Sanctions Round Up First Quarter 2022

Shearman & Sterling LLP

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2 acted swiftly to address the unprovoked act of aggression in violation of international law, as countries worldwide imposed sweeping sanctions measures. We previously issued notes summarizing and analyzing U.S. sanctions on Russia on February 28, 2022, March 22, 2022, and April 27, along with an accompanying table of key Russian individuals and entities newly designated as subject to the US, EU, and UK sanctions. In short, the new US sanctions include: • Blocking sanctions (i.e. asset freezes and travel bans) on numerous Russian elites and government officials, in addition to almost every major Russian financial institution, as well as defense-related enterprises, Russian online media sites, and other entities; • Sectoral sanctions on certain Russian financial institutions that restrict US persons from transacting in new debt and equity, prohibit US financial institutions from maintaining correspondent and payable- through accounts or conducting transactions with Sberbank, and bar US persons from transactions involving Russia's Central Bank, National Wealth Fund, and Ministry of Finance; • Comprehensive economic embargo on the self-proclaimed Donetsk and Luhansk People's Republics— similar to existing measures on Crimea, which were put in place after Russia's annexation in 2014; and • Trade restrictions on certain sectors of the Russian economy, including oil and gas, high-tech goods, luxury goods, seafood, diamonds, and alcohol, and US banknotes. Already, the coordinated measures by the US and its international partners have pummeled Russia's economy and caused widespread effects globally. The International Monetary Fund, for example, assessed that the sanctions against Russia's Central Bank will restrict its access to international reserves to support its currency, which is currently propped up by inventive protectionist measures. The sweeping sanctions against Russia's largest banks, and the exclusion from the international SWIFT payment network, have prevented Russia from receiving or making payments for exports and imports. Outside of Russia, the crisis has produced rising inflation and upward pricing pressure on energy and commodity prices, and supply disruptions will be acutely felt by those countries with close economic links with Ukraine and Russia. The complex web of financial sanctions and trade restrictions have also presented unprecedented compliance challenges for global companies. Many in-house counsel have conducted comprehensive reviews of enterprise risks arising from connections to Russia and searched for ways to extricate or wind-down existing operations implicated by sanctions measures. Meanwhile, the fluid nature of the conflict and sanctions response has companies preparing for heightened measures against countries who so far have been reluctant to join Western governments' efforts to combat the Putin regime, such as China. US Escalates Sanctions in Response to Reported War Crimes On April 6 and April 7, OFAC significantly escalated sanctions against Russia following reports of atrocities against Ukrainian civilians committed by Russian forces. The latest measures include a new executive order banning US investment in Russia, as well as full-scale blocking sanctions against two of Russia's largest financial institutions, additional Russian elites and their family members, and sanctions against lucrative state-owned enterprises. These measures include: • New Executive Order: President Biden issued a new Executive Order, dated April 6, 2022, titled "Prohibiting New Investment in and Certain Services to the Russian Federation in Response to Continued Russian Federation Aggression." The new E.O. bans all new investment in the Russian Federation by US persons, wherever located, as well as the exportation, re-exportation, sale, or supply, directly or indirectly, from the United States, or by a US person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation. • Expanded Sanctions on Russian Financial Institutions:

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