In May 2024, the EU introduced a new Russia sanctions programme targeting those responsible for human rights violations in the country. The EU also carried out several designations related to the dissemination of Russian propaganda and disinformation across Europe. The US, meanwhile, listed 280 individuals and entities globally for supporting Russia’s economy.
May 2024 also saw joint action taken by the US, UK and EU in listing individuals and entities involved in the transfer of weapons and oil between the DPRK and Russia. In the US, OFAC imposed visa restrictions on over 250 members of the Nicaraguan government and the US Department of Homeland Security listed 26 Chinese textile companies on the Uyghur Forced Labor Prevention Act Entity List.
The EU this month renewed its sanctions regimes targeting Moldova, Myanmar, and Syria, and broadened the framework of its Iranian sanctions. Meanwhile, the UK has revoked its Burundi sanctions programme.
In the enforcement space, activity in the EU was most notable. The General Court of the EU rejected challenges to sanctions imposed on two individuals and three entities, including those submitted by The Russian Direct Investment Fund, the country’s sovereign wealth fund, and the sister of Russian oligarch Alisher Usmanov. The EU Court did, however, grant the annulment of sanctions against one Russian businessman – Farkhad Akhmedov.
Russia
- The EU established a new sanctions programme to target those responsible for and those financing human rights violations, the repression of civil society, and undermining democracy in Russia. The new regime also introduced export controls on equipment used for internal repression, information security, and the monitoring or interception of telecommunication. The EU suspended the broadcasting activities of four media outlets in the EU, designating two individuals and one entity responsible for spreading Russian propaganda across Europe. A French proposal, backed by Estonia, Latvia, Lithuania, the Netherlands, and Poland, has also been sent to the EU to establish a new programme targeting Russian disinformation and election interference worldwide.
- The EU passed regulations ordering European central securities depositories holding Russian sovereign assets and reserves of more than €1 million to make a financial contribution to the EU of 99.7% of the net profits from those assets. Starting from July 2024, the EU will distribute 90% of the profits received to support the Ukrainian military and 10% to fund the reconstruction of Ukraine.
- On 1st May 2024 OFAC and the US Department of State designated almost 280 individuals and entities from ten countries for supporting Russia’s economy and imports, including those enabling Russia to acquire technology and equipment from abroad. On 14th May OFAC designated a Russian individual and three companies involved in an attempted sanctions evasion scheme to unfreeze over $1.5 billion worth of shares belonging to sanctioned oligarch Oleg Deripaska.
Other Designations
- The UK, US, and Australia designated Russian national and leader of ransomware group LockBit, Dmitry Khoroshev, with the US Department of Justice also unsealing charges against him for conspiracy to commit fraud, extortion and related activity.
- The US, UK, Australia, Canada, and other countries designated individuals and entities involved in the transfer of weapons and oil between the DPRK and Russia. The EU followed suit, designating six individuals and three entities for their connection with the DPRK’s nuclear and ballistic missile programmes and military support for Russia. The EU also carried out designations related to involvement in Iran’s UAV and missiles programme.
- The UK designated three Ugandan politicians who have been charged with corruption in Uganda for allegedly stealing infrastructure resources from government-funded projects. The UK also designated two groups and four individuals allegedly connected to violence and human rights abuses against Palestinian communities in the West Bank. The UN designated three individuals for supporting Al-Shabaab and engaging in acts that threaten the peace and security of Somalia.
- OFAC carried out seven Hizballah-related designations, as well as the listing of two Rapid Support Forces commanders for violence in Sudan and the former Chief of the Bangladesh Army Staff for alleged corruption. On a larger scale OFAC imposed visa restrictions on over 250 members of the Nicaraguan government and levied sanctions on three gold mining entities for repressive actions and failing to stem migrant smuggling through Central America. The US Department of Homeland Security also listed 26 Chinese textile companies on the Uyghur Forced Labor Prevention Act Entity List, bringing the number of total entities listed to 65.
Sanctions Amendments
- The EU has renewed its sanctions regimes targeting individuals and entities in Moldova, Myanmar, and Syria for one year. The EU also broadened the framework for its Iran sanctions to encompass Iran’s military support of Russia. Already targeting those said to be responsible for, supporting, or involved in Iran’s Unmanned Aerial Vehicle’s (“UAV’s”) programme, sanctions will now also cover missiles.
- The UK extended the General Licence for humanitarian activity in Israel and the Occupied Palestinian Territories until 14th May 2025. Other revisions to UK sanctions include a ban on designated persons acting as directors of UK companies, restrictions on the import of aluminium and ancillary services from Belarus, and the power to impose travel bans under counter terrorism sanctions regulations. The UK also revoked its Burundi sanctions regime.
- OFAC has amended the Cuban Assets Control Regulations to expand authorisation for internet-based services to support private sector activities in Cuba, to authorise independent private sector entrepreneurs who are Cuban nationals to open, maintain, and remotely use US bank accounts, and to reinstate an authorisation for “U-turn transactions”, which are funds transfers that originate and terminate outside the US where neither the originator nor beneficiary is subject to US jurisdiction.
Enforcement and Challenges
- In May 2024, US national Nikolay Grigorev, who was charged alongside two co-defendants in October 2023, pleaded guilty to a conspiracy to export $250,000 worth of US drone technology to Russian companies. Separately, the US District Court of the Southern District of New York granted JPMorgan an antisuit injunction ordering VTB Bank to immediately discontinue its proceedings in Russia and cease efforts to enforce the freezing order granted by a Russian arbitration court against JPMorgan to satisfy VTB’s claim for $439 million.
- The UK Supreme Court granted permission to Russian businessman Eugene Shvidler to appeal against the Court of Appeal judgment upholding sanctions against him. The UK designated Shvidler in March 2022 for his association with Roman Abramovich and for being a director of Evraz PLC, a company which has been accused of continuing to do business in sectors of strategic significance to the Russian Government.
- Despite the annulment of the designation of Russian businessman Farkhad Akhmedov, the General Court of the EU rejected several challenges to its designations relating to Russia and Belarus. Rejections to de-listing applications of individuals included those submitted by Gulbakhor Ismailova, the sister of Russian oligarch Alisher Usmanov, and Alexander Vinokurov, who was designated for his business interests in Russia. Two airlines failed in their challenges to the General Court of the EU: Belavia Belarusian Airlines AAT, which was designated in December 2021 for facilitating the illegal immigration of third country nationals into the EU; and Kyrgyz company Global 8 Airlines, which sought the annulment of a decision of the European Commission of March 2023 regarding two of its aircrafts which were prohibited from landing in, taking off from or flying over EU territory under the EU’s Russian sanctions regime.
- Russian sovereign wealth fund The Russian Direct Investment Fund (“RDIF”) also challenged the EU’s prohibition on investing in projects financed by the RDIF, but the EU General Court rejected its annulment application. The Court said the EU has a broad discretion to decide on foreign policy measures including Russia sanctions, and it was not manifestly inappropriate for the Council to have adopted measures restricting direct investment in the Russian financial sector, irrespective of the role of the Russian Direct Investment Fund.
