July 25, 2022

UK amends Russia-related sanctions to broaden designation criteria and scope of trade-related restrictions

The UK Office of Financial Sanctions Implementation recently expanded the reach of The Russia (Sanctions) (EU Exit) Regulations 2019 by adopting two amendments – The Russia (Sanctions) (EU Exit) (Amendment) (No. 13) Regulations 2022 and The Russia (Sanctions) (EU Exit) (Amendment (No. 14) Regulations 2022.  
Amendment 13, which entered into force on July 18, 2022, broadens the designation criteria for which a person may be added to the UK Sanctions List and provides a humanitarian exception from trade-related sanctions in the non-government controlled areas of Donetsk and Luhansk.  More specifically, the amendment amends regulation 6 of the 2019 regulations to include additional activities for which a person may be designated; expands the scope of those involved in obtaining a benefit from or providing support to the Government of Russia; and enables the UK government to extend designations to include immediate family members.  Amendment 13 also broadens the definition of ownership in relation to ships and aircraft to include the term “owned or controlled directly or indirectly” in order bring into scope ships and aircraft owned via a majority interest in a company.

Amendment 14, which entered into force of July 21, 2022, extends a number of trade restrictions on Russia in an effort to encourage Russia to cease its destabilizing actions against Ukraine.  This amendment builds on trade restrictions already in place and now include prohibitions on items of significant importance to the Russian economy and for which Russia depends upon the UK and G7 partners to receive, also known as the G7 dependences and further goods list.  Amendment 14 also bans the provision of accounting, business and management consulting and public relations services to persons connected to Russia – services that are considered to be key areas of Russian dependence and, in particular, Russian oligarchs.  However, licenses can be obtained in order for these sanctioned goods to be used for humanitarian purposes.

Amendment 14 also expands the scope of existing energy-related prohibitions, a key industry funding Russian military efforts in Ukraine. The amendment extends existing prohibitions to all energy-related goods sent to Russia regardless of their eventual point of use; bans the provision of goods to persons connected with Russia; and any related ancillary services, including technical assistance, financial services and funds and brokering services. There are also new prohibitions on energy-related services such as drilling or well testing in order to prevent these services from being provided on oil and gas exploration and production projects in Russia.

Effective December 31, 2022, Amendment 14 will ban the import and supply of oil and oil products that originate in or are consigned from Russia, and similar bans will go into effect on August 10, 2022 on the import and supply of coal and coal products. As of July 21, 2022, Amendment 14 also bans the import of Russia-origin gold directly from Russia or from third countries as well as any ancillary services related to gold exported from Russia.  It is important to note that these prohibitions do not apply to Russia-origin gold exported before July 21, 2022.

Finally, Amendment 14 authorizes certain aviation-related technical assistance measures that were previously banned by The Russia (Sanctions) (EU) Exit) (Amendment) (No. 7) Regulation 2022.  The authorization applies to Russian aircraft that are temporarily detained at UK airports and suspected of being owned by a designated person.

The Russia (Sanctions) (EU Exit) (Amendment) (No 13) Regulations 2022 | The Russia (Sanctions) (EU Exit) (Amendment) (No 14) Regulations 2022