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Further UK and EU sanctions and export controls targeting Russia and Belarus

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UK DEVELOPMENTS

Further designations
On 10 March 2022, the UK Government added a further seven oligarchs to its list of sanctions targets, including the owner of Chelsea football club, Roman Abramovich. This was closely followed on 11 March 2022 by the sanctioning of 386 members of the Russian Duma (comparable sanctions had already been imposed by the EU).

Further aircraft-related sanctions
Airport operators, air traffic controllers and the Secretary of State have been granted new powers to issue directions to Russian aircraft (e.g., to take off, not to take off, and to land) and to suspend and revoke permissions needed to operate. The new provisions also allow the detention and movement of Russian aircraft and prohibit a person from providing aircraft insurance or reinsurance services to a person connected with Russia or where the aircraft is for use in Russia.

Under the regulation, a “Russian aircraft” is a Russian-registered aircraft, or one that is owned, chartered or operated by a person subject to UK sanctions, or who is otherwise connected with Russia. A person “connected with Russia” includes individuals who are ordinarily resident in Russia, or located in Russia, as well as entities that are incorporated under the laws of Russia or domiciled in Russia.

Criminal offences are committed by operators and/or pilots of Russian aircraft that fail to comply with directions issued, or otherwise overfly, or land on, the UK without authorization.

New general licenses
There have been a number of new general licenses issued by the Office of Financial Sanctions Implementation (OFSI). These include:

  • A general license that permits the winding down of activities relating to Sberbank until April 3, 2022;
  • A general license that permits the winding down of activities relating to Bank Otkritie, Promsvyazbank, Bank Rossiya, Sovcombank, Vnesheconombank (VEB), and Novikombank until April 3, 2022;
  • A general license that allows for the provision of aeronautical information publication data by Belaeronavigatsia (the state owned air navigation service in Belarus which has been under UK and EU sanctions since the June grounding of a Ryanair flight to Minsk in Belarus that allowed for the arrest of a journalist and his companion) to air traffic management services and data providers in the UK (and a corresponding payment for such services); and
  • A general license relating to the continued operation of Chelsea Football Club following the designation of its owner, Roman Abramovich.

A general trade license has also been issued by the Department for International Trade in relation to the provision of insurance or reinsurance services to Russian aircraft, allowing for providers to wind down activities until March 28, 2022, in certain circumstances.

In a further development, Belarus has now been removed from nine open general export licenses.

Phase-out of Russian oil
The UK Business Secretary announced that the UK will phase out imports of Russian oil by the end of the year.

Economic Crime Bill
The Economic Crime Bill (which includes provisions intended to make implementing sanctions against individuals easier and less risky for the Government if challenged) has passed through the UK House of Commons and is now progressing through the House of Lords. If passed, amendments added to the Bill would permit persons to be sanctioned in an “urgent procedure” where they are subject to similar sanctions in the U.S., EU, or other specified jurisdictions.

The draft Bill also proposes to implement a limit on the amount of damages a court may award if the Government is found to have acted in bad faith.

EU developments
On March 9, 2022, the EU passed a number of new amending regulations, imposing additional sanctions on Russia and Belarus. The new measures:

  • Designate a further 160 individuals who are now subject to individual restrictions and asset freezes;
  • Amend the current sanctions on Belarus to bring them in line with those imposed on Russia;
  • Block three Belarussian banks from SWIFT, namely: Belagroprombank, Bank Dabrabyt, and the Development Bank of the Republic of Belarus (as well as their Belarusian subsidiaries);
  • Prohibit transactions relating to the management of reserves or assets of the Central Bank of Belarus; and
  • Restrict the export of maritime navigation and radio communication technology to Russia and restrict the ability of the Russian Maritime Register of Shipping to raise finance.

Notably, the new EU regulations did not include an EU-wide ban on Russian ships docking in Member States’ ports. A number of sources have reported that the EU has proposed implementing such a prohibition but as yet the relevant regulation has not been published.

Further, on March 11, 2022, the President of the European Commission announced that the EU would shortly introduce a further raft of sanctions against Russia, including:

  • Suspending its privileged trade and economic treatment;
  • Prohibitions on the use of cryptoassets to circumvent current measures;
  • Banning exports to Russia of luxury goods; and
  • Banning imports from Russia of iron and steel goods.

The relevant legal instruments relating to the above are yet to be published.

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