On 24 February, following the escalation of the conflict in Ukraine a wave of sanctions have been initiated by the US, EU and UK, Japan, Taiwan, Australia and New Zealand. As the conflict continues, the level of sanctions applied are likely to increase.

The sanctions imposed by the UK include amendments to Russia (Sanctions) (EU Exit) Regulations 2019 (the “2019 Regulations”) which were enacted in response to Russia’s annexation of Crimea in 2014. Since the UK’s departure from the EU it operates its own autonomous regime. The statute contained an explanatory note which stated the purpose of the legislation was “to encourage Russia to cease actions destabilising Ukraine or undermining” its territorial integrity.

What are the new UK sanctions?

On 28 February and 1 March, the UK government laid before Parliament, in total, four statutory instruments which all came into force on the latter date. The statutes amend the 2019 Regulations and impose further restrictions on economic activity with Russia.

Financial transactions

The Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations prohibit:

  • Dealing with a transferable security or a money market instrument issued on or after 1 March 2022, regardless of maturity date, to a person “connected with Russia” or the Russian government. The definition of a person connected with Russia includes: individuals ordinarily resident, or located, in Russia; and entities incorporated under Russian law or domiciled there
  • Dealing with a transferrable security or money market instrument issued on or after 1 March 2022, with a maturity date over 30 days, owned by an entity listed in Schedule 2 of the 2019 Regulations. Schedule 2 lists various sanctioned Russian companies, such as VTB Bank, Gazprombank, Vnesheconombank (“VEB”) and United Aircraft Corporation, amongst other names.

  • four new categories of loans:

    • Category 1 - loans which have maturity exceeding 30 days that are issued after 31 December 2021 to an entity listed in Schedule 2, their non-UK subsidiary, or to any entity acting at the direction or on behalf of either of those aforementioned entities;

    • Category 2 - loans which are made or granted on or after 1 March 2022 with maturity exceeding 30 days that are issued to a UK-incorporated subsidiary of an entity listed in Schedule 2;

    • Category 3 - loans which do not fall under any other category and are made on or after 1 March 2022 with over 30 days maturity to an entity “connected with Russia,” as defined previously; and,

    • Category 4 - loans which are made or granted on or after 1 March 2022 to the Government of Russia.

  • UK credit and financial institutions providing specified banking services to a designated person (a person sanctioned by the UK government) or any UK or non-UK entity owned or controlled by such person. This prohibition includes correspondent banking relationships. A list of designated persons can be found on the UK government website.

Ban on goods

The Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2022, prohibits, amongst other things

  • The export to Russia of critical-industry goods and technology,

  • Dual-use goods and technology,

  • Military goods and technology;

  • The provision of technical assistance, armed personnel, financial services or funds or associated brokering services where such provision enables or facilitates the conduct of certain military activities.

Ban on ships

Under the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2022 it is unlawful to provide a ship or access to any port in the United Kingdom to, or register in the UK, a ship owned by a designated person or a party connected to Russia. Russian ships will not have access to ports in the United Kingdom either.

Foreign exchange & asset management

The Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2022 prohibit a UK individual or entity from providing financial services for the purpose of foreign exchange reserve and asset management to

  • The Central Bank of Russia

  • National Wealth Fund of Russia

  • The Russian Ministry of Finance

  • A person owned or controlled directly or indirectly by an of the persons above

  • A person acting on behalf of or at the direction of any of the above persons.

Other measures

A plethora of restrictive measures against Russia have been taken by several countries. On 1 March, for example, the EU, UK, US and Canada banned seven Russian banks from the secure bank messaging platform Society for Worldwide Interbank Financial Telecommunication (SWIFT) which will prevent them from be able to efficiently and quickly transfer funds to other financial institutions.


The 2019 Regulations set out exceptions to some of the sanctions which apply in certain circumstances. An exception applies automatically and does not require a licence.


A designated person or a representative on their behalf my apply for a licence from The Office of Financial Sanctions Implementation (OFSI) to use their funds or economic resources OFSI published a list of these general licenses, seven of which have been granted by HM Treasury in March 2022.

What steps should businesses take to ensure compliance?

The sanctions imposed in the UK are complex and may have wide implications for businesses who are directly or indirectly engaged in business with Russia. In response to the spate of sanctions legislation, businesses should consider:

  1. Undertaking a risk assessment of current contracts, transactions and counterparties to determine the level (if any) exposure under the exiting sanctions;

  2. Undertake an analysis of its contracts, transactions and counterparties to assess the likelihood of any of them being added to the sanctions list in the coming days and weeks;

  3. Consider existing contractual obligations where there is a risk (directly or indirectly) of exposure to Russian sanctions and consider remedies / action to minimise potential liability;

  4. Review and monitor Government guidance regarding Russia sanctions;

  5. Identify if you have Russian clients, customers or counterparties that are subject to sanctions and take appropriate action as required under the sanction’s regime;

  6. Consider if an exemption applies or whether it will be necessary to apply for a licence;

  7. Seek legal advice if you are unsure about any of the above.

The UK Government’s guidance on sanctions can be found here.