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EU Joins Global Adoption of New Russia Sanctions Over Ukraine Annexation

Sanctions Latest News

On September 30, 2022, President Vladimir Putin announced the attempted illegal annexation of the Ukrainian regions of Donetsk, Luhansk, Kherson, and Zaporizhzhia. In the wake of the announcement, the Council of the EU has announced the adoption of an eighth package of sanctions against Russia as “proof of our determination to stop Putin’s war machine.”

A coordinated sanctions package 

The package announced on October 6, 2022, includes economic and individual sanctions against Russia. According to the European Commission, the package was “closely coordinated with our international partners” and introduces new EU import bans worth €7 billion to limit Russia’s revenues. 

The agreement also lays the groundwork for the required legal framework to implement a price cap on Russian oil. Proposed by the G7 in September 2022, these measures will prohibit the provision of brokering services or financial assistance related to the maritime transport of Russian crude oil or petroleum products. The Council notes that the price cap will both “drastically reduce the revenues Russia earns from oil” and stabilize global energy prices. 

The EU’s new sanctions package also

  • Bans the provision of crypto-asset wallets, accounts, or custody services to Russian persons and residents, regardless of the total value of those crypto-assets
  • Sanctions entities that have played a role in spreading disinformation about the war 
  • Extends the list of restricted exporting items that may contribute to the development of Russia’s military defense and security sector
  • Bans EU nationals from holding any posts on the governing bodies of certain Russian state-owned or controlled legal persons, entities, or bodies
  • Prohibits providing architectural and engineering services as well as IT consultancy services and legal advisory services to Russia

According to the Council, existing and new restrictions will be applied to all Russian-occupied territories in Ukraine.

UK services sanctions and export bans

The UK’s response to the annexation also introduces new export bans on nearly 700 goods crucial to Russia’s industrial and technological capabilities. Additionally, the UK will prevent Russian access to:

  • IT consultancy services
  • Architectural services
  • Advertising services
  • Engineering services
  • Transactional legal advisory services
  • Auditing services

As of September 29, 2022, the Governor of the Central Bank of the Russian Federation, Elvira Nabiullina, was also added to the UK sanctions list, subjecting them to a travel ban and asset freeze. The decision to designate Nabiullina is due to their involvement in steering the Russian economy through the Russian regime’s war against Ukraine and extending the ruble into the Ukrainian territories annexed by Russia.

Global responses

Outside of Europe, further sanctions, travel restrictions, and financial penalties placed on Russian-backed separatists and senior officials have been imposed. On September 30, the US government announced the imposition of additional Russia sanctions, including the designation of 57 entities and visa restrictions on 910 individuals. On October 2, the Australian government introduced fresh sanctions on 28 Russian entities.

As western regimes grow and evolve, firms will need to closely watch developments and have access to data and systems that respond to changes with speed and agility.

Key takeaways

To keep up with the evolving sanctions landscape, financial institutions must understand their risk environment and legal obligations. Compliance staff should ensure that the policies, procedures, and controls in place reflect those realities and have the flexibility to be updated as necessary. Sanctions regimes are constantly changing, and ensuring a firm takes an appropriate response is an ongoing responsibility. 

The Evolving Use of Sanctions

From the war in Ukraine to Afghanistan and Myanmar, learn about key regimes, geopolitical trends, and sanctions evasion risks.

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Originally published October 7, 2022, updated October 7, 2022

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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