US EU and UK target Russia with new sanctions as Ukraine invasion escalates

Since late February 2022, the United States (U.S.), the European Union (EU) and its member states, the United Kingdom (U.K.), and many others—including Japan, Australia, New Zealand, Taiwan and Canada—have imposed sweeping new sanctions on Russia in response to its invasion of Ukraine.

This note updates and consolidates our February 28 publication. It summarizes the most significant new sanctions coming out of the U.S., EU and U.K., as they stood at midnight on March 22, 2022. In addition, it annexes a table of key individuals and entities newly named as being subject to the 2022 U.S., EU and U.K. sanctions.

As a reaction to these sanctions, the Russian government has announced a number of retaliatory sanctions, including foreign currency restrictions and measures targeting foreign businesses in Russia.

The landscape is changing rapidly. We are tracking these developments and may provide further updates as the situation evolves.

Prior to Russia’s invasion of Ukraine, named Russian persons and businesses were already subject to wide-ranging international sanctions, linked to Russia’s annexation of Crimea and other events. Since late February, increasingly intensive rounds of international sanctions have been imposed as the conflict in Ukraine has escalated.

G7 countries removed key Russian banks from using the secure financial messaging system operated by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and imposed sanctions on the Russian Central Bank, designed to significantly restrict the bank’s access to its foreign currency reserves. The G7 have also committed to taking action to deny Russia its most-favored-nation status at the World Trade Organization and continue a campaign of pressure through targeted sanctions and additional trade restrictions of key goods and technology.

The global sanctions range from directly targeting the assets of Russian financial institutions, online media outlets linked to the Russian government disinformation campaign, corporations and individuals to extending restrictions on certain categories of transactions, investment or trade with Russia. The U.S. has banned imports of oil and gas from Russia, and the EU and U.K. have announced plans to substantially reduce their imports. New trade controls on imports and exports of certain categories of goods and a comprehensive trade and investment embargo on the self-proclaimed Donetsk and Luhansk People’s Republics (respectively, DNR and LNR) have also been implemented. Several countries have announced restrictions on the operations of Russian flights in their airspace, and many have implemented travel bans on sanctioned individuals. Many jurisdictions have also targeted Belarusian individuals and entities and/or trade with Belarus in response to Belarus’ support for the Russian campaign against Ukraine.

Key Takeaways

  • The sanctions related to Russia’s invasion of Ukraine are multi-faceted and at times complex and far-reaching, with potential implications for any business operating in the global economy, even those with no immediate or direct ties to Russia, Belarus or Ukraine.
  • Corporates and financial institutions should conduct a risk assessment to determine if and how these sanctions may impact their operations and business relationships. Businesses and individuals with any links to Russia, Belarus or Ukraine should draw up a list of their connections with Russia and be vigilant as new sanctions are introduced or developed.
  • Any necessary corrective action should be taken in time to meet applicable deadlines or permissible wind-down measures. Companies should review and update their compliance policies and procedures to effectively mitigate against new sanctions, AML and anti-corruption risks.
  • Legal advice should be sought in complex cases as the impact of these sanctions is unavoidably a fact-specific inquiry and will be dependent on the specific details of the transactions and circumstances in question. These sanctions as a whole contain few generally applicable rules, and do not necessarily apply in the same way or to the same entities in each jurisdiction.

US Sanctions

The U.S. sanctions regime consists of a number of sanctions programs with a combination of country-wide, sectoral, targeted and secondary sanctions. The sanctions program related to Russia and Ukraine is implemented primarily by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC)—along with the State Department and Commerce Department’s Bureau of Industry and Security (BIS)—pursuant to Executive Orders (EOs) issued by the President and legislation passed by Congress. OFAC has laid out additional measures in response to the Russian invasion of Ukraine in a series of new directives with certain wind-down periods and exceptions authorized through general licenses.

The U.S. sanctions regime is binding on all U.S. persons, including all U.S. citizens and permanent resident aliens regardless of their location, all persons and entities within the United States and all U.S.-incorporated entities and their foreign branches. Non-U.S. persons may also be exposed to secondary sanctions risk if they transact with individuals or entities subject to sanctions—including, if they materially assist, sponsor, or provide financial, material, or technological support for, or goods or services to or in support of, certain activities, a person whose property and interests in property are blocked. Non-U.S. persons may also expose themselves to liability if they “cause” a violation of U.S. sanctions by unlawfully introducing some U.S. nexus to a prohibited transaction. Violations of U.S. sanctions can lead to significant criminal or civil penalties.

The table annexed to this note lists key entities and individuals named in 2022 as being subject to U.S. (as well as EU and U.K.) sanctions.

The new U.S. sanctions implemented in response to Russia’s invasion of Ukraine as of March 21, 2022 include:

  • Specially Designated Nationals (SDNs) designations. The U.S. administers blocking sanctions through the publication of a list of Specially Designated Nationals and Blocked Persons with whom transactions are prohibited. U.S. persons are prohibited from all direct and indirect dealings with SDNs and must block (i.e., freeze) any property in their possession in which such individuals or entities have any interest.[1] Additionally, individuals on the SDN list are subject to travel restrictions. Recent U.S. designations include:
    • Major Russian financial institutions, along with several board members;
    • Defense-related enterprises;
    • Russian President Vladimir Putin;
    • Russian government officials, including Foreign Minister Sergei Lavrov, Defense Minister Sergei Shoigu, and Kremlin Press Secretary Dmitry Peskov;
    • Members of the Russian Duma;
    • Russian business and political elites, along with certain family members;
    • Nord Stream 2, along with corporate officers;
    • Russian online media sites, along with several of their employees determined to be linked to Russian government efforts to promote disinformation; and
    • Individuals with links to the DNR or LNR.
  • Comprehensive Embargo on the DNR and LNR. These sanctions are similar to the 2014 sanctions imposed on the Crimea region following Russia’s incursions there and effectively prohibit nearly all U.S.-nexus trade with the DNR and LNR, along with any other regions of Ukraine that may be later added by the Secretary of the Treasury, in consultation with the Secretary of State (the “Covered Regions”). The sanctions under EO 14065 prohibit (1) new investment by a U.S. person in the Covered Regions, (2) the import into the U.S. of any goods, services or technology from the Covered Regions, (3) the export from the U.S. or by a U.S. person of any goods, services or technology to the Covered Regions and (4) U.S. persons from financing, facilitating or guaranteeing transactions that U.S. persons would be prohibited from engaging in directly.
  • Trade restrictions. In addition to the comprehensive trade embargo in place on the DNR and LNR, the U.S. imposed new trade restrictions on a number of segments of the Russian economy:
    • Oil and gas. Issued on March 8, EO 14066 bans the import of Russian oil, liquified natural gas and coal into the United States. BIS also extended existing export control restrictions—initially imposed in 2014 in response to the Russian annexation of Crimea—that target Russia’s access to oil and gas refinery equipment;
    • High-tech goods. BIS announced new restrictions on exports from the U.S. and on foreign items using U.S. equipment, software and blueprints to Russia of high-tech goods, including semiconductors, computers, telecommunications, information security equipment, lasers and sensors; 
    • Luxury goods. Exports of luxury goods, including certain spirits, tobacco products, clothing items, jewelry, vehicles and antique goods, from the U.S. into Russia are prohibited pursuant to EO 14068;
    • Seafood, diamonds and alcohol. Certain imports of Russian seafood, non-industrial diamonds, alcohol and any other products later designated are prohibited pursuant to EO 14068; and
    • U.S. banknotes. Exports from the U.S. into Russia of U.S. banknotes are prohibited pursuant to EO 14068.
  • Financial restrictions.
    • Russian sovereign debt restrictionsDirective 1A under EO 14024 prohibits U.S. financial institutions from dealing in the secondary market for ruble or non-ruble denominated bonds issued by Russia’s Central Bank, National Wealth Fund and Ministry of Finance. While U.S. financial institutions were previously banned from participation in the primary market for new debt issued by these entities, the restrictions now apply to secondary market trading activities for bonds issued after March 1, 2022;
    • Correspondent and payable-through account restrictionsDirective 2 under EO 14024 imposes correspondent and payable-through account restrictions (CAPTA) restrictions on the Public Joint Stock Company Sberbank of Russia and its foreign financial institution subsidiaries (listed in Annex 1 to the Russia-related CAPTA Directive). These sanctions require U.S. financial institutions to close, before March 26, 2022, any correspondent and payable-through accounts and reject future transactions involving Sberbank and its subsidiaries;
    • New debt and equity restrictions. Similar to previous Directives imposing sectoral sanctions related to Ukraine, Directive 3 under EO 14024 prohibits U.S. persons from all transactions in, provisions of financing for, and other dealings in new debt of longer than 14 days maturity and new equity issued by listed entities on or after March 26, 2022. OFAC may also add additional entities under Directive 3. Newly added entities will be subject to prohibitions on new debt and equity 30 days after OFAC makes its determinations; and
    • Restrictions on transactions with Russia’s Central Bank, National Wealth Fund and Finance MinistryDirective 4 under EO 14024 prohibits U.S. persons from engaging in any transactions involving Russia’s Central Bank, National Wealth Fund and Ministry of Finance, including any transfer of assets to or foreign exchange transaction for or on behalf of these entities. Directive 4 was implemented in accordance with the joint announcement on February 26, 2022 with the European Commission, France, Germany, Italy, the U.K. and Canada. The effective result is that any assets of these entities that are held in U.S. financial institutions are immediately frozen, and financial institutions outside the U.S. that hold U.S. dollars for these entities will be unable to disburse those funds.
  • Airspace restrictions. On March 1, 2022, the U.S. announced that it would block all Russian aircrafts and airlines from entering U.S. airspace. The move came after Europe and Canada imposed similar restrictions.

The U.S. has also imposed sanctions on Belarus for its role in supporting the Russian invasion. BIS imposed restrictions, similar to those placed on Russia, on the exports of high-tech goods and luxury goods to Belarus. OFAC also designated several Belarusian individuals for their support of the Russian invasion of Ukraine.

In addition to new sanctions, OFAC has issued a number of general licenses that authorize transactions otherwise prohibited by U.S. sanctions. These include wind-down periods for some restrictions and exceptions for certain categories of transactions or with certain individuals or entities.

U.S. President Biden has indicated that the U.S. will take steps in accordance with other G7 nations to deny Russia of its most-favored-nation trade status—a move that would require Congressional action.

Proposed legislation in Congress would build upon the current measures. If adopted into law, a bill passed by the House of Representatives on March 17 would authorize the President to increase tariffs on products of Russia and Belarus until January 1, 2024, seek suspension of Russia’s participation in the WTO and provide the President the authority to restore normal trade relations if aggression against Ukraine ceases. Similarly, a separate bill, passed by the House on March 9, proposes to suspend the import of Russian oil and energy products into the U.S., direct the U.S. Trade Representative to take steps to curb Russia’s access to the World Trade Organization and reauthorize the Magnitsky Act, which provides the authority for the U.S. to sanction any foreign person deemed by the President to be complicit in serious human rights abuses. Separate proposals for legislation are also circulating in the Senate, including bills that would similarly limit trade relations with Russia and Belarus, apply secondary sanctions to certain individuals transacting in Russian gold and that would target sanctions evasion through cryptocurrency by Russia.

EU Sanctions

In the EU, decisions on the adoption of sanctions are taken by the Council of the European Union on the basis of proposals from the High Representative of the Union for Foreign Affairs & Security Policy. The High Representative together with the European Commission seek to give effect to these decisions by submitting joint proposals for Council regulations, which are then adopted by the Council. The Commission also oversees member-state implementation of EU sanctions regimes. 

In addition, member states of the EU are permitted to introduce their own sanctions regimes against third countries. Several EU sanctions have involved or been presaged by similar actions by particular EU member states, notably those concerning the prohibition of Russian aircraft or the use of airspace. The SWIFT sanctions have also been imposed via groups of EU member states and other countries acting together.

The territorial scope of the EU’s Russian sanctions is broad. The sanctions typically apply: (1) within the territory of the EU, including its airspace; (2) on board any aircraft or vessel under the jurisdiction of an EU member state; (3) to EU nationals, wherever they are located; (4) to any legal entity incorporated under the law of an EU member state, whether that entity is situated inside or outside the EU; and (5) to any legal entity in respect of business done in whole or in part within the EU

The table annexed to this note lists key entities and individuals named in 2022 as being subject to EU (as well as U.S. and U.K.) sanctions.

EU sanctions against Russia include the following categories of measures:

  • Asset freezes, prohibiting the provision of funds or economic resources to sanctioned individuals (who are named in Annexes to the relevant implementing legislation and listed on the EU’s consolidated financial sanctions list, accessible here (individual accounts must be set up to gain access)).
  • Financial services restrictions:
    • prohibiting dealings in transferable securities[2] and money-market instruments issued by sanctioned entities, as well as other categories of related entity (e.g., non-EU entities that are more than 50 percent owned by the sanctioned entity). The prohibition also applies to certain securities and instruments issued by the Russian government and Russian Central Bank;
    • restricting sanctioned entities’ ability to access EU capital markets;
    • banning the listing and provision of services in relation to the shares of Russian or Belarusian State-owned entities on EU trading venues;
    • significantly limiting financial inflows from Russia or Belarus to the EU by prohibiting: (1) the acceptance of deposits exceeding certain values from Russian nationals or residents; (2) the holding of Russian-client accounts by EU central securities depositories; as well as (3) the selling of Euro-denominated banknotes or securities to Russian or Belarusian clients;
    • prohibiting investment or participation in projects co-financed by the Russian Direct Investment Fund, as well as transactions related to the management of assets and reserves of the Russian Central Bank and the Belarusian Central Bank;
    • prohibiting use of SWIFT by specified Russian and Belarusian entities; and
    • prohibiting the provision of credit rating services to Russian individuals or entities.
  • Trade restrictions on a range of goods, including dual-use goods and technology and related services.
  • Media restrictions, restricting access to Russian state-owned media, including RT (Russia Today) and Sputnik News.
  • Diplomatic measures, such as prohibiting Russian diplomats and other officials from benefiting from visa facilitation provisions.

A range of exemptions exist, including to permit member states to release frozen funds or resources in certain limited circumstances, such as where necessary to satisfy basic needs such as foodstuffs or medicines or for payment of reasonable professional fees.

Penalties for breaches of EU sanctions are imposed and enforced at a member state level. The European Commission monitors enforcement of sanctions by member states and can launch an infringement procedure against a member state it perceives has failed to comply with its EU law obligations.

UK Sanctions

The U.K. has historically operated its own sanctions regime, which was distinct from, and often more far-reaching than, that of the EU. The U.K.’s overarching domestic sanctions regime is established under the Sanctions and Anti-Money Laundering Act 2018, which grants the U.K. government wide-ranging powers to introduce and enforce new sanctions.

U.K. sanctions are binding on both individuals and legal entities within (or undertaking activities in) the U.K., as well as U.K. persons (U.K. nationals and entities incorporated under the law of the U.K.) wherever they may be in the world (“U.K. Persons”). They include financial sanctions, described in further detail below, as well as trade, immigration and aircraft and shipping sanctions. Some financial sanctions (e.g., investment bans and asset freezes) are also targeted at categories of firms or individuals which are not specifically designated but should be considered in addition to those named on the U.K. sanctions lists.

The table annexed to this note lists key entities and individuals named in 2022 as being subject to U.K. (as well as U.S. and EU) sanctions. This table does not include entities and individuals falling within generic categories of sanctions (e.g., U.K.-incorporated subsidiaries of Russian entities subject to an investment ban). You can search more generally for financial sanctions applicable to a particular entity or individual using the U.K. government’s consolidated list search tool.

The relevant U.K. financial sanctions in place as of March 21, 2022 include:

  • Asset freezes, which prohibit U.K. Persons from dealing with assets belonging, or making funds or other assets or economic resources available, to the relevant individuals and entities (or entities they own or control), or engaging in actions that circumvent those prohibitions. The full and current list of sanctioned persons (including those sanctioned prior to February 2022) under the U.K. sanctions regime can be found here. The asset freezes also apply to entities owned or controlled by a designated person, even though these entities may not be designated in their own right and so may not appear on the list of designated entities.
  • Travel bans on all the individuals subject to a U.K. asset freeze (except President Putin and Foreign Minister Lavrov), preventing them from leaving or remaining in the U.K. from the date they are designated as a sanctioned person.
  • Investment bans, namely:
    • against key Russian industries previously targeted in response to Russia’s annexation of Crimea in 2014, covering 11 Russian entities. The list of these entities can be found here. The bans are designed to inhibit access to investment for strategic Russian industries, such as oil and gas. U.K. Persons are prohibited from dealing in certain securities issued by those 11 entities since 2014, or issued by U.K.-incorporated entities they own or control on or after March 1, 2022, including by providing investment services relating to such securities;
    • against key Russian state institutions as well as any persons owned or controlled by, or acting on behalf of, those institutions. The restrictions prevent U.K. Persons from dealing in or offering financial and brokering services in respect of securities issued by those entities on or after March 1, 2022;
    • against persons connected with Russia (i.e., persons located, ordinarily resident, incorporated, constituted or domiciled in Russia), preventing U.K. Persons from dealing in certain securities issued by such persons (or entities they own or control) on or after March 1, 2022, including by providing investment services relating to such securities; and
    • in respect of Crimea, relating to Russia’s annexation of Crimea in 2014, prohibiting investment in land or commercial opportunities in the region.
  • Financial services restrictions, namely:
    • loan and credit arrangements: a prohibition on entering such arrangements with: (1) a maturity of more than 30 days with certain sanctioned entities (and entities they own); (2) a maturity of more than 30 days with persons connected with Russia (and entities they own); or (3) any maturity with the Russian government;
    • correspondent banking relationships: a prohibition on such relationships between U.K. credit or financial institutions and designated persons (currently only Sberbank) or any other financial institutions owned or controlled by such persons; and
    • foreign exchange reserves and asset management: a prohibition on provision of financial services related to key Russian state institutions, as well as any persons owned or controlled by, or acting on behalf of, such persons.

The U.K. government has also announced that it will no longer issue any new guarantees, loans or insurance for exports to Russia and Belarus.

Other sanctions measures imposed by the U.K. include an airspace restriction preventing all Russian air traffic from operating in U.K. airspace, maritime restrictionstrade restrictions on a wide range of military, dual-use (i.e., with both civilian and military applications) and other ‘critical-industry’ goods and technology and restrictions on insurance services. The U.K. has also supported international moves to ban Russian banks from SWIFT.

General licenses can be granted by the U.K. Office of Financial Sanctions Implementation, which permit the conduct of activities for a limited period of time that would otherwise be prohibited by the sanctions. These are intended to allow firms to wind down their transactions and affairs with sanctioned entities and individuals in an orderly way.

Specific licenses may be issued in respect of investment bans or financial services restrictions, permitting activities that would otherwise breach sanctions e.g., for humanitarian assistance, activities conducted by or on behalf of financial regulators for the purposes of their regulatory functions, actions taken to protect U.K. financial stability and anything done to deal with an “extraordinary situation.”

Certain firms, including those with permission to conduct regulated activities in the U.K., must notify HM Treasury as soon as possible if, based on information gleaned while conducting their business, they know or have reasonable cause to suspect that a person is a designated person or has committed an offence by breaching the financial sanctions. If the designated person is a customer of the firm, it should also state the nature and amount of funds or economic resources held by it at the time it came to suspect the designated person.

Certain other measures have been announced by the U.K. government but are yet to enter into force. These include limits on the level of deposits Russian nationals may hold in U.K. banks (expected to be set at £50,000). The U.K. government also plans to fast-track measures to increase transparency in U.K. property markets and businesses, phase out imports of Russian oil by the U.K. by the end of 2022 and reduce the U.K.’s dependence on Russian gas.

Multilateral Measures

On February 26, 2022, a joint statement by the U.S., EU, U.K., France, Germany, Italy and Canada condemned Russia’s attack on Ukraine. The states committed to implement certain measures, including preventing certain Russian banks from using the SWIFT messaging system, restrictions on the deployment of international reserves by the Russian Central Bank and creation of a transatlantic task force to identify and freeze assets of sanctioned individuals and companies held within each nation’s jurisdiction. Seven Russian entities (together with their designated Russia-based subsidiaries) were removed from SWIFT on March 12, 2022 and three Belarusian entities will be removed on March 20, 2022.

Blocking selected Russian banks from their ability to use the SWIFT system is a rare step, which will affect their ability to operate in the global financial system. The only other countries whose institutions have been blocked previously from SWIFT are Iran and North Korea. 

A G7 joint statement on March 11, 2022 announced additional commitments, including taking action to deny Russia its most-favored-nation status at the World Trade Organization and closing loopholes and methods for evasion, including cryptocurrency.

Russian Countermeasures

The Russian government has introduced a range of measures designed to combat the effect of Western sanctions in Russia and/or to have a retaliatory effect. Some are targeted at “unfriendly” states, a list of which have been drawn up and include the U.S., all EU member states, the U.K., Japan, Canada, Australia and New Zealand. In many cases, the Russian legislation requires further guidance from the Russian Bank to establish the parameters of the sanctions. Key measures adopted include:

  • Foreign currency and asset management measures including:
    • the mandatory sale within specified time periods by Russian residents of 80 percent of foreign currency received from foreign trade contracts under contracts concluded since January 1, 2022. The Russian Central Bank may make certain concessions from this rule e.g., the sale of foreign currency may be permitted within an alternative timeframe and foreign currency proceeds may not need to be sold to the extent that they are used to satisfy obligations under loans made by Russian banks that are denominated in a foreign currency;
    • mandatory prior approval for certain activities involving “unfriendly” states (e.g., granting loans in foreign currency to, or conducting real estate or securities transactions with, residents of “unfriendly” states). This restriction may also apply to persons from “friendly” states in certain circumstances e.g., where the transactions involve securities or real estate acquired from foreign persons from “unfriendly” states after February 22, 2022;
    • a prohibition on taking foreign currency cash or monetary instruments exceeding $10,000 in value out of Russia;
    • debt management mechanism which permits Russian entities, municipalities and residents to service certain debt obligations owed to overseas creditors associated with unfriendly states with the Russian ruble equivalent of any outstanding foreign currency debt that exceeds RUB10 million in value per calendar month via an account opened with a Russian credit institution. A similar mechanism for servicing foreign currency debt obligations in rubles may also apply in relation to debts to foreign creditors not associated with “unfriendly” states in certain circumstances; and
    • granting authority to the Russian Central Bank to set limitations on any amounts prepaid or paid in advance by Russian residents to non-Russian entities and individuals under certain specific contracts.
  • Trade restrictions, including on exports from Russia to particular countries of certain products and raw materials (e.g., technological, telecommunications and medical equipment, vehicles, agricultural machinery and electrical equipment) until December 31, 2022. Some products may be exported to certain countries or regions with a permit.
  • Airspace ban: flights of air carriers from 36 states and territories (primarily European states) have been banned.


[1] The restrictions extend by operation of law under OFAC’s 50 percent rule to any non-listed entities that are majority-owned by a designated SDN.
[2] The definition of “transferable securities” has been expanded to include crypto-assets. See Council Regulation (EU) 2022/262, Article 1 and Council Regulation 2022/394, Article 1.