Sanctions against Russia: Week in Review – April 2022 – 4 | K2 Integrity

The week in review presents the impact and analysis for the public, private and not-for-profit sectors of our regular reports on the progress of the global sanctions campaign against Russia.

This week, we reviewed recent developments since our latest update on April 22 as the United States (US), European Union (EU) and United Kingdom (UK) continue to lead a global coalition in this sanctions campaign. As the war enters its third month, countries have announced additional sanctions at a slower pace. Nonetheless, K2 Integrity will continue to monitor sanction updates and provide insight into the meaning and potential outcomes of these actions.

Recent developments related to sanctions against Russia

Since the last update, many authorities have taken sanctions-related actions against Russia.

US stocks include:

  • On April 26, Bloomberg reported that the Department of Justice (DOJ) would ask Congress for expanded authority to seize and sell Russian assets in the United States. Speaking at a US Senate committee hearing, Attorney General Merrick Garland said the DOJ would support new legislation that would make it easier to seize targeted Russian assets and pay out a portion of the proceeds from any sale directly to Ukraine. The request for expanded authority is part of an effort by President Joe Biden to provide more assistance to Ukraine.1
  • On April 25, Bloomberg reported that in October 2021, US authorities seized high-end artwork and other items from a US residence belonging to Oleg Deripaska, a close associate of Putin. According to Bloomberg, authorities believe Deripaska, who has been designated as a Specially Designated National by the U.S. Treasury Department and subject to blocking sanctions under Executive Orders 13661 and 13662 since 2018, “evaded U.S. sanctions.” Deripaska is reportedly being investigated by the DOJ’s “KleptoCapture” task force, according to New York federal prosecutor Andrew Adams.2

EU actions include:

  • On April 27, European Commission (EC) President Ursula von der Leyen warned EU energy companies that paying for Russian gas in rubles would be a violation of EU sanctions. The warning follows news that Russia’s Gazprom PJSC has cut gas supplies to Poland and Bulgaria.3
  • On April 26, the Polish government announced it would impose asset freeze sanctions on 50 Russian oligarchs and companies, including Putin cronies Mikhail Fridman and Oleg Deripaska, as well as energy giant Gazprom. In addition, sanctioned persons are prohibited from entering Poland. Polish Interior Minister Mariusz Kaminski noted that sanctioned corporations and elites are “doing real business” in Poland and that the “list will be expanded”.4 These sanctions are based on a new law passed this month by Poland allowing sanctions to be issued by the Polish government independently of EU action.
  • On April 25, The temperature reported that the EU is preparing “smart sanctions” against Russian oil imports. According to EC Executive Vice-President Vladis Dombrovskis, the European Union “is working on a sixth sanctions package and one of the issues we are considering is some form of oil embargo. When we impose sanctions, we must do so in a way that maximizes pressure on Russia while minimizing collateral damage on ourselves.5 EU foreign affairs chief Josep Borrell told the newspaper Die Welt that the EU “does not have a unified position” on the issue of an energy embargo. He added that the Russian energy embargo will be discussed at the next EU summit scheduled for the end of May, and that he did not expect any decision on it by then.6

UK actions include:

  • On April 25, the British government removed all customs duties covered by the existing Free Trade Agreement (FTA) between the United Kingdom and Ukraine and imposed additional trade sanctions on the Russian government. Among other measures, the British government will scrap quotas under the FTA to give Ukraine additional economic support and provide £1 billion ($1.3 billion) in loan guarantees to Ukraine. . Additionally, the UK has imposed an export ban on products and technologies that Russia may use to support its invasion of Ukraine, such as interception and surveillance equipment.7
  • On April 21, the UK government announced it would extend the trade sanctions it had imposed on Russia to include import bans on silver, wood products and high-end products, such as caviar , and would increase import duties on a range of Russian products. and Belarusian products. The move brings total import duties and bans on Russian products to more than £1 billion ($1.3 billion). In addition, the UK government announced it would raise tariffs by 35% on £130 million ($163 million) of Russian and Belarusian goods, including diamonds and rubber.8

Main implications (public, private and not-for-profit sectors)

  • As we enter the tenth week from the date of Russia’s invasion of Ukraine, market participants around the world should continue to proactively assess and strengthen compliance processes to account for recent developments in sanctions. Businesses should consider:
    • Update lists used by sanctions screening platforms to incorporate identifiers not on sanctions lists such as cities located in Donetsk and Lugansk oblasts in Ukraine or entities owned or controlled by subject parties to penalties;
    • Exercise due diligence on transactions that involve red flags associated with Russian sanctions evasion, as outlined in the March 2022 U.S. Treasury Department’s Financial Crime Enforcement Network (FinCEN) guidance to financial institutions; and
    • Train employees on prohibitions and related changes to compliance checks.

These measures serve as essential components of a sanctions compliance program to identify and mitigate potential risks.

  • As the pace of new sanctions has slowed, the US, UK, EU and others will continue to seek opportunities to pressure Russia’s major parties and narrow the range of permitted activities involving the Russia. Such pressure may take the form of new sanctions, but will also depend heavily on the implementation of existing sanctions prohibitions and enforcement against those who evade sanctions in various jurisdictions.
  • Poland’s adoption and immediate enforcement of new laws authorizing sanctions against Russia independent of EU action could lead to more aggressive sanctions measures by Poland in the future. This could push the EU to take a more aggressive stance in imposing new sanctions against Russia or risk undermining the EU’s common sanctions and its broader foreign and security policy, particularly towards Russia. .
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