What sanctions have been placed on Russia post-invasion of the Ukraine, and how can the US use imports and exports to their advantage.
In response to the Russian invasion of Ukraine on 24 February 2022, the, US and UK, alongside allies across the world, swiftly executed the biggest package of sanctions ever imposed against a G20 nation. The US, as one of the strongest countries in the world has the ability to shut down nations through sanctions. So, let’s take a look at some of the sanctions that the US has the power over alongside Luciano Racco, Co-Chair of Foley Hoag’s Trade Sanctions & Export Controls practice.
For months, the Biden administration and the governments of US allies around the world have raised concerns about Russian actions in the region. In the same breath, those governments have warned of massive, coordinated sanctions against Russia as the certain response to an escalation of the conflict. Despite months of diplomacy, tensions have soared and there are now too many tea leaves to dismiss as merely hypothetical the threats of a renewed armed conflict breaking out in the region and the resulting crippling sanctions.
The Biden administration has now assessed that Russia has massed sufficient forces around Ukraine to launch an invasion. The US and allied countries (as well as Russia) have ordered diplomatic staff and private citizens to leave Ukraine immediately, and there was a vote in the Russian parliament to request that Putin recognise two breakaway regions in eastern Ukraine. A superyacht alleged to be owned by Putin recently abruptly sailed from Germany, where it was undergoing renovations, to the nearby Russian enclave of Kaliningrad prior to the completion of the work on the vessel, in an apparent attempt to avoid its seizure in the event Putin himself is personally sanctioned.
While a new escalation of the armed conflict may seem imminent, the situation is rapidly developing, and may quickly swing from escalation to de-escalation to something in between. We do not know when or if military action will occur; however, the Biden administration has made it clear that sanctions and exports controls will be part of the response of the US and its allies. Any individuals or companies with business interests or investments in Russia should escalate contingency planning if they have not already done so. In order to assist with these efforts, we have outlined sanctions, export, and investment controls that may be imposed against Russia, and what steps individuals or companies can take now to mitigate the economic impact of such actions.
One of the hallmarks of US sanctions policy in the first year of the Biden administration has been a preference for sanctions coordinated with allies including Canada, the EU, and the UK. It is certain that any new sanctions on Russia will follow this model. As outlined below, the US and its allies have a variety of sanctions options from which to choose.
To read more exclusive features and latest news please see our March-April issue here.