Rep. Gregory Meeks, D-N.Y., introduced a version of a bill that would impose a host of sweeping new sanctions against Russia in the event it invades Ukraine, including new restrictions on Russian debt and broad sanctions against the country’s extractive industries. The bill, introduced in the House last week, also would authorize certain sanctions against the Nord Stream 2 gas pipeline, designate Russian financial institutions and expedite military assistance for Ukraine, similar to its companion bill in the Senate (see 2201120036).
The Treasury Department's Financial Crimes Enforcement Network is seeking public comments on a potential pilot program that would give financial institutions more freedom to share suspicious activity reports, according to a Jan. 24 notice. The program would allow institutions to share SARs with their foreign branches, subsidiaries and affiliates to better combat illicit finance and transactions that may violate U.S. sanctions or anti-money laundering regulations. Institutions are currently only allowed to share with their head offices or controlling companies. Comments on the proposed program are due March 28.
The U.S. this week imposed new sanctions against Russia for its “destabilizing” activities in Ukraine and privately previewed a harsher set of potential trade restrictions, including major new export controls on chip equipment. Although it remains unclear if those specific export restrictions would be coordinated with allies, the U.S., Germany and the U.K. all said Jan. 20 that they are ready to impose “massive consequences and severe economic costs” on Russia if it continues down a path to war.
The United Kingdom added two Russian individuals to its Global Human Rights sanctions regime, the Office of Financial Sanctions Implementation said Jan. 13. Both former members of the Russian military, Dmitry Vadimovich Kovtun and Andrey Konstantinovich Lugovoy were sanctioned for their role in the killing of Alexander Litvinenko through deliberate poisoning in 2006. The pair were also listed under the Anti-terrorism, Crime and Security Act 2001, but OFSI gave notice Jan. 17 that the designations of the two Russians expired under that regime but are still subject to asset freezes as the two individuals' listings have been moved to the Global Human Rights sanctions regime.
Former U.S. Trade Representative Robert Zoellick, who also led the World Bank, told an Atlantic Council audience that he doesn't think sanctions on Russia if it invades Ukraine is a particularly useful approach. "Sanctions have a mixed history," he said. "They tend to be most effective as a tool when they’re narrowly focused," such as with export controls. "To be blunt, people often apply them because they’re not sure what else they’re ready to do … but they want to signal their displeasure," he said during the Jan. 19 webinar. He suggested that if the U.S., Canada and Europe offered to invest in Ukraine with an eye to improving its economy and as a carrot to improve its governance, that could be more effective.
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Switzerland sanctioned six individuals and three entities linked to the private Russian military organization the Wagner Group, aligning it with EU actions. Now subject to Switzerland's Russia sanctions list are Dimitriy Valerievich Utkin, Denis Yurievich Kharitonov and Sergey Vladimirovich Shcherbakov, while Aleksandr Sergeevich Kuznetsov was added to the Libya sanctions list. Andrey Nikolaevich Troshev, Andrey Mikhailovich Bogatov, Velada LLC, Mercury LLC and Evro Polis LLC were added to Switzerland's Syria sanctions list. In imposing its sanctions in December 2021, the EU said the Wagner Group has trained and sent private military operatives to hot spots around the world to fuel violence and intimidate civilians, among other things, in violation of international law (see 2112130009).
The European Union extended its economic sanctions targeting certain economic sectors in Russia relating to the situation in Ukraine for another six months, until July 31, the European Council said Jan. 13. The sanctions were initially imposed in 2014 following Russia's failure to fully implement the Minsk Agreements that were negotiated to end fighting in the Donbas region of Ukraine. As part of this sanctions regime, the EU has also imposed individual restrictive measures in response to Russia's annexation of Crimea and Sevastopol along with its destabilization efforts toward Ukraine.
The Russian Arbitration Association released the results of its survey looking into the impact of sanctions on commercial arbitration. The survey results showed that 21% of the respondents said they were aware of situations wherein arbitration institutions refused to administer cases due to sanctions and that 5% of respondents said they knew of cases wherein these institutions or their banks were unable to accept payments from sanctioned individuals or entities. Sixty-nine percent of the respondents reported using neutral currencies for contract payments, and 18% said they knew of cases wherein arbitrators refused to act in a case that involved a sanctioned party. RAA said the survey was "conducted among 182 respondents from various jurisdictions."
Rep. Michael McCaul of Texas, the top Republican on the House Foreign Affairs Committee, criticized the Senate’s decision last week to not pass a bill that would have required new sanctions on the Nord Stream 2 pipeline, saying it sends a “message of appeasement” to Russian President Vladimir Putin. The Senate couldn’t reach the 60-vote threshold required to pass the bill after the White House convinced many Democrats to vote against the legislation, which it said would have undermined unity with Europe (see 2201130067).