On 24 February – the four-year anniversary of the Russian full-scale invasion of Ukraine – the UK Government added 240 entities, 7 individuals, and 50 vessels to its list of asset-freezing targets under the UK Russia (Sanctions) (EU Exit) Regulations 2019. As with other UK asset-freezing measures, persons subject to UK sanctions jurisdiction are now broadly restricted, absent licensing, from most dealings involving the newly sanctioned parties/vessels, or any non-designated entity that is majority-owned or otherwise controlled by a newly-designated person or entity.
The new UK sanctions designations are notable in a number of respects:
- The UK has designated Transneft, Russia’s largest oil pipeline company and one of the few remaining non-sanctioned Russian energy sector companies. The UK Office of Financial Sanctions Implementation (“OFSI”) has in parallel issued a general licence, permitting the winding down of business concerning Transneft. The licence expires at the end of the day UK time on 9 April 2026.
- OFSI has also issued a general licence permitting certain insurance-related transactions involving newly-designated Maritime Mutual Association Limited.
- The designations include an affiliate of Russian state-owned energy company Rosatom, Rosatom Energy Projects, which is understood to be involved in nuclear energy export-related activity.
- The designations include a large number of entities (the wide majority of the newly-designated entities) established in the UAE, China and Hong Kong which are alleged to have been involved in Russian energy export activity, and/or the supply of equipment and components for use by the Russian military.
Delay of the EU’s 20th Sanctions Package
The EU had also planned to adopt its 20th package of sanctions against Russia by the fourth anniversary of Russia’s full‑scale invasion. The European Commission submitted the draft package to the Council of the European Union on 6 February, with adoption envisaged at the Council meeting on 23 February. However, the member states were unable to reach agreement.
According to media reports, the delay was driven primarily by objections from Hungary and Slovakia. Those objections were reportedly linked not to specific measures in the sanctions package but to a separate dispute concerning the interruption of Russian oil deliveries via the Druzhba pipeline through Ukraine to both countries. Despite this setback, the package is still expected to be adopted in the near term, although the precise timeline remains uncertain.
Based on the EU Commission’s public communication, the draft package submitted on 6 February includes the following measures:
- Additional asset‑freezing designations, including 20 Russian banks and banks in third countries that facilitate trade with Russia in sanctioned goods.
- Expansion of the maritime services ban relating to Russian crude oil exports, which would prohibit EU companies from providing services to any vessel transporting such products.
- Additional export restrictions covering a wider range of goods, including certain rubber products and tractors.
- New import bans targeting various metals, chemicals and critical minerals.
Notably, for the first time, the proposal also introduces export restrictions on certain computer numerical control (CNC) machines and radios destined for jurisdictions considered to present a high risk of re‑export to Russia. While the EU Commission has not identified the specific countries concerned, press reports suggest that Kyrgyzstan may be among them.
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We continue to closely monitor developments concerning the U.S., UK, and EU sanctions against Russia, and will issue further updates in the event of material developments. In the meantime, we would be happy to address any questions you may have.
Covington’s International Trade Controls team, which includes lawyers in the firm’s offices in the United States, London and the European Union, regularly advises clients across business sectors concerning the full range of U.S. and European export controls and sanctions regulations. Our trade controls lawyers work regularly with Covington's Global Public Policy team—consisting of over 120 former diplomats and policymakers in the United States, Europe, the Middle East, Latin America, Africa, and Asia—many of whom have had substantial government experience in sanctions and export controls matters, and who regularly advise our clients on emerging sanctions policy matters and related engagements with government stakeholders.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our International Trade Controls practice.
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