New EU sanctions with asset freezes, tightened capital market sanctions and broad trade restrictions; UK asset freezes and details about pending UK legislation

9 min read

Authored by our Global Sanctions, Export Controls and Customs Teams

On 28 February 2022, the European Union ("EU") adopted its third package of sanctions against Russia, imposing asset freezes on various Russian businesspersons active in the oil, banking and finance sectors, while closing off the EU's airspace for Russian air carriers and preventing Russia's Central Bank from accessing its foreign reserves in the EU. Further measures – including the ban of certain Russian banks from SWIFT– are expected shortly. 

This follows the second wave of new EU sanctions adopted on 25 February 2022, which expanded the EU's capital market restrictions to 4 more banks and 8 more companies. The EU has imposed a full ban on export of dual-use items, as well as restrictions on supply of various strategic goods and services, including semiconductors, aircraft, and items used in the oil refinery and high-tech sectors. Also, EU asset freezes now apply to President Putin and Foreign Minister Lavrov. 

On 28 February 2022, the United Kingdom ("UK") announced asset freezes on three additional Russian banks: VEB RF, Bank Otkritie, and PJSC Sovocombank. In a statement to Parliament, the UK Foreign Secretary also provided further details about new legislation to be introduced this week aimed at blocking Russian access to UK financial markets, and banning certain exports to Russia. 


EU Sanctions

Asset freeze and visa restrictions

On 28 February 2022, the EU imposed asset freeze restrictions on 26 individuals and one entity (Sogaz). The sanctioned individuals include Russian businesspersons such as Alisher Usmanov, Gennady Timchenko, Petr Aven, Mikhail Fridman, Igor Sechin and Alexey Mordaschov, along with government officials and media profiles.1

This is in addition to asset freezes imposed on 25 February 2022, which include President Putin and Foreign Minister Lavrov, as well as other government officials and certain Russian and Belarusian individuals.2

As a result, all funds and economic resources in the EU belonging to or controlled by these listed parties must now be frozen. Furthermore, no funds or economic resources may be made available – directly or indirectly (e.g., through companies owned or controlled by them) – to or for their benefit, unless authorized or exempt. 

The EU has also partially suspended its visa agreement with Russia.3

Closure of EU airspace 

As of 28 February 2022, no aircraft operated by any Russian air carrier may land in, take off from or overfly EU territory.4 The ban covers all air carriers that hold a valid Russian operating license, including as a marketing carrier in code-sharing or blocked-space arrangements; restricted aircraft include aircraft owned, chartered or controlled by a Russian person, entity or body. 

Excluded are only emergency landings or overflights, plus certain humanitarian operations. 

Financial restrictions

Since 2014, the EU capital market sanctions5 have prohibited certain dealings in new debt and new equity issued by certain Russian banks and companies and certain affiliates.6 They have been amended significantly, and other measures in the financial sphere have been introduced:7

  • Further restrictions have been imposed on the Central Bank of Russia, with a ban on all transactions related to the management of its reserves and assets;
  • Four additional banks (Alfa Bank, Bank Otkritie, Bank Rossiya and Promsvyazbank) and eight corporations (Almaz-Antey, Kamaz, Novorossiysk Commercial Sea Port, Rostec, Russian Railways, Sevmash, Sovcomflot and United Shipbuilding Corporation) are now subject to the EU capital market sanctions;
  • Dealings in transferable securities or money-market instruments of any maturity issued by these and the previously listed entities will be prohibited and no new loans/credit (of any maturity) can be granted to them (though certain exceptions apply);
  • EU banks generally can no longer accept deposits over EUR 100,000 (in total) from Russian persons, entities or such that are residing in or established in Russia, though limited exceptions – some subject to prior authorisation – apply. EU banks must now moreover regularly report on all such Russian deposits exceeding EUR 100,000;
  • It will be prohibited to provide services on trading venues for the transferable securities of any state-owned legal entity in Russia, and EU central securities depositories may no longer provide services for transferable securities issued after 12 April 2022 to any Russian persons; 
  • In addition, no euro denominated transferable securities issued after 12 April 2022 can be sold to Russian persons or entities, again subject to certain exceptions;8
  • Lastly, it is forbidden to provide public financing or financial assistance for trade with, or investment in, Russia, except for prior binding financing commitments, trade in food or for agricultural, medical or humanitarian purposes. Financing up to EUR 10 million per project is however still allowed to SMEs established in the EU. 

Trade and investment restrictions

Effective on 26 February 2022, existing restrictions on dual-use items and related services have been greatly tightened, and new trade restrictions apply to the aircraft, aerospace, oil refinery and high-tech sectors.9

1. Dual-use and high-tech items

Existing trade restrictions on dual-use items have been extended to a ban on export of all dual-use items, regardless of origin, to any person in Russia or for use in Russia.10 This ban also covers related financing or financial assistance, brokering services, technical assistance (including assembly, testing, training and repair) and other services relating to the manufacture, maintenance and use of such items. 

Exemptions apply (subject to specific notification and authorisation requirements) in certain cases, such as for intergovernmental cooperation, humanitarian purposes or personal use for travel to Russia. Pre-existing contract activities may be permitted under Member State authorisation, to be requested before 1 May 2022. 

Similarly, the EU has imposed an export ban on a wide range of goods and technology considered to contribute to Russia's development of the defence and security sectors, including related assistance/services.11The extensive restrictions cover various items not normally covered by EU dual-use controls but which are covered in the US Commerce Control List; this includes items for the electronics sector (e.g., microprocessors, semiconductors), and information security, sensors, lasers, navigation/avionics, marine and aerospace/propulsion items. 

Similar exemptions and related notification and authorisation requirements generally apply as for dual-use items. However, the EU lists 64 Russian entities, including in the defence, aviation and technology sectors, for which exemptions are only possible under very limited circumstances.12

2. Key oil refinery equipment 

EU sanctions now prohibit the export to Russia of listed goods and technologies suited for use in oil refining (regardless of origin), and related assistance/services, to any person in Russia or for use in Russia. The ban covers, for example, delayed cokers and hydrocracking reactors.13

For execution of contracts concluded before 26 February 2022, the ban only applies as of 27 May 2022. Also, authorisations may be available for human health, safety or environmental reasons.

3. Aviation and aerospace items

Sanctions have been imposed on the Russian aviation industry, which could have far-reaching implications. The EU has imposed an export ban on aircraft and aircraft parts and technology to Russia – regardless of whether the goods are of EU origin – including related assistance/services.14 Notably, for contracts concluded before 26 February 2022, these restrictions will only apply as of 28 March 2022. 

The EU now also prohibits aviation related insurance and re-insurance in relation to Russian aircraft, parts or technology as well as the overhaul, repair, inspection, replacement, modification or defect rectification of an aircraft or component from Russia, with the exception of pre-flight inspections. This could mean that aircraft that relies on such EU technology, services or financing would soon not be able to fly to, from or over Russia. 


UK Sanctions

Asset freezes

Foreign Secretary Liz Truss announced on 28 February 2022 that the Russian banks VEB, Bank Otkritie Financial Corporation PJSC and PJSC Sovocombank were added to the UK's list of designated persons. More asset freezes are likely to come in the near future.

The asset freeze means that all funds and economic resources that are owned, held or controlled by these banks, and that are under UK jurisdiction, must be frozen, and that no funds or economic resources can be made available (directly or indirectly) to or for the benefit of these banks, unless permitted by a licence issued by HM Treasury. 

To come: Further financial sanctions, export controls and other measures 

In addition, the Foreign Secretary provided some further detail on the two new pieces of sanctions legislation that would be laid before Parliament shortly:

  • The first introduces new authority in relation to Russia's financial sector, including powers to prevent:
    • Russian banks from clearing payments in Sterling, expected to target Sberbank. 
    • Russian companies raising debt in the UK and accessing UK capital markets 
  • The second piece of legislation will ban exports to Russia across a range of critical sectors, including high-tech equipment such as micro-electronics, marine, and navigation equipment.

Additionally, the Economic Crime Bill, which will contain reforms over the transparency over ownership of companies and property in UK and strengthen enforcement of financial sanction, will be introduced to Parliament. This will create a register of overseas ownership, a reform of Unexplained Wealth Orders, and will amend financial sanctions legislation to deter and prevent breaches of sanctions. 

It was also announced that further legislation would be introduced in the coming weeks in relation to the Russian occupied territories in the Donbas, further sanctions on Belarus, and limiting Russian deposits in UK banks.

Also, on 28 February, the UK Government issued a statement regarding its intention to target the Russian Central Bank, stating that it will immediately take necessary steps to bring into effect restrictions to prohibit any UK natural or legal persons from undertaking financial transactions involving the Russian Central Bank, the Russian National Wealth Fund, and the Ministry of Finance of the Russian Federation. 

This reiterates one of the measures announced in the joint statement issued by the UK Prime Minister, along with the leaders of the European Commission, France, Germany, Italy, Canada, and the US on 26 February, which also included removing selected Russian banks from SWIFT, measures to limit so-called ‘golden passports'; and a transatlantic task force to identify and freeze the assets of sanctions targets.


1 See Council Implementing Regulation 2022/336.
2 See Council Implementing Regulation 2022/332. In addition, the EU has formally updated the designation criteria through Council Regulation 2022/330.
3 See Council Decision 2022/333
4 See Council Decision 2022/335.
5 See here for latest consolidated version of Regulation 833/2014 (not including the latest amendments).
6 Since 2014, the targeted companies were Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB), Rosselkhozbank, OPK Oboronprom, United Aircraft Corporation, Ural Vagonzavod, Rosneft, Transneft and Gazprom Neft.  
7 See Council Regulation (EU) 2022/334 here as well as Council Regulation 2022/238
8 This restriction also applies to units in collective investment undertakings (UCITs) providing exposure to such securities.
9 See Council Regulation 2022/328
10 Previously, the export ban on dual-use items only targeted military end-use and 9 defence-related companies. 
11 See Annex VII of Council Regulation 2022/328.
12 See Annex IV of Council Regulation 2022/328.
13 See Annex X of Council Regulation 2022/328.
14 See Annex XI of Council Regulation 2022/328.


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