Last week, the United States, European Union, and numerous allied countries imposed an unprecedented range of economic sanctions and export control restrictions on Russia in response to Vladimir Putin’s “unprovoked and unjustified attack” on Ukraine.
“As a result of Putin’s war of choice, Russia will face immediate and intense pressure on its economy, and massive costs from its isolation from the global financial system, global trade, and cutting-edge technology,” said a statement issued by the White House.
Actions taken immediately by the Biden administration on Feb. 24 included:
- Severing the connection to the U.S. financial system for Russia’s largest financial institution, Sberbank, along with 25 of its subsidiaries.
- Full blocking sanctions on Russia’s second largest financial institution, VTB Bank and 20 of its subsidiaries, along with three other major banks and 34 subsidiaries.
- New debt and equity restrictions on 13 of the most critical major state-owned Russian enterprises and entities.
- Additional full blocking sanctions on Russian elites and their family members:
- Sanctioning 24 Belarusian individuals and entities, including two significant state-owned banks, nine defense firms, and seven regime-connected official and elites.
- Comprehensive restrictions on Russia’s military to strike a blow to Putin’s military and strategic ambitions.
- Russia-wide restrictions to choke off Russia’s import of technological goods critical to a diversified economy and Putin’s ability to project power.
The above actions were additional to sanctions imposed on Feb. 21 by President Biden’s Executive Order 14065, in response to Russia’s recognition of the so-called Donetsk People’s Republic and Luhansk People’s Republic regions of Ukraine as “independent states.”
Following the U.S. lead, Australia, Canada, the European Union, Japan, Switzerland, Singapore, Taiwan, and the United Kingdom have also announced sanctions and other restrictive measures (as outlined here and here, for example) against Russia in response to the Ukraine crisis, including targeted sanctions against Russian individuals and financial institutions, and an import/export ban of goods on the Donetsk and Luhansk regions.
In view of the sweeping nature of the sanctions being imposed by the U.S. and its allies, companies that currently have dealings with Russian entities or individuals are strongly advised to immediately conduct a thorough review of their business agreements to ensure there are no dealings directly or indirectly with designated individuals or entities, and if there is any connection to designated people, promptly seek out appropriate legal advice.
Companies are also encouraged to implement robust sanction compliance measures to screen third parties which may be subject to sanctions and monitor the developing situation to ensure compliance.