy and professional services. Read more >>
• UK Government Issues General Trade Licence Relating to Russian Diamonds and Updates Related Guidance: On March 1, 2024, the UK Government issued a General Trade Licence relating to dealings in certain diamonds processed outside of Russia prior to 1 March 2024. At the same time, the UK Government updated its guidance on third country processed Russian diamond measures noting inter alia that (i) traders should be prepared to provide documentation evidencing the weight of the diamonds, the country of origin, the date the diamonds left their country of origin, and the country and facility where processing took place; and (ii) individual licences may be granted by the Department for Business and Trade for the import of certain Russian diamonds if it relates to the execution of obligations arising from contracts concluded before 1 March 2024.Read more >> andRead more >>
• UK Government Amends One Entry on the UK Sanctions List under the Russia regime: On March 1, 2024, the UK Government made a correction to the entry for Vladimir Vladimirovich Mikheychik under the Russia sanctions regime. This individual remains subject to an asset freeze and trust services sanctions. Read more >>
• UK Treasury Committee Launches a New Inquiry into the Effectiveness of Russia Sanctions: On February 29, 2024, the UK Treasury Committee announced the launch of a new inquiry into whether the UK’s programme of economic sanctions is achieving its goal of impeding Putin’s ability to fund Russian armed forces. The committee will scrutinise the work of OFSI, while MPs will be assessing the extent to which it is possible to seize frozen Russian assets and investigate questions such as whether sanctions should be broadened to include any entities buying Russian oil and gas. The deadline for submissions is March 28, 2024. Read more >>

IV. RUSSIA/UKRAINE SANCTIONS

• Ukraine Abolishes the Register of the “International Sponsors of War”: The National Agency of Ukraine for the Prevention of Corruption has announced that it will no longer maintain its register of "International sponsors of war". The register included large multinationals which continued business in Russia after the start of the war. The listing had no legal consequences and was used for “shaming” purposes, however, operation of the register caused controversies between Ukraine and foreign partners. Current information about sanctions imposed by Ukraine is consolidated in the state register of sanctions.Read more >>
• European Commission Proposes Tariffs on Russian, Belarusian Grain: The European Commission proposed on March 22 steep tariffs on imports of Russian and Belarusian grain, oilseeds, and derived products to protect the EU market and cut down Moscow's profits amid its war against Ukraine. The Commission's President, Ursula von der Leyen, presented the proposal to EU member states during a summit that took place in Brussels between March 21 and 22. The measure would impose a tariff of 95 euros ($103) per ton on corn and wheat, as opposed to zero tariffs imposed today. Oilseeds and derived products would be subject to an "ad valorem duty" of 50%. Read more >>
• The Central Bank of Russia Clarified the Requirements for Investments Abroad: From 1 April 2024, Russian residents are not required to receive an individual permission from the Central Bank to pay for shares or deposits in the authorized or share capital of non-residents if the amount of transaction does not exceed 15 million roubles (per transaction and cumulatively to one legal entity). Read more >>
• Russia Bans Entry to over 200 US Policy Makers, Business Leaders, Journalists: On 14 March, the Russian Foreign Ministry added another 227 US citizens to its list of those banned from entering Russia. Russia's list of banned persons has been growing in recent days, with another 367 people from the Baltic states added to the list on March 12, including Estonian Prime Minister Kaja Kallas and Latvian Prime Minister Evika Silina. Read more >>
• Russia Struggles to Collect Oil Payments as China, UAE, Turkey Raise Bank Scrutiny: Russian oil firms face delays of up to several months to be paid for crude and fuel as banks in China, Turkey and the United Arab Emirates (UAE) become more wary of US secondary sanctions. Several banks in China, the UAE and Turkey have boosted their sanctions compliance requirements in recent weeks, resulting in delays or even the rejection of money transfers to Moscow. The banks started to ask their clients to provide written guarantees that no person or entity from the US SDN (Special Designated Nationals) list is involved in a deal or is a beneficiary of a payment. Read more >>
• Gazprom's Unit Buys Former Shell Stake in Sakhalin Energy for $1 Billion: Kremlin-controlled energy giant Gazprom, opens new tab by acquiring a 27.5% stake, formerly owned by Shell, in Russian liquefied natural gas (LNG) producer Sakhalin Energy for around $1 billion, according to a government order. The government also officially nullified its order a year ago on selling the stake to Gazprom's rival, Novatek without explanation. Read more >>
• Indian Refiners Buy More US Crude as Russia Sanctions Tighten: More than 250,000 barrels per day of US crude is set to arrive in India next month, the highest in more than a year, ship tracking data showed, amid tighter enforcement of sanctions on Russian crude. India, the world's third-biggest oil importer and consumer, is looking to diversify its oil supplies as fresh US sanctions on Moscow threaten to dent Russian oil sales to India. In February 2024, the US tightened efforts to reduce Russia's oil trade adding sanctions on state-owned shipping firm Sovcomflot and 14 crude oil tankers involved in Russian oil transportation. Read more >>
• China Set for Record Russian Oil Imports in March: China is on track to import a record amount of Russian crude this month, bolstered by large volumes of Sokol oil which have been shunned by India due to concerns over US sanctions. The Asian nation is poised to receive about 1.7 million barrels a day of Russian crude this month. Volumes of Sokol are expected to triple from a month earlier to an all-time high of 379,000 barrels a day. Read more >>
• EU Must Reduce Russian LNG Imports This Year, Energy Chief Says: The European Union is “progressively” putting more pressure on importers of Russian liquefied natural gas to cut purchases this year, according to Energy Commissioner Kadri Simson. The campaign is part of Europe’s push to shift supplies and undermine the financing of President Vladimir Putin’s war machine. While pipeline natural gas flows from Russia fell to record lows after 2022, LNG supplies to the EU rose. EU governments will get a new tool to stop purchases of Russian supplies after a law comes into force in a few weeks that will allow EU states to block such flows without sanctions. Read more >>
• Washington Pressures Austria's Raiffeisen to Drop Russian Tycoon Deal: The United States is pressing Austria's Raiffeisen Bank International, the biggest Western bank in Russia, to drop plans to buy a 1.5 billion euro ($1.6 billion) industrial stake of a Russian tycoon. Raiffeisen is buying the stake in Vienna-based Strabag from a company the construction group identified as controlled by Oleg Deripaska. The bank billed the deal, which is routed via Russia, as a means of unlocking some of the billions of euros stranded in Russia and potentially loosening its ties. Read more >>
• Russia Supplies Oil to North Korea as UN Sanctions Regime Nears ‘Collapse’: The shipments, which began on March 7, are the first documented direct seaborne deliveries from Russia since the UN Security Council — with Moscow’s approval — imposed a strict cap on oil transfers in 2017. The vessels, which are North Korean-flagged and classified as oil products tankers, all visited the same berth operated by a Russian oil company at Vostochny Port, where they appeared to load. Read more >>

V. OTHER NOTABLE DEVELOPMENTS

• Canada Imposes Additional Sanctions against Russia: On March 3, Canada imposed sanctions on six Russian officials, including senior officials and high-ranking employees of Russia's prosecution, judicial, and correctional services over the death of opposition leader, Alexei Navalny.Read more >>
• Australia Issues Additional Sanctions Following Alexei Navalny’s Death in Prison: On March 1, the Australian Government imposed additional targeted financial sanctions and travel bans on three Russian officials linked to the prison where Alexei Navalny died. Read more >>