May 20, 2022

UK imposes new sanctions on Russian airlines and reports on the impact of financial sanctions on Russia

On May 19, 2022, the UK announced the imposition of new sanctions against Russia’s airline sector.  The sanctions, which were issued under Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855), are aimed at preventing Russian airlines –  Ural Airlines, Rossiya Airlines and Russia’s largest airline Aeroflot – from selling their landing slots at major UK airports, worth up to £50 million according to government estimates.  The sanctions impose asset freezes against the three airlines as part of a concerted effort to disrupt Russian President Vladimir Putin’s ability to fund his war against Ukraine.   

The UK Government also reports that international financial sanctions are having the desired effect on Putin and his war machine after Russia’s own Central Bank admitted that sanctions were affecting supply chains in Russia.  In addition, several weapons manufacturers have had to suspend activities due to a lack of parts, and there was an 80 percent drop in the sale of domestic vehicles in Russia, including military vehicles, due at least in part to a lack of components.  The UK also reports that Russia’s crude oil exports were down 30 percent in April and are expected to fall further as sanctions progress.  Furthermore, while the Kremlin has reportedly managed to stabilize the ruble, forecasts indicate that Russia’s GDP will shrink between 8.5 and 15 percent this year, while the IMF predicts that the Russian economy will shrink an additional 2.3 percent in 2023.

In addition to the airline sanctions, on May 20, 2022 the Office of Financial Sanctions Implementation released a notice regarding amendments made to certain sanctions entries issued under Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855).  While the listed persons are still subject to asset freezes, the amendments provide updated identification information that include changes to their birth dates and names.

UK Government Press Release | OFSI Financial Sanctions Notice – Russian Airlines | OFSI Financial Sanctions Notice – Amendments