Newsflash – March 2022
News on the situation in Ukraine are dominating the headlines worldwide. Sanctions have been imposed on Russia by mainly the EU, UK and the US as a sign of disapproval and to advance the goal of conflict resolution.
We set out below the key developments in the sanctions space for your quick read:
The EU announced a set of measures on 23 February 2022 in response to the recognition by Russia of the non-government controlled areas of the Donetsk and Luhansk oblasts in Ukraine as independent entities. The measures include targeted sanctions against 351 members of the Russian State Duma and an additional 27 individuals, and restrictions on Russia’s access to the EU’s capital and financial markets and services. On 25 February 2022, the EU decided to freeze the assets of the President of the Russian Federation and the Minister for Foreign Affairs of the Russian Federation. On 28 February 2022, a further round of measures were announced, including a ban on transactions with the Russian Central Bank, a ban on the overflight of EU airspace and on access to EU airports by Russian carriers of all kinds and new sanctions on persons and entities.
Amongst other measures, the UK have excluded all major Russian banks from the UK financial system. British individuals and businesses are banned from partaking in transactions with the Russian central bank, its finance ministry and its wealth fund.
The US sanctions aim to target Moscow’s banking, technology and aerospace sectors. Russian financial institutions (including the Russian Central Bank) and certain Russian individuals in the inner circle of the President of the Russian Federation are barred from processing payments through the US financial system. Export restrictions on technology, including semiconductors, telecommunication, encryption security, lasers, sensors, navigation, avionics and maritime technologies have also been implemented by the US.
The EU, UK and the US have also pledged to remove Russia from the Society of Worldwide Interbank Financial Telecommunications (SWIFT), a global messaging service that connects financial systems and allows for the smooth transfer of funds across borders. The EU, UK and US are amongst the various countries that have frozen the Russian central bank’s reserves held in their respective jurisdictions.
Switzerland, a country known to be traditionally neutral, has announced that they will adopt all the sanctions already imposed by the EU on Russia in response to the situation in Ukraine.
Singapore took a position on the situation in Ukraine by announcing that it would “impose export controls on items that can be used directly as weapons in Ukraine to inflict harm or to subjugate the Ukrainians”. Foreign Affairs Minister Vivian Balakrishnan delivered a ministerial statement which also set out that Singapore will also block certain Russian banks and financial transactions connected to Russia. The Monetary Authority of Singapore has sent a circular to all financial institutions “reminding them to manage any risks associated with the situation in Ukraine and the sanctions imposed by major jurisdictions”.
Apart from keeping up with the sanctions developments to understand how the sanctions can affect your businesses, it is important for your company to consult legal advice on the steps that can be taken to minimise the company’s exposure to liability. Some instances where your company may be affected are where payments have to be made to or from Russian entities (whether directly or indirectly), delays in deliveries and price increases caused by disruptions in the supply chain.
For further information, please contact:
JTJB Singapore Office
This update is for general information only and is not intended to constitute legal advice. JTJB has made all reasonable efforts to ensure the information provided is accurate at the time of publication.