On 14 December 2023, the UK Government introduced its seventh package of sanctions targeting Russia through two new regulations – The Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2023 and The Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2023 – amending The Russia (Sanctions) (EU Exit) Regulations 2019.

Key measures:

  • New export restrictions have been introduced, targeting goods carrying a risk of military or industrial usage including machine parts and electronics.
  • New import restrictions have been introduced, including a ban on importing certain Russian-origin metals, diamonds, and diamond jewelry.
  • Correspondent banking measures have been expanded to capture all currencies, rather than just sterling payments.
  • New frozen asset reporting obligations have been introduced.
  • New prohibitions on ancillary services relating to luxury goods have been introduced.

This new package of sanctions includes, but is not limited to, the following measures:

Additional export restrictions:

  • Imposing restrictions on a number of goods, specifically goods carrying a risk of military or industrial usage, with the intention of further "depriving Russia of products it could use in its war." These additional restrictions apply to a wide variety of items including certain chemicals, electrical goods, machine parts, electronics.

Ban on the import of certain Russian metals:

  • Introducing further prohibitions on acquiring, importing, supplying, or delivering (i.e., to third countries) certain metals consigned from, located in, or originating in Russia. The restricted metals include aluminum, cobalt, copper, lead, magnesium, nickel, tin, and zinc.
    • However, on the 14 December 2023, OFSI introduced a general license which authorises certain parties, including members of the global metal exchange and the London Metal Exchange, to continue trading in Russian metals (i.e., permitting the direct or indirect acquisition of a warrant on a global metal exchange).

Further iron and steel restrictions:

  • Broadening the prohibition on the import, acquisition, supply, and delivery of certain Russian iron and steel products, and ancillary services related to those products, to include a new category of controlled products (capturing products which fall within HS codes 7201 – 7205, which includes pig iron and ferro-alloys).
  • Certain exceptions are permitted, for example, restricted iron and steel goods that were consigned from Russia before 15 December 2023 and that were imported into the UK before 14 January 2024.

Ban on the import of Russian diamonds:

  • Introducing a new prohibition, which came into effect on 1 January 2024, on the import, acquisition, supply and delivery of diamonds and diamond jewellery which are originate in, consigned from, or located in Russia, as well as the provision of ancillary services.
    • There are certain exceptions, such as a personal use exemption for diamond jewellery (e.g., excluding the import of diamond jewellery for personal use that is contained in the luggage of somebody travelling to the UK).

Expansion of correspondent banking measures:

  • Broadening the existing prohibition on UK credit and financial institutions processing payments to/from certain designated Russian financial institutions (subject to limited exceptions). The prohibition now covers processing not only Sterling payments, but payments in any currency.
    • On 15 December 2023, 26 additional Russian banks were sanctioned, which bans UK credit or financial institutions from establishing or continuing a correspondent banking relationship with the designated financial institutions.

Frozen asset reporting obligations:

  • Introducing new asset reporting obligations, with the intention of providing greater transparency of assets held in the UK by designated persons:
    • Asset reporting obligations, which came into effect on 15 December 2023, apply to "relevant firms" that hold assets that they know, or have reasonable cause to suspect, are subject to the restrictions on providing financial services to certain prohibited persons (specifically, the Russian Central Bank, National Wealth Fund and Russian Ministry of Finance and persons owned/controlled by such persons).
    • Additional asset reporting obligations, which came into effect on 26 December 2023, apply to persons who are designated under the UK's Russia financial sanctions regime and imposes a requirement to inform HM Treasury of the nature and value of any funds or economic resources which that person owns, holds or controls (i) in the UK if the designated person is not a UK person, and (ii) in any jurisdiction (including the UK) if the designated person is a UK person.

Prohibition on services related to luxury goods:

  • Prohibits the provision of ancillary services related to the export, supply, delivery, or making available luxury goods to, or for use in, Russia, or to a person connected with Russia. It is now prohibited to provide (i) technical assistance, (ii) financial services or funds, or (iii) brokering services related to controlled luxury items.

New licensing ground to support divestment from Russia:

  • Introduces a new licensing ground to support businesses that seek to divest from Russia. The new licensing ground applies in relation to various financial sanctions, including dealings with designated parties, for example, to enable a UK entity to divest itself of funds or economic resources located in Russia.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.