On February 10, 2022, the United Kingdom published new legislation (the “Amendment”) significantly expanding the scope of targets on which the UK government may impose sanctions relating to Russia. The Amendment, which was issued in response to the current situation in Ukraine and takes immediate effect, broadens the designation criteria of the existing Russia (Sanctions) (EU Exit) Regulations 2019. Whereas the existing provisions were limited to persons directly engaged in activities relating to the “destabilisation” of Ukraine, the Amendment further authorizes sanctions against:
- any “Government of Russia-affiliated entity,” defined as entities:
- directly or indirectly owned or controlled by the Russian government;
- in which the Russian government directly or indirectly holds a minority interest;
- that receive or have received financing directly or indirectly from the Russian Direct Investment Fund or the National Wealth Fund; or
- which “otherwise obtain a financial benefit or other material benefit” from the Russian government;
- individuals or entities carrying on business of “economic significance” (which is not further defined) to the Russian government;
- individuals or entities carrying on business in a sector of “strategic significance” to the Russian government, defined as the Russian chemicals, construction, defence, electronics, energy, extractives, financial services, information, communications and digital technology, and transport sectors; and
- individuals or entities that directly or indirectly own or control or work as a director (whether executive or non-executive), trustee, or equivalent of any entity in the above categories.
As before, sanctions imposed under the United Kingdom’s Russia sanctions program include an asset freeze, travel ban (for individuals), prohibition on making funds or economic resources available to or for the benefit of the designated party, and prohibition on dealing with funds or economic resources of the designated party (as well as entities owned or controlled by the designated party).