This month has seen the EU push forward with its latest wave of measures designed to further damage strategic sectors of the Russian economy. While the G7 as a whole released a statement committing to future measures, there were no substantive developments to either the UK or US’s Russia program.
October saw a continued US focus on Iran, with two successive waves of designations targeting those responsible for the death in custody of Mahsa Amini, as well as for the violent crackdown on ongoing protests in the country. The EU and UK have joined the US in targeting the Morality Police – deemed to be responsible for Amini’s death – and several other law enforcement agencies in their respective Iranian programs.
Russia-Related Measures
- The eighth package of EU sanctions targeting Russia, trailed last month by Ursula von der Leyen, was formally adopted on 6th As expected, the new measures introduce a “price cap derogation” which permits the otherwise prohibited provision of maritime transport services, technical assistance or brokering services to the trading of Russian-origin crude, provided it is purchased at or below the pre-established price cap.
- The fresh package further imposes restrictions on the importation of Russian origin steel products, wood pulp and paper, cigarettes, plastics, vehicles, textiles, footwear, leather, ceramics, chemical products, cosmetics and elements used in jewellery. The new measures also ban EU nationals from holding any posts on the governing bodies of certain Russian state-owned or controlled entities and extend the so-called professional services ban to include the provision of architectural and engineering services to Russian entities.
- On 12th October the G7 released a statement making further commitment to imposing economic costs on Russian individuals and entities, inside and outside Russia, for providing political and economic support for its illegal actions in Ukraine, without providing any specific detail.
- On 27th October the US designated nine people and 12 entities over alleged corrupt activity in Moldova. One former government official, Vladimir Plahotniuc, was listed pursuant to the Global Magnitsky sanctions, while the remainder were designated under the Russian Harmful Activities program for participating in a scheme intended to undermine Moldovan president Maia Sandu and return Moldova to Russia’s sphere of influence.
- On 29th October a new set of amendments to the UK Sanctions Act in respect of Russia came into force – the most substantive change was the creation of a new Russia Vulnerable Goods list. This consolidates the list of items deemed “critical to the functioning of Russia’s economy”, the export, supply, delivery of which for the purpose of use in Russia is prohibited.
Other Russia Developments
- The House of Commons Foreign Affairs select committee has published the Government’s response to its June 2022 report, The Cost of Complacency: Illicit Finance and the War in Ukraine. In defence of the Government’s actions, the response notes that in December 2021 there were 48 roles in the FCDO’s Sanctions Unit, now renamed the Sanctions Directorate, and that there are now in excess of 150 people working on sanctions within the FCDO.
- An additional focus of the response was to highlight the efforts of the Overseas Territories, which have frozen Russia-related assets with a combined estimated value in excess of $9 billion, the bulk of which comprises $8.4 billion frozen by the Cayman Islands and more than $400 million by the British Virgin Islands. The government response also hints at a future Anti-Corruption Strategy and Economic Crime Plan, work on which is said to be currently underway, and which will include a specific focus on kleptocracy and sanctions evasion.
- Following last month’s charging of Oleg Deripaska in the US for conspiring to evade sanctions, this month UK businessman and employee of Deripaska, Graham Bonham-Carter, was arrested in the UK pursuant to an extradition request from the US as part of the case. Bonham-Carter is accused of wiring over $1 million from a bank account in Russia to bank accounts in New York for the purpose of paying for the upkeep of residential properties in the US owned by Deripaska.
Iran
- On 8th October OFAC announced a second round of designations in the wake of the death of Mahsa Amini, who died in the custody of Iran’s Morality Police, designating seven senior Iranian government and security officials, including Ahmad Vahidi, the Minister of the Interior, as well as six law enforcement commanders. This was followed by a third wave on 28th October, when 14 people and three more entities were sanctioned, this time with a focus on regional politicians and security figures within the Isfahan, Baluchistan and Kurdistan provinces.
- The UK followed the US’s lead on 11th October, designating eight members of Iran’s Morality Police, including its national chief and the head of its Tehran division, all of whom are already subject to US sanctions, under its Iran program. The EU response began with its parliament calling specifically for the imposition of sanctions or Iranian officials involved in the death of Amini, and on 18th October the EU Council designated eleven people and four entities including the Morality Police chief, several law enforcement figures in Tehran, the Basij Resistance Force and other agencies under its Iran program.
- On 20th October the EU and UK in parallel mirrored the US move last month to designate three senior Iranian military officials for their role in the supply of UAVs to Russia for use in its invasion of Ukraine.
Legislative Developments
- In the UK, the draft Sanctions (Damages Cap) Regulations 2022 bill, which was laid before parliament in July, was approved by the House of Commons on 19th October and came into force a week thereafter. The bill amended the Sanctions Act to impose a cap of £10,000 on the damages a court can award for designations made in bad faith in proceedings brought under the same act.
Miscellaneous Designations
- On 3rd October OFAC designated the Prime Minister of the Federation of Bosnia and Herzegovina Fadil Novalic for undermining democratic processes in the Western Balkans by unlawfully misusing pensioner data for the benefit of his own political party.
- On 8th October OFAC designated three people and one entity deemed to be connected to Myanmar’s military regime.
- On 11th October OFAC designated two people and three entities, all of which are affiliated with the Singapore flagged ‘Courageous’ vessel, which was allegedly used to transport refined petroleum to North Korea.
- On 11th October OFAC designated Malaysian national Tee Boon Ching and his eponymous group, now a transnational criminal organisation, for their involvement in trafficking endangered wildlife from Africa to Asia.
- The EU has removed three people from its Burundi sanctions list, leaving only one officer from its National Intelligence Service. The decision was taken at the same time as the choice to renew the program for a year and follows the US’s revocation of its equivalent program in November 2021 and the revision by OFSI of its equivalent in January 2022 to reflect the broadly peaceful transfer of power in the country following its 2020 elections.
