The European Council updated various frequently asked questions pages under its Russia sanctions regime. New FAQs on customs-related matters, oblasts, humanitarian aid and circumvention and due diligence were released, adding to the guidance for transactions linked with trade in the Donets, Kherson, Luhansk and Zaporizhzhia regions.
Last year was a “historically busy” period for new trade controls, and that pace “shows few signs of slowing” this year, Gibson Dunn said in a 2022 export control and sanctions recap released this week. The recap provides an overview of last year’s raft of new sanctions and export controls against Russia, China, Iran and others; the Bureau of Industry and Security’s new administrative enforcement policies (see 2206300069 and 2205230018); the State Department’s new compliance program guidelines (see 2212060015 and 2212210049); Committee on Foreign Investment in the U.S. actions; trade restrictions imposed by the EU and U.K.; and more.
The U.S. and the U.K. sanctioned seven members of the Russia-based cybercrime gang Trickbot, the countries announced Feb 9. The restrictions were simultaneously imposed by both countries in the "first wave of new coordinated action against international cyber crime," the U.K.'s Office of Financial Sanctions Implementation said. The designations target Mikhail Iskritskiy, Valentin Karyagin, Vitaliy Kovalev, Maksim Mikhailov, Dmitry Pleshevskiy, Valery Sedletski and Ivan Vakhromeyev.
Despite reports Russia has found ways to evade sanctions and export controls, those trade restrictions are working, experts said during a Feb. 8 panel discussion hosted by the Atlantic Council. At least one official said the sanctions will need continual tuning to remain effective.
Despite the massive sanctions imposed on Russia in the wake of its invasion of Ukraine, the country has seen a 6% increase in capital expenditure, contrasted with initial forecasts of an up to a 20% decline, Bloomberg reported Feb. 8. Russia's response to the sanctions has been to spend its way out, with large and small companies looking to replace foreign equipment and software or funnelling money into building new supply chains to reach new markets. Bloomberg said that while investment has allowed Russia to stave off many of the worst economic effects of the sanctions and export controls, its investment future is much more bleak. Bloomberg Economics predicts that fixed-asset investment will dry up by 5% in 2023. While government and state-owned corporate investment may yet further increase, private sector investment is poised to dip.
The U.K. added eight individuals and seven entities to its Russia sanctions regime, the Office of Financial Sanctions Implementation announced.
The EU removed Dmitry Vladimirovich Ovsyannikov, a former governor of Sevastopol, from its Russia sanctions list, according to a European Council decision published Feb. 7. The governor was removed in line with the EU General Court's ruling removing his designation in October. The designation was renewed in September before judgment was rendered.
The Office of Foreign Assets Control this week published a new Russia-related frequently asked question providing guidance on Russian securities transferring through inheritance. FAQ 1113 explains that investment prohibitions under executive orders 14066, 14068 and 14071 don't prevent securities issued by non-blocked Russian entities from transferring to their beneficiaries as long as those transfers are "part of the ordinary course administration of the decedent’s estate," don't "involve an exchange for value," and "have no other sanctions nexus." Blocked securities in an estate, however, remain blocked and require a specific license from OFAC to transfer.
The EU is readying its 10th package of sanctions against Russia following its invasion of Ukraine, European Commission President Ursula von der Leyen announced in a Feb. 3 statement following the EU-Ukraine summit. Aiming to have the sanctions package imposed by the Feb. 24 one-year anniversary of the war, the EU reportedly will focus on technology that Russia's military could use and on reducing sanctions circumvention.
Vladimir Voronchenko, a Russian citizen and legal permanent resident of the U.S., was charged with participating in a scheme to net over $4 million to maintain four properties in the U.S. owned by sanctioned oligarch Viktor Vekselberg, DOJ announced. Voronchenko also tried to sell two of the properties.