September, 2022 - Update on UK sanctions against Russia

The Russia (Sanctions)(EU Exit)(Amendment)(No.14) Regulations 2022 (“the Regulations”) came into force on 21st July, 2022, introducing further amendments to The Russia (Sanctions)(Exit) Regulations 2019. The purpose of this update is to provide a summary of some of the restrictions introduced by the Regulations that are most relevant to Members. 

Coal and coal products

The Regulations prohibit the import, acquisition, supply or delivery of coal and coal products (as defined in Schedule 3H to the Regulations) which originate or are consigned from Russia.

The prohibitions also extend to the provision of technical assistance, financial services, brokering services or funds (whether directly or indirectly) where the object or effect of those services/funds is the importation or acquisition of coal or coal products with the intention of those products entering the UK.  

The restrictions came into effect on 10th August, 2022.

Oil and oil products

The Regulations introduce prohibitions on the import, acquisition, supply or delivery of oil and oil products (as defined in Schedule 3F to the Regulations) which originate or are consigned from Russia.

Again, the prohibitions extend to the provision of technical assistance, financial services, brokering services or funds (whether directly or indirectly) where the object or effect of those services/funds is the importation or acquisition of oil or oil products with the intention of those products entering the UK.   

An exception applies to the prohibition if the oil/oil products (i) do not originate in Russia, (ii) are not owned by a person connected with Russia and (iii) are only being loaded in, departing from or transiting through Russia. It should be noted that all three requirements need to be met in order for the exception to apply.

The restrictions come into effect on 31st December, 2022.

Energy-related goods and services

The Regulations broaden existing restrictions in respect of energy-related goods. In particular, it is now prohibited to (i) export energy-related goods to Russia or for use in Russia, (ii) make energy-related goods available to a person connected with Russia and (iii) provide technical assistance, financial services and funds, and brokering services relating to energy-related goods. In addition, it is prohibited to directly or indirectly supply or deliver energy-related goods from a third country (meaning not the UK, the Isle of Man or Russia) to a place in Russia.  

The Regulations also expand the restrictions on providing energy-related services (which include drilling, logging and well testing) so that it is now prohibited to provide

these services to all oil and gas exploration and production projects in Russia.

G7 dependency goods and further goods list

The Regulations introduce prohibitions on the export, supply, delivery and making available (directly or indirectly) of certain goods that have been identified as goods that Russia relies upon the G7 countries for supply.  These goods are listed in Schedule E to the Regulations.  It is also prohibited to provide technical assistance, financial services and funds and brokering services in respect of these goods.

Gold

The Regulations prohibit the import of gold from Russia and it is also prohibited to acquire gold which originated in Russia and is located in Russia. In addition, it is prohibited to directly or indirectly supply or deliver gold which originated in Russia from a place in Russia or from a third country (meaning not the UK, the Isle of Man or Russia) to the UK.  It is also prohibited to provide technical assistance, financial assistance and funds and brokering services relating to gold.

Members are reminded that UK sanctions apply to British citizens and British overseas citizens and UK constituted and incorporated entities (even if operating outside the jurisdiction and irrespective of where their activities take place). They also apply to any persons who are within or undertake activities within the UK’s territory.

The sanctions position is constantly changing, and the Sanctions List is regularly updated. As such, it is important that Members undertake thorough due diligence in respect of any contractual counterparts and commercial arrangements involving Russia.

Further information and guidance regarding the UK sanctions relating to Russia can be found on the UK government website.

As always, if Members have any questions in relation to the above issues they are invited to contact the Club for further information.