What will be the sanctions policy towards Russia in 2024? This can be seen from the key decisions on sanctions already built into the current sanctions policy.
Expect to see an expansion of economic and trade sanctions, an improvement in the mechanisms for confiscating Russian assets, and more systematic attempts to force third-country companies to refuse to cooperate with Russia, in particular in the areas of industrial supplies and technological cooperation. These three areas constitute the basic scenarios for the 2024 sanctions against Russia.
The extension of economic sanctions is a regular process that underpins each new wave of restrictive measures against Russia. So far, the European Union has blocked 335 legal entities and 1 645 natural persons in connection with the Ukraine conflict. This does not include those assets sanctioned under the “50% rule” – subsidiaries, branches and the like.
Discussions have already started on the 13th EU sanctions package against Russia. EU Member States are expected to approve it by 24 February. So far, it is known that the lists will be expanded to include new natural and legal persons, as well as additional trade restrictions and measures to combat the circumvention of existing sanctions through third countries.
The same applies to trade sanctions. Dual-use goods are already almost completely banned from Russia. However, the lists of industrial goods and “luxury goods” banned from Russia, as well as those banned from Russia, may be extended. Restrictions on the prohibition of supplies of Russian origin to third countries are being actively pursued.
Another regular topic of public discussion is the confiscation of assets of sanctioned Russian persons and the subsequent transfer of funds to Ukraine. Canada has developed a mechanism for such confiscation. There is a precedent in the US for transferring part of the assets of a Russian blocked person to Ukraine, but these are assets involved in criminal cases of sanctions evasion. However, a mechanism similar to the Canadian one has not yet been developed in the US.
Pressure on business from Russia-friendly countries and the fight against sanctions evasion promises to become more visible. These measures were already very active in 2023. Almost all US sanctions against Russia included sanctions against individuals from third countries – Turkey, UAE, China, Singapore, Kyrgyzstan, Cyprus and others – that the US authorities considered to be involved in circumventing export control and other sanctions regimes. It is worth noting that the US regulator’s sanctions were previously limited to transactions denominated in US dollars, but the amendments adopted last December allow secondary sanctions to be applied also to transactions denominated in other currencies. A similar mechanism for secondary sanctions already appeared in the EU last year, although it was applied only on a very limited scale, and EU export controls on third countries through which goods from the EU are shipped to Russia to circumvent sanctions have not yet been applied at all. However, prosecutions of sanctions violators in the EU are rapidly gathering pace and are already comparable to those in America.
AML.Plus team