Major Sanctions Developments
UK Sanctions Seven Prominent Russian Oligarchs. The UK government published details of a full asset freeze and travel ban on seven oligarchs with a collective net worth of around GBP 15 billion (USD 19.8 billion). The individuals include:
- Roman Abramovich, owner of London’s Chelsea FC, stakeholder in steel giant Evraz and Norilsk Nickel, and one of Putin’s closest and most prominent allies;
- Oleg Deripaska, stakeholder in En+ Group and former head of the second-largest aluminum company in the world, Rusal;
- Igor Sechin, one of Putin’s closest associates and the chief executive of oil giant Rosneft;
- Andrey Kostin, president and chairman of VTB Bank, which has been targeted by international sanctions;
- Alexei Miller, CEO of state-owned oil giant Gazprom;
- Nikolai Tokarev, president of Russian state-owned pipeline company Transneft; and
- Dmitri Lebedev, Chairman of the Board of Directors of Bank Rossiya.
The government has published a special set of regulations relating to which activities Abramovich’s Chelsea can continue to undertake, which includes playing matches, to mitigate the impact on the Premier League and the football industry. Deripaska and Miller are already sanctioned by the US, while Tokarev, Sechin, and Kostin are all sanctioned by both the United States and the European Union. All except for Lebedev are included on the so-called “Navalny 35” list—a list of Russia’s most senior officials and oligarchs close to Putin that imprisoned Russian opposition leader Alexey Navalny and the U.S. Congress believe are “primarily responsible for looting the Russian state and repressing human rights in Russia.”
EU Targets More Russian Elites in New Round of Sanctions. The European Council designated 160 individuals with roles in supporting Russia’s military aggression against Ukraine, subjecting them to asset freezes and travel bans. The listed individuals and entities include 14 oligarchs, businessmen, and their family members for their involvement in providing substantial resources to the Russian government. The sanctions also target 146 members of the Russian Federation Council. The European Union’s restrictive measures now apply to a total of 862 individuals and entities.
New Zealand Responds to Ukraine Invasion with New Russia Sanctions Act. The New Zealand Parliament unanimously passed a sanctions bill targeting Russia for its military aggression against Ukraine. The Russia Sanctions Act establishes a sweeping legal framework that enables New Zealand to impose economic sanctions that target specific individuals, companies, assets, and services linked to Russia’s military actions in Ukraine. Foreign Minister Nanaia Mahuta said New Zealand condemns the “brutal and intolerable invasion of Ukraine” by President Vladimir Putin’s regime. The first round of sanctions under the new authority is still under development and is expected to be rolled out soon.
Sanctions Effects and Enforcement
Chinese Smartphone Producers Cutting Shipments to Russia. Chinese smartphone companies Huawei and Xiaomi announced that they will slash shipments to Russia due to the difficulty of selling products for a profit in the wake of the ruble collapse and Russians’ inability to purchase at higher prices. This is despite pressure from Beijing to provide support for Russia following the country’s invasion of Ukraine. Experts reported that the possibility of secondary sanctions being placed on China if the United States believed Beijing was significantly undermining efforts to punish Russia was also a concern.
Putin Orders Ban on Commodity Exports Following International Sanctions. The Russian government banned exports of telecom, medical, auto, agricultural, electrical and tech equipment, among other items, until the end of 2022. On 9 March, President Vladimir Putin issued a decree requesting his cabinet restrict the export of select commodities hours after President Joe Biden announced that the United States would ban imports of Russian oil and the European Union declared that it would aim to cut imports of Russian natural gas by two-thirds in 2022. The UK government also announced that it was phasing out Russian oil imports by the end of 2022 and is exploring options to end Russian gas imports altogether.
Sanctions Outlook
Japan Seeks to Implement Measures in Effort to Prevent Sanctions Evasion Through Cryptocurrencies. Japan will introduce measures to prevent Russian entities from using cryptocurrency to avoid economic sanctions. According to the Financial Services Agency, the government is considering establishing rules to stop cryptocurrency transactions by people subject to economic sanctions. The agency is consulting with the Japan Virtual and Crypto Assets Exchange Association (JVCEA) about future measures. On 7 March, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert advising increased vigilance for potential Russian sanctions evasion attempts—including with respect to convertible virtual currency (CVC).
Multinationals Continuing to Cut Ties with Russia.
On 9 March:
- Carlbserg and Heineken announced they will stop selling beer in Russia.
- Hotel groups Hilton, Hyatt, and Accor limited business on Russia and suspended planned developments.
On 10 March:
- Anglo-Australian mining company Rio Tinto announced it was “terminating all commercial relationships it has with any Russian business.”
- Mars, the maker of M&M’s and Snickers, announced it will suspend new investments in Russia.
- Hitachi, a Japanese industrial company, said it was suspending exports to Russia and pausing manufacturing.
- Philip Morris, the cigarette maker, announced it will reduce production and suspend planned investments in Russia.
