1. Does Russia have a sanctions regime in place?
2. Does Russia implement UN sanctions?
Yes. Compliance with the United Nations Security Council’s sanctions (“UN Sanctions”) is based on the Constitution, according to which the universally recognized principles and rules of international law and international treaties entered into by the Russian Federation are an integral part of its legal system. Sanctions are implemented by Presidential Orders in accordance with Federal Law No. 281-FZ dated 30 December 2006 “On Special Economic Measures and Coercive Measures” (as amended).
3. Does Russia implement an autonomous sanctions regime?
Yes. Generally, sanctions are imposed by the Government Decrees that are based on the Presidential Orders and applicable Federal Laws regulating the sanctions.
In addition to the Constitution of the Russian Federation, the main laws governing the sanctions regime are:
- Federal law No. 281-FZ dated 30 December 2006 “On Special Economic Measures and Coercive Measures”
- Federal Law No. 127-FZ dated 4 June 2018 “On Measures of Impact (Countermeasures) on the Unfriendly Actions of the United States of America and Other Foreign States” (the “Counter-Sanctions Law”)
- Federal Law No. 390-FZ dated 28 December 2010 “On Security”
- Federal Law No. 115-FZ dated 7 August 2001 “On Combating Legalization (Laundering) of Criminally Obtained Incomes and Financing of Terrorism” (the “AML/CFT Law”)
Resolution of the Government of the Russian Federation No 778 dated 7 August 2014 (as amended) have imposed a ban on import of certain listed agricultural products, raw materials, foodstuffs from the United States of America, the European Union countries, Canada, Australia, Norway, Ukraine, Albania, Montenegro, Iceland, Liechtenstein. In addition, Russia has introduced also travel bans against certain EU, American and Canadian politicians and military leaders from entering Russia.
Certain limited restrictive trade measures against Turkey remain partially in force (eg quotas of import) and the visa-free regime has been partially restored.
State Duma is considering Bill No 996800-7 dated 27 July 2020 on amending the Counter -Sanctions Law and the Federal Law No. 281-FZ by expanding sanctions regime against Ukraine.
In June 2020 the Arbitrazh Procedure Code of the Russian Federation was amended by Federal Law no. 171-FZ (the “Lugovoy Law”). The Russian state commercial courts (‘arbitrazh courts”) now have exclusive jurisdiction over disputes involving parties under foreign sanctions and in disputes between a Russian and a foreign party when sanctions against Russian persons and entities are a ground for the dispute, irrespective of the parties’ choice of jurisdiction.
4. What is the nature of the sanctions regime in Russia?
Russia implements sanctions adopted by the United Nations Security Council. In addition, it has its own autonomous sanctions regime that includes various political and economic measures, including diplomatic measures, export and import bans, change of export and import tariffs, travel restrictions, asset freezing and bans on air traffic.
Legislation does not provide any exhaustive lists of potential measures and gives the President and Government a lot of discretion on the matter. RF Government is entitled to apply additional restrictive measures in the purposes of protection of RF payment balance and RF financial status.
5. Does Russia maintain a list of sanctioned individuals and entities?
In November 2018, financial sanctions, including blocking (freezing) of assets were imposed against listed Ukrainian individuals and entities under the Counter-Sanctions Law. (The Government Decree No. 1300 dated 1 November 2018 (as amended). Currently, the list attached to Decree no 1 includes 567 individuals and 75 entities, mainly Ukrainians. The Government has reserved the right to cancel these measures if Ukraine lifts the restrictions imposed on Russian individuals and legal entities.
The list, including individuals and entities indicated in the UN Sanctions list, is included in a list maintained by the Federal Financial Monitoring Service (“Rosfinmonitoring”).
The mechanism for inclusion or deletion from the UN Sanctions list is available on the website of the relevant United Nations Security Councils committee, and the persons on the national list are added or excluded by Rosfinmonitoring based on the information received from the competent Russian state authorities.
In addition, Russia has imposed travel bans on politicians and military leaders from the EU, US and Canada. This list is not public, although at the end of May 2019, the Ministry of Foreign Affairs gave a statement in which it was announced that Russia has added EU officials to this list, as a counter-measure. According to the statement, these restrictions have been imposed in line with Federal Law No. 114-FZ dated 15 August 1996 “On the Procedure for Exit from the Russian Federation and Entry into the Russian Federation”.
6. Are there any other lists related to sanctions?
Yes. This list maintained by Rosfinmonitoring includes in addition to the UN Sanctions lists, organisations and individuals against whom there is evidence of participation in extremist activities or terrorism and it is based on the AML/CFT Law (as defined above) http://fedsfm.ru/documents/terr-list.
7. Does Russia have a licensing or authorization system in place?
Yes. It is possible to obtain a license from the Russian Federation Federal Service for Technical and Export Control. In addition, the Russian Government can also issue a general license if it is satisfied that the applicant maintains an adequate internal export control program and also obtains a state accreditation certificate in respect of such a program. There is also the possibility to obtain a permit from the Russian Federation Export Control Commission for temporary exports of goods and technologies. Under this provision, a permanent transfer to a foreign party is not allowed and the permit holder is obliged to return the goods and technology back to Russia. Under the terms of a permit, the goods and technology exported must always be controlled by a Russian entity.
8. What are the consequences for a breach of sanctions in Russia?
Chapter 16 of the Russian Federation Administrative Offences Code stipulates administrative fines for import of sanctioned products or if provided information or documents don’t comply with restrictive measures established by treaties of the Eurasian Economic Union, decisions of the Eurasian Economic Commission or regulations of the Russian Federation. The amount of fine varies from 5 000 RUB to 20 000 RUB for officials and from 50 000 RUB to 300 000 RUB for entities (along with possible confiscation of goods). RF Government Resolution dated 31 July 2015 lays out procedures for the destruction of banned products. A person found guilty of breaching article 189 of the Russian Federation Criminal Code (which deals with the illegal transfer of scientific and technical information to a foreign company or its representative for the purposes of development of arms, military equipment, weapons of mass destruction and their delivery) can be imprisoned for up to seven years, and fined up to 1,000,000 roubles or an amount equal to a salary/other income for a period of up to five years. In the event of breach of export control regulations, the offending legal entity and/or its employees would be liable for administrative fines and/or criminal sanctions. Part 1, Article 14.20 of the Russian Federation Administrative Offences Code stipulates an administrative fine equal to the value of the subject of an administrative offence (along with possible confiscation of goods), for conducting foreign trade activities without a special license. An organization can also be banned from engaging in certain types of foreign trade activities, if it is found that its actions have resulted in substantial damage to the political and economic interests of the Russian Federation or to Russia’s defence and state security.
9. Who are the relevant regulators in Russia and what are their contact details?
The Russian Federation Export Control Commission Key powers: Granting permissions for foreign economic operations with non-controlled goods and technologies in cases stipulated by law; Adoption of decisions on export of controlled goods and technologies without license; Preparation of proposals for RF Government on forfeiture of right to perform certain types of foreign economic activities with respect to organizations that breach export control legislation.
Ministry of Foreign Affairs This Ministry has general powers on protection of Russian Federation interests, including issuance of lists of individuals who are not permitted to enter Russian Federation 32/34, Smolenskaya-Sennaya Sq. 119200, Moscow T: (+7) 499 244 16 06 E: firstname.lastname@example.org
Ministry of Industry and Trade Key powers: Licensing for export and import of goods which require such licensing under Russian law (except for gas) 7, Kitaigorodskiy proezd 109074, Moscow T: (+7) 495 539 21 87 E: email@example.com
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