On 1 November 2018 the Government of the Russian Federation introduced sanctions against a number of Ukrainian persons with immediate effect.
Who is affected?
The newly introduced measures target (i) 322 individuals and 68 legal entities, listed by the Resolution1, and (ii) entities that are controlled by such listed persons.
The concept of "control" is not defined in Russian sanctions-related legislation. It cannot be excluded that the state authorities may interpret this term arbitrarily.
The sanctions are imposed without time limits and regardless of the country where the controlled organization is registered.
What are the consequences?
The sanctions include the following actions:
- blocking (freezing) of non-cash funds, non-documentary securities and property located on the territory of the Russian Federation;
- ban on transfer of money sent outside Russia.
Who must implement the measures?
The sanctions are mandatory for the state authorities of the Russian Federation, municipal government bodies, as well as entities and individuals that are under the jurisdiction of the Russian Federation.
Currently, Russian law does not set any punishment for non-compliance with the sanctions.
Interested parties should carefully analyze the list of sanctioned persons, as well as the ownership structure and control of their counterparties related to Ukraine, to understand if they are affected by the application of the measures imposed by the Resolution.
Other provisions to be noted
Pursuant to the Resolution, the Ministry of Finance is now responsible for presenting suggestions to the Russian Government on:
- amendments to the list of sanctioned persons;
- issuance of temporary specific licenses for performance of certain operations involving persons on the list;
- repealing the Resolution if Ukraine cancels the restrictive measures implemented against Russian persons.
1. Resolution of the Government of the Russian Federation No. 1300 dated November 1, 2018 "On Measures to Implement Decree of the President of the Russian Federation No. 592, dated October 22, 2018"