What sanctions are being imposed on Russia as of 02 March 2022?

It is the latest of a wide range of sanctions carried out against Russia by the international community, following the invasion of Ukraine.

Financial sanctions

Western leaders have frozen the assets of Russia’s central bank, limiting its ability to access $630bn in international dollar reserves.

In co-ordination with the US and the EU, the UK government has also banned British people and businesses from making transactions with the Russian central bank, its finance ministry and its wealth fund.

The European Union, US, UK and allies have also agreed to remove selected Russian banks (Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VNESHECONOMBANK (VEB) and VTB BANK) from the Swift messaging system, which enables the smooth transfer of money across borders. The ban will delay the payments Russia gets for exports of oil and gas.

Prohibit the sale supply, transfer or export of euro banknotes to Russia or to any person/entity in Russia (including the Russian government), or for use in Russia. Exceptions related to personal use for those people travelling to Russia and diplomatic mission are available.

Prohibit investment, participation or contribution to projects co-financed by the Russian Direct Investment Fund (RDIF), except where these activities are due under contracts concluded before 2 March 2022.

On 2 March 2022, the EU decided to suspend the broadcasting activities in the EU of the Russian state-owned outlets Sputnik and Russia Today until the aggression against Ukraine is brought to an end and until the Russian Federation and its associated outlets cease conducting disinformation and information manipulation actions. It also introduced a SWIFT ban for seven Russian banks.

Other sanctions in the UK include:

major Russian banks are being excluded from the UK financial system, stopping them from accessing sterling and clearing payments;

all Russian banks will have their assets frozen;

major Russian companies and the state will be stopped from raising finance or borrowing money on UK markets;

a limit will be placed on deposits Russians can make to UK bank accounts;

EU measures have been announced targeting 70% of the Russian banking market and key state-owned firms, including defence firms.

Trade with Russia

The UK, EU, US and other countries have announced curbs on products that can be sent to Russia. These include dual-use goods, which are items that could have both a civilian and military use, like high-tech items, chemicals or lasers.

The EU is aiming to make it impossible for Russia to upgrade its oil refineries with an export ban on certain materials. It is also banning the sale of aircraft and equipment to Russian airlines in an attempt to damage its economy and connectivity.

Germany has put on hold permission for the Nord Stream 2 gas pipeline from Russia to Germany to open.

Targeting individuals

Western governments have imposed sanctions on some individuals, including a “hit list” of powerful, wealthy businessmen and women known as oligarchs.

Also targeted are Russian President Vladimir Putin and his Foreign Minister Sergei Lavrov, whose assets in the US, EU, UK and Canada will be frozen and, in the case of the US, a travel ban imposed.

The EU, UK, US and Canada have launched a transatlantic task force to identify and freeze the assets of sanctioned individuals and companies, targeting more “officials and elites close to the Russian government, as well as their families”.

The UK is limiting the sale of citizenship via “golden passports”, which have allowed wealthy Russians to become citizens.

Travel

The US has banned all Russian flights from its airspace, taking effect from the end of 2 March.

The measure was announced by President Biden, and follows similar bans by Canada, the EU and the UK.

Belarus is also facing fresh sanctions on top of those imposed after its disputed election in 2020.

The EU has pledged to stop exports by Belarus’ “most important sectors”, including tobacco, wood and cement. It is also introducing the same dual-use restrictions that it imposed on Russia.

The US has sanctioned a number of Belarusian individuals and entities, including state-owned banks and defence companies. UK Prime Minister Boris Johnson has also promised sanctions on Belarus for its role in the invasion.

Other measures in the UK

The government is introducing a ‘Register of Overseas Entities’ to crack down on foreign criminals using UK property to launder money.

The new register will require anonymous foreign owners of UK property to reveal their real identities to ensure criminals cannot hide behind secretive chains of shell companies, setting a global standard for transparency.

This measure forms part of the government’s strategy to combat economic crime, while ensuring legitimate businesses continue to see the UK as a great place to invest. An overseas entity will be required to identify its beneficial owner(s) and to register them with Companies House.  Information supplied to the register will be required to be verified. Once registered, an overseas entity ID number will be provided and the entity will be required to update its information annually, until such time as it successfully applies to be removed from the live Register of Overseas Entities.

The measures will apply to foreign owners of UK property. They will apply to:

  • any company or similar legal entity that is governed by the law of a country or territory outside the UK (overseas entity)
  • individuals who have significant influence or control over the entity, e.g. they hold 25% or more of the shares or voting rights (beneficial owners)

The register will apply to property bought by overseas owners up to 20 years ago in England and Wales and from December 2014 for property in Scotland.

The bill will also reform Unexplained Wealth Orders (UWOs) to give law enforcement agencies more time to review case material and to protect them from substantial legal costs if they pursue reasonable cases that are ultimately unsuccessful.

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