New sanctions: September 26 – November 3

Starting from September 26, Ukraine’s allies introduced a wide range of sanctions and restrictive measures against the Russian Federation, covering almost all aspects and areas specified in the Yermak-McFaul Working Group Action Plan.

In the energy sector, the EU and Norway laid down the legal framework for the implementation of an oil price cap. However, there is still an active discussion among the G7 countries around the level of price restriction. According to Reuters, the price ceiling is currently being discussed at the level of $ 64-66, which is the historical average price of Russian oil. However, this level is quite high, and therefore will have less effect on limiting the aggressor’s income. Some countries also introduced additional restrictions, in particular: Estonia (introduced a ban on the transportation, import and purchase of natural gas and oil from Russia before the pan-European embargo will come into force), UK (ban on the import of liquefied natural gas from January 1, 2023) and New Zealand (ban on the import of energy products from Russia).

In the financial sector, the US banned the exchange of SDRs of Russia and Belarus and sanctioned 2 manufacturers of dual-use goods. The EU, the UK and Switzerland sanctioned Iranian drone manufacturer Shahed Aviation Industries. As part of the 8th package, the EU imposed a complete ban on the provision of wallets, accounts and custody of crypto assets to Russians. Norway also joined this ban. Financial sanctions were also imposed by Australia and New Zealand. 

The last month was extremely productive in the field of individual sanctions. The United States (+303), the EU (+30), the UK (+8, including the head of the Central Bank of Russia Elvira Nabiulina), New Zealand (+74), Australia (+28), Switzerland (+30), Japan (+58) and Canada (+78) responded to the illegal referendums with a new package of sanctions against officials of the Russian State Duma, the Russian Central Election Commission, Iranian military and persons directly involved in the illegal annexation of Ukrainian territories. In addition, the US Supreme Court refused to lift the sanctions imposed on billionaire Deripaska in 2018.

There have also been developments in the area of secondary sanctions. The EU expanded the criteria for imposing additional sanctions: from now on, sanctions can be applied to individuals or legal entities that facilitate the circumvention of EU sanctions (i.e. laid the ground for the application of secondary sanctions). Also, as a result of the September warnings from the US, the coverage area of the Mir payment system in the countries “friendly” to Russia dropped by 90% (according to Russian media). 

Significant restrictions were imposed on the trade sector, in particular, with the adoption of the 8th EU sanctions package (exposed ban on imports of metallurgical goods, expanded the list of prohibited goods for import (coal, lignite, peat and coke), military and dual-use goods, as well as exports of technologies). Significant sanctions were also imposed by the USA, Canada, New Zealand, the UK and Japan.

Transport sanctions against the aggressor were expanded by the EU’s 8th package in the key of restrictions on related services during transportation when oil prices will be limited.  Norway also introduced new restrictions in the field of fisheries. The news about additional inspections of Russian cars by the Kazakh authorities was atypical.

Pressure on Russian state-owned enterprises and businesses controlled by the Russian government is increasing. The USA, EU, New Zealand, Canada, Switzerland, Japan and Poland imposed sanctions against Russian SOEs (Gosznak, Star Rostec, Kalashnikov Concern). Poland imposed sanctions on Gazprom Export. The EU and Norway banned EU citizens from holding any positions in the governing bodies of Russian companies.

Positive developments have also taken place in the direction of designating the Russian Federation as a state sponsor of terrorism. The relevant decisions were adopted by the parliaments of Estonia, Poland and the Parliamentary Assembly of the Council of Europe. Russia was also banned from participating in ongoing and future FATF projects and meetings of FATF regional bodies.

Link to the document: Yermak-McFaul Working Group on Russian Sanctions Action Plan on Strengthening Sanctions against the Russian Federation, April 19, 2022. Progress Update, November 3 compared to April 19