July 4, 2022

Volume XII, Number 185

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UK Issues Sanctions Against Russia Following President Putin’s Attack on Ukraine

On Feb. 24, 2022, Prime Minister Boris Johnson announced a comprehensive package of sanctions targeting Russian entities and individuals following President Vladimir Putin’s invasion of Ukraine. This followed the day after he ordered troops into the so-called “breakaway” republics of Donetsk People’s Republic and the Luhansk People’s Republic and after the UK was criticized for its inadequate response to this incursion.

UK’s First Wave of Russian Sanctions Targeting Banks and Wealthy Individuals

On Feb. 22, 2022, the UK sanctioned five Russian banks and three high-net-worth individuals from Russia. The five banks sanctioned were Rossiya, IS Bank, General Bank, Promsvyazbank and the Black Sea Bank. The three sanctioned individuals were Gennady Timchenko, Igor Rotenberg and Boris Rotenberg, who are also subject to travel bans into the UK. Promsvyazbank has since been sanctioned by the United States as well, and Rossiya, IS Bank, Black Sea Bank, Gennady Timchenko, and Igor and Boris Rotenberg were already sanctioned as Specially Designated Nationals (SDN) in the United States under previous U.S. presidential executive orders. Following these sanctions Prime Minister Johnson added, “This the first tranche, the first barrage of what we are prepared to do and we hold further sanctions at readiness to be deployed alongside the United States and the European Union if the situation escalates still further.”

Following Prime Minister Johnson’s announcement and behind the authority granted by the newly published sanctions regulations (2022 No. 123 Sanctions), the Foreign, Commonwealth & Development Office announced that the UK would additionally sanction Russian parliamentarians who voted to recognize the so-called Donetsk People’s Republic and the Luhansk People’s Republic regions (collectively, the Covered Regions) as independent nations. The government also has confirmed it will bring forward legislation to impose a formal ban on trading of Russian debt, in line with the U.S. measures.

UK’s Second Wave of Russian Sanctions Targeting Russian Finance

On 24 February 2022 Prime Minister Johnson announced in Parliament that the UK would be imposing a much more comprehensive package of sanctions targeting Russian finance. In concert with the United States, the UK announced it would undertake a full asset freeze of the assets of VTB Bank. In addition, the UK will exclude Russian banks from the UK financial system by stopping them from accessing UK sterling and preventing them from clearing financial transactions through the UK. The Prime Minister said that Russian state and private companies will be prevented from raising funds in the UK, they will be prevented from dealing in securities and they will be unable to borrow money in the UK.

There will be limits placed on how much money Russian nationals will be able to deposit in their UK bank accounts. UK sanctions will also be applied to Belarus for its role in the assault on Ukraine. Asset freezes will be imposed on more than 100 new individuals and entities, including ‘all the major manufacturers who support Putin’s war machine’. Aeroflot, Russia’s national airline is being banned from the UK. On top of these financial measures new trade restrictions are to be imposed and stringent export controls similar to those likely to be implemented by the U.S. Government.

Key Takeaways

All companies and organizations engaged in activities involving Russia should quickly assess whether they have activities in or with the abovementioned entities and individuals and the extent to which licenses may be required. Given the fluid situation of the Russia-Ukraine conflict companies and organizations should continue to closely monitor communications/guidance from the Foreign, Commonwealth & Development Office, HM Treasury’s Office of Financial Sanctions Implementation and Prime Minister Johnson. The UK Government’s intention is to significantly undermine the Russian economy.

The new UK measures are part of a multilateral sanctions response that includes measures already announced or currently considered by the United States and EU (including, for example, Germany’s decision to halt the Nord Stream 2 pipeline). 

Given the likelihood of overlapping, but potentially distinct, sanctions regimes imposed by different authorities around the world (for example, the UK, United States, EU, and additional countries) companies and organizations that have dealings in Russia and/or Ukraine should assess all of their business operations there to understand and be poised to respond to whatever collection of sanctions and trade controls may be forthcoming in the coming days and weeks.

©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 55
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About this Author

Of Counsel

Jo Rickards is the Chair of the London office’s White Collar Crime & Investigations Group where she represents a wide range of companies and individuals. Jo is recognised as a leading individual in her practice area advising clients in investigations involving allegations of corruption, cartels, tax and investment fraud and contentious financial services. She has advised directors and companies in the UK and internationally for over 20 years. She represents companies and individuals investigated by the SFO, FCA, CMA and HMRC and those who are subject to mutual legal...

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Kara Bombach, Greenberg Traurig, Washington DC, International Trade and White Collar Defense Attorney
Shareholder

Kara Bombach assists companies to lawfully export goods, technology and services around the globe. She places significant emphasis on helping clients achieve practical, workable solutions to complex regulatory situations arising under anti-corruption and anti-bribery measures (U.S. Foreign Corrupt Practices Act (FCPA) and OECD Convention), export control laws (EAR and ITAR), anti-boycott laws, and special sanctions (embargoes) maintained by the U.S. government (OFAC and other agencies) against various countries (including Iran, Cuba and Sudan), entities and individuals....

202-533-2334
Cyril Brennan, Greenberg Traurig Law Firm, Washington DC, International Trade Law Attorney
Shareholder

Cyril (Cy) Brennan focuses his practice on international trade regulation and compliance, with an emphasis on U.S. export controls and economic sanctions. Cy handles matters regarding the International Traffic in Arms Regulations (ITAR), the Export Administration Regulations (EAR), U.S. sanctions programs administered by the Treasury Department’s Office of Foreign Assets Control (OFAC) and the Department of Commerce’s anti-boycott regulations. In addition, he represents clients before the Committee on Foreign Investment in the United States (CFIUS), and advises clients...

202-533-2342
Sonali Dohale, Greenberg Traurig Law Firm, Washington DC, Environmental and International Trade Law Attorney
Associate

Sonali Dohale focuses her practice on compliance counseling, environmental due diligence and environmental litigation under state and federal statutes. Sonali’s experience at government regulatory agencies and her background in civil and environmental engineering help give her insight into both the legal and technical challenges faced by her clients.

In addition, Sonali assists clients engaged in international trade with a variety of federal regulatory issues, including matters related to the International Traffic in Arms Regulations (ITAR), the...

202-533-2381
Associate

Francisco J. Vélez focuses his practice on international trade regulation with an emphasis on U.S. export controls and economic sanctions. He counsels clients on a range of economic sanctions and export controls issues, including those arising under sanctions programs administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the International Traffic in Arms Regulations (ITAR), and the Export Administration Regulations (EAR).

Francisco played five seasons for the Florida Gator football program. As a Gator...

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