December 17, 2023

UK imposes additional Russia-related sanctions to limit Russia’s ability to fund Ukraine war

The UK government recently adopted Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2023 and Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2023 to impose further restrictions on goods, technology and sources of funding for Russia’s war against Ukraine.  The new legislation, introduced on December 14, 2023,  includes new trade sanctions designed to enable only the export of low-risk, humanitarian, food, and health-related items from the United Kingdom to Russia.  The sanctions ban the import of Russian diamonds and certain Russian metals, and prohibit the export of a variety of goods that could be used by Russia in a military or industrial capacity.  The sanctions also apply to items found by Ukraine on the battlefield, including machine parts and electronics.  The regulations also introduce new licensing grounds to support UK businesses that choose to divest from Russia; the regulations also broaden the scope of existing sanctions on correspondent banking.  The UK government is also introducing new reporting obligations for designated persons, requiring disclosure of the value and nature of frozen funds or economic resources held in the UK.  These obligations enter into force on December 26, 2023.

On December 14, 2023, the Office of Financial Sanctions Implementation also issued General License INT/2023/4078352 under regulation 64 of the Russia (Sanctions) (EU Exit) Regulations 2019 to temporarily enable the processing of payments that would otherwise breach Regulation 17A(2) following recent amendments to the regulation.  The license enables wind-down transactions received from or via a Newly Designated Bank, from December 15, 2023 to December 22, 2023.  For the avoidance of doubt, the general license also specifies that PJSC Sberbank, or any credit or financial institution that is owned or controlled by PJSC Sberbank, is not a Newly Designated Bank for purposes of this general license.   However the license provides that UK credit or financial institutions may process non-sterling payments from or via Sberbank.

UK Government News Story | Russia (Sanctions) (EU Exit) (Amendment) No. 4) Regulations 2023 | Russia (Sanctions) (EU Exit (Amendment) (No. 5) Regulations 2023 | General License – INT/2023/4078352 | General License – INT/2023/4078352 – Publication Notice