As the second anniversary of the conflict in Ukraine approaches, the United States, the European Union, and the United Kingdom continue to focus on and tighten sanctions against Russia, with a particular emphasis on preventing circumvention and evasion of sanctions. For example, 2023 ended with several significant regulatory developments, including the EU 12th package of sanctions against Russia, discussed in our earlier alert, and new U.S. sanctions-related authority targeting foreign financial institutions (“FFIs”) supporting Russia’s military-industrial base. This update focuses on the latter development, which is a significant development for FFIs that remain engaged in business involving Russia, even if such business is undertaken outside of U.S. jurisdiction.Continue Reading Impact of Recent U.S. Secondary Sanctions Authority Targeting Foreign Financial Institutions Supporting Russia’s Military-Industrial Base
On December 18, 2023, the European Union (the “EU”) imposed a number of new economic and individual restrictive measures in relation to Russia (the “12th Package”).Continue Reading Further EU Sanctions Against Russia: Council Adopts 12th Package
A key feature of the UK’s financial sanctions framework is that not only designated persons (listed on the UK’s Consolidated List) are subject to sanctions, but also entities that are ‘owned or controlled’ by designated persons, even if not themselves listed.Continue Reading The Control Test in the UK’s Sanctions Framework: Recent Developments
On October 23, 2023, the European Commission (the “Commission”) updated its non-binding Frequently-Asked-Questions guidance relating to the EU’s Russia-related sanctions regime (the “FAQs”). Specifically, the Commission provided guidance on the meaning of ‘acting on behalf or at the direction of’ an entity in the context of sanctions targeting state-owned enterprises.Continue Reading European Commission Publishes New Guidance on Scope of Sanctions Prohibitions
In June 2019, PJSC National Bank Trust (the “First Claimant”) and PJSC Bank Otkritie Financial Corporation (the “Second Claimant”) commenced litigation in the English High Court, claiming substantial damages on basis of alleged conspiracies resulting in uncommercial transactions whereby loans were replaced with worthless or near worthless bonds.
Following the designation…
Russian legislative and executive branches have passed new acts further restricting the rights of foreign shareholders of Russian businesses.
First, on July 24, 2023 it was announced that President Putin continued to work on the draft of the Decree that would provide the state with the preemptive right to acquire Russian assets of foreign companies exiting Russia. The draft Decree has not been published yet, but it is understood that the preemptive rights will apply only to (i) the strategic companies specifically listed by the Russian Government, and (ii) the joint stock companies in which the state is also a shareholder. This would be the next step that allows for the nationalization of the businesses of exiting foreign investors.Continue Reading Suspension of Rights of Foreign Shareholders and Grant of Pre-emptive Rights to the State to Acquire Russian Assets of Foreign Companies Exiting Russia
On May 9, 2023, we wrote about Decree of the President of Russia No. 302 that created a framework for nationalization of Russian assets belonging to persons from “unfriendly” states (the “Decree”). At that time the only assets to which nationalization applied were the shares in strategic energy companies Unipro, controlled by the Government of…
On July 7, 2023, the Governmental Commission for Control over Foreign Investments (the “Governmental Commission”) adopted a new set of conditions for exits by investors from “unfriendly” jurisdictions (those that have imposed sanctions against Russia) (the “Decision”). The Decision provides substantial updates of the clearance process with respect to the sale of shares and participatory interests in Russian companies by parties from “unfriendly” jurisdictions, as well as the payment of dividends to such foreign parties.Continue Reading Russian Countermeasures: The Governmental Commission Imposes Additional Conditions on Exits by Investors From Unfriendly Jurisdictions
On June 23, 2023, the European Union published its 11th package of sanctions in relation to Russia. In addition to adding 71 individuals and 33 entities to the list of designated persons which are subject to sanctions, the new package fine-tunes the existing regime, with extensions primarily aimed at combatting circumvention more effectively and…
On May 22, 2023, the President of Russia signed Decree No. 364 (“Decree 364”) On Certain Amendments to Decree of the President of Russia No. 430 dated July 5, 2022 (“Decree 430”) requiring Russian businesses who have issued Eurobonds to issue replacement securities to enable holders whose bonds are held through Russian depositaries to receive payments.Continue Reading Russian Obligors Are Required to Issue Russian Bonds Replacing their Eurobonds