U.K. Expands Russian Financial Sanctions

On March 24, 2022, the U.K. added 65 new targets, including several prominent Russian organisations and individuals, to its financial sanctions put in place following the invasion of Ukraine.

The most prominent individual targets to have their assets frozen are:

• ALFA-BANK JSC, described by the Foreign Office as a top 10 bank in Russia and the country’s largest private bank.
• Alrosa, described as the largest diamond mining company in the world.
• Eugene Markovich Shvidler, a billionaire associate of Roman Abramovich, whom the U.K. sanctioned on March 10, 2022.
• Oleg Tinkov, founder of Tinkoff Bank.
• Herman Gref, CEO of Sberbank and a close adviser of Vladimir Putin.
• Oleg E Aksyutin, Deputy Chairman of Gazprom.
• Didier Casimoro, First Vice President of Rosneft.
• Zeljko Runje, Deputy Chairman of Rosneft.
• Galina Danilchenko, installed as “mayor” of Melitopol in Ukraine after the legitimate mayor was kidnapped.
• Polina Kovaleva, stepdaughter of Russian Foreign Minister Sergey Lavrov.

Other targets are described as critical industries supporting the invasion, including:

• Russian Railways.
• Kronshtadt, the leading producer of Russian drones.
• The Wagner Group, reportedly tasked with assassinating President Zelensky.

The new measures are the latest in the series first introduced in late February. We have previously covered the initial round of the U.K.’s financial sanctions and its sanctions of Chelsea Football Club Owner Roman Abramovich.

The U.K. also issued a General Licence on March 22, 2022 allowing the winding down of certain derivatives and similar transactions until May 2, 2022 with

• Central Bank of the Russian Federation
• National Wealth Fund of the Russian Federation and
• Ministry of Finance of the Russian Federation.

The Office of Financial Sanctions Implementation (OFSI) has updated its general guidance on financial sanctions to add new paragraphs on aggregation (para 4.14) saying:

“When making an assessment on ownership and control, OFSI would not simply aggregate different designated persons’ holdings in a company, unless, for example, the shares or rights are subject to a joint arrangement between the designated parties or one party controls the rights of another. Consequently, if each of the designated person’s holdings falls below the 50% threshold in respect of share ownership and there is no evidence of a joint arrangement or that the shares are held jointly, the company would not be directly or indirectly owned by a designated person.

“It should be noted that ownership and control also relates to holding more than 50% of voting rights, the right to appoint or remove a majority of the board of directors and it being reasonable to expect that a designated person would be able in significant respects to ensure that the affairs of a company are conducted in accordance with their wishes. If any of these apply, the company could be controlled by a designated person.”