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UK imposes further wide ranging sanctions on Russia in response to sham referendums

  • United Kingdom
  • Financial services disputes and investigations

03-10-2022

 

On 30 September 2022, Vladimir Putin announced the illegal annexation of the Ukrainian regions of Donetsk, Luhansk, Kherson and Zaporizhzhia following sham referendums.

The UK Government has responded by announcing wide ranging new sanctions including services and goods export bans targeting certain sectors of the Russian economy. The announcement can be found here:

In particular, under the new sanctions Russia will lose access to major western services that Russia depends on, including:

  • IT consultancy
  • architectural services
  • engineering services;
  • advertising services
  • auditing services; and
  • transactional legal advisory services for certain commercial activity.

With respect to the legal services ban specifically, the UK Government has stated:

“Russia is highly dependent on Western countries for legal services with 85% of all legal services being imported from G7 countries – given London is an international legal centre, the UK accounts for 59% of these imports. The new legal advisory measures will cover certain commercial and transactional services and hamper Russia’s businesses’ ability to operate internationally”.

In addition, the UK has announced:

  • bans on the export of nearly 700 goods from the UK to Russia. The list includes goods that are critical for production in Russia’s manufacturing sector;
  • the suspension of the process by which actions taken to manage the orderly failure of Russian banks are recognised under the laws of the UK, in cases where the bank is a sanctioned entity. This will prevent those Russian actions from taking legal effect in the UK and potentially providing economic benefit to the Russian state;
  • the designation of Elvira Nabiullina, the Governor of the Central Bank of the Russian Federation. In connection with this designation, the UK Government has stated explicitly that it does not consider Elvira Nabiullina to own or control the Central Bank of the Russian Federation for the purposes of regulation 7 of the Russia (Sanctions) (EU Exit) Regulations 2019; and
  • the UK continues to work with the G7 to finalise and implement the proposed price cap on Russian oil.

The full scope of the sanctions will become clear once the regulations amending the Russia (Sanctions) (EU Exit) Regulations 2019 are published.