UK actions include:

• On 15 March, the UK announced sanctions on 370 Russian individuals, including 51 oligarchs and their families with a combined net worth of over USD 100 billion.³
• Also on 15 March, the UK passed the new Economic Crime (Transparency and Enforcement) Act, which will allow the government to move more quickly to impose sanctions against oligarchs already designated by the U.S. and EU, as well as intensify sanctions enforcement.⁴ The Prime Minister also announced a new “Kleptocracy Cell” based in the National Crime Agency, which has been created to target sanctions evasion and corrupt Russian assets hidden in the UK.⁵
• The Bank of England, Financial Conduct Authority, and the Office of Financial Sanctions Implementation issued a joint statement on 11 March reiterating that financial sanctions prohibitions do not differentiate between cryptoassets and other forms of assets.⁶

U.S. actions include:

• On 16 March, the U.S. Department of the Treasury announced the launch of the Russian Elites, Proxies, and Oligarchs (REPO) multilateral task force consisting of Australia, Canada, Germany, France, Italy, Japan, UK, EU, and the U.S. Each member jurisdiction will use its respective authorities to collect and share information and take concrete actions, including imposing sanctions, seizing assets, and pursuing criminal prosecutions.⁷
• Related to the REPO task force announcement, on 16 March the Financial Crimes Enforcement Network (FinCEN) issued an alert that highlights the importance of financial institutions identifying and quickly reporting suspicious transactions by sanctioned Russian elites and their proxies that involve real estate, luxury goods, and high-value assets.⁸
• On 16 March, the Commerce Department published a final rule regarding restrictions on exports of luxury goods to Russia and Belarus or exports to certain Russian or Belarusian oligarchs and other malign actors supporting the Russian or Belarusian governments.⁹
• On 15 March, the U.S. imposed asset freeze sanctions on 15 individuals and one entity pursuant to Magnitsky, Belarus, and Russian Harmful Foreign Activities Sanctions programs and also redesignated President Lukashenka of Belarus.¹⁰
• On 11 March the President issued a new Russia-related Executive Order (“EO”) 14068 Prohibiting Certain Imports, Exports, and New Investment with Respect to Continued Russian Federation Aggression.¹¹ The EO prohibits:
  • Importation of certain Russian origin fish, alcohol, and diamonds;
  • Exportation of luxury goods to Russia;
  • New investment in any sector of the Russian economy that the Treasury designates in the future; and
  • Exportation of U.S. dollar-denominated banknotes to Russia.
• On 11 March, the U.S. imposed asset freeze sanctions targeting elites close to Putin, including Kremlin Spokesman Dmitriy Peskov and VTB Bank’s management board.¹²
• On 11 March, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued guidance regarding virtual currency that reiterates all U.S. persons are required to comply with OFAC regulations, regardless of whether a transaction was denominated in fiat or virtual currencies.¹³
• On 11 March, OFAC issued Ukraine-related General License 23, which authorizes certain transactions in support of nongovernmental organizations to allow for activity that is ordinarily incident and necessary to support humanitarian activities in the so-called Donetsk People’s Republic or Luhansk People’s Republic regions of Ukraine.¹⁴

Key Implications (Public, Private, and Non-Profit Sectors)

• The U.S., EU, and UK continue to implement substantially similar sanctions prohibitions related to new investment in energy, prohibitions on certain trade, and targeted blocking or asset freezing sanctions against individuals and entities, among other restrictive measures. There are differences, however, on elements of the prohibitions regarding timing, scope, lists of targets, and certain permissible transactions. Any persons falling within the U.S., EU and/or UK jurisdiction need to conduct careful analysis of any of their Russia-related transactions and relationships to ensure their permissibility and to comply with any associated recordkeeping and reporting requirements.
• The U.S. and UK have explicitly communicated their expectations with regard to convertible virtual currencies (“CVC”) related to Russia sanctions. Financial institutions and virtual assets service providers should review their sanctions compliance programs to ensure that risks associated with illicit CVC activity—including the use of CVCs to evade sanctions—are fully integrated into their policies, procedures, and controls. Please see K2 Integrity’s 9 March Policy Alert, “Global Markets May Face Risk of Virtual Currency Abuse as Russian Actors Seek to Circumvent Sanctions,” for more detail.
• As the list of designated persons continues to grow, financial institutions should pay particular attention to the relatives, associates, or close friends of designated persons who may maintain accounts with the institution. Banks should stop all unusual transactional activity and investigate the legitimacy of funds transfers.
• Financial institutions and corporations should likewise remain vigilant about potential evasion techniques and detect potential red flags suggesting nontransparent practices. The U.S. Department of the Treasury reiterated OFAC’s commitment to using broad enforcement authorities to act against violations and to promote compliance.¹⁵
• While the U.S. seeks to exert economic pressure on Russia, it acknowledged the need for humanitarian assistance in the Donetsk and Luhansk regions by issuing Ukraine-related General License 23. Those engaged in humanitarian activity in Ukraine may experience difficulty in processing transactions in light of the increased sanctions obligations and associated risk.
• The dramatic and rapid impact of the global sanctions campaign on all persons and interests in Russia, coupled with the Putin regime’s internal crackdown against any opposition to the war in Ukraine, is creating an exodus of Russian people and assets.As those operating in the public, private, and NPO sectors continue to escalate and implement economic and financial measures against Russia, they will need to grapple with disaggregating sanctioned or suspect Russian transactions, relationships, and assets from those that are permissible and legitimate.