Ukraine has blocked operation of Russian social media websites and IT companies as part of new economic sanctions against Russia in response to its annexation of Crimea and support for separatists in Eastern Ukraine.

The new sanctions, part of Presidential Decree No. 133/2017 (“the Decree”) signed by President Petro Poroshenko on 15 May and effective from 17 May, enact a decision of the National Security and Defence Council of Ukraine (“NSDC”) of 28 April 2017 “On imposition of personal special economic and other restrictions (sanctions)”. The Decree increases the number of sanctioned Russian companies to 468 from 271 and the number of sanctioned individuals to 1,228 from 682, as well as extends the duration of previously imposed sanctions.

The new round of sanctions targets, inter alia, popular Russian social networks Vkontakte and Odnoklassniki, the search engine Yandex, the email provider Mail.ru, and well-known information technology (IT) companies 1C, ABBYY, Nvision-Ukraine, Parus, Softline Group, Galatiki Center and their Ukrainian subsidiaries. Sanctions were also imposed against Russian TV channels Zvezda, TVC, NTV Plus, RenTV, RBC and others.

Pursuant to the Decree, the sanctions include, inter alia: the blocking of assets via a temporary restriction of the right to use and dispose of property; limitation on trading activity; termination of fulfilment of economic and financial obligations; prevention of capital withdrawal from Ukraine; suspension of licenses and permits; a ban on technology transfer and rights to intellectual property; restriction or termination of the provision of telecommunication services and the use of public telecommunications networks etc. The Decree also obliges Ukrainian Internet providers to block public access to certain Russian social networks and web services.

The new sanctions will be in place for either one or three years, depending on the company. The validity period of sanctions against individuals is one year, three years, five years, or indefinitely.

The Decree has also reinforced restrictions with regard to a number of Russian companies blacklisted by earlier NSDC decisions, including IT companies Dr. Web and Kaspersky Laboratories; TV channels First Channel Worldwide Network, RTR-Planet, Russia-24; the banks Bank of Moscow, Gazprom Bank etc.; and airlines Aeroflot, Gazprom Avia, Donavia etc.

The companies operating in Crimea, e.g., Kerchenska Ferry Crossing State Shipping Company, Kerchenskyi Sea Trade Port State Enterprise, Feodosiiskyi Sea Trade Port State Enterprise, Shipyard “More”, Masandra, have also been added to the sanctions list. These companies are subject to a blocking of assets, limitation of trade operations and other restrictions provided by the Decree.

In March this year, Ukraine imposed sanctions on the following subsidiaries of the Russian banks: Sberbank, VS Bank, Prominvestbank, VTB Bank and BM Bank. These sanctions include a ban on the withdrawal of funds outside of Ukraine; a ban on the payment of dividends and interest; a return of inter-bank deposits and loans; and restrictions on the distribution of profits and capital.