Continuing Legal Developments In Response To The Situation In Ukraine

As anticipated in our recent Commentary " Imposition of Sanctions Measures in Response to the Developing Crisis in Ukraine" and our updating Alert " Further Legal Developments in Response to the Situation in Ukraine," there have been recent developments that have led to the imposition of further international sanctions as well as responsive measures by the Russian Federation.

This Alert summarizes the key developments following our Commentary and our updating Alert, as of March 25.

United States

On March 20, the United States issued a third executive order—Executive Order 13662—which builds upon existing Executive Orders 13660 and 13661. It grants the U.S. Secretary of the Treasury, in consultation with the U.S. Secretary of State, broad authority to target individuals or entities operating in any sector of the Russian Federation economy, including financial services, energy, metals and mining, engineering, and defense.

No individuals or entities appear to have yet been designated pursuant to Executive Order 13662. However, on the same day the United States issued Executive Order 13662, it designated, and thus blocked, 20 individuals as well as the first entity (Bank Rossiya), pursuant to Executive Order 13661. As noted in the general guidance from the U.S. Department of the Treasury's Office of Foreign Assets Control, U.S. persons are also prohibited from dealing with any entity in which a designated person (under the United States sanctions regime) owns, directly or indirectly, a 50 percent or greater interest, regardless of whether the entity itself is specifically designated.

It has been reported that U.S. regulated payment services providers have stopped card and payment services to Bank Rossiya's account holders as a result of these developments. It has also been reported that since March 1, the U.S. Department of Commerce's Bureau of Industry and Security has suspended licensing of exports to Russia. It remains unclear when licensing will recommence.

European Union

The European Union added a further 12 individuals to the list of persons designated under existing Council Regulation No 269/2014 of March 17 by Council Implementing Regulation (EU) No 284/2014. The effect is that the European Union has implemented the same travel restrictions and asset freezes against these 12 persons as reported in our last Alert. This requires, among other matters, that (subject to few limited exceptions), all funds and economic resources belonging to...