Westminster Russian Forum Sanctions Financial Trade Sanctions overview

Westminster Russian Forum Sanctions Financial & Trade

Sanctions overview EU/UK US • Sovereignty of Ukraine – Asset Freezes (limited) – Crimea trade restrictions – Russia sectoral sanctions – Applies within EU and to EU persons/businesses • Sovereignty of Ukraine; human rights; cyber security; use of chemical weapons • Assets Freezes – more extensive than EU • Crimea – total embargo • Russian sectoral sanctions – more extensive than EU • Partial extraterritoriality • New sanctions – 22 November

Asset Freeze (blacklisting) • • EU - designated persons; US – SDNs Funds/assets frozen EU/US persons can’t do business with – Designated persons/SDN – Related entities (50% rule) April 2018 – US extension, including – Alexey Miller (Gazprom CEO); Andrey Kostin (VTB CEO); Vladimir Bogdanov (Surgutneftegaz CEO); Viktor Vekselberg (Renova etc. ) Oleg Deripaska (Basic Element, EN+, Rusal, GAZ, etc. ) – Rusal, Basic Element, EN+, GAZ, Eurosibenergo, Renova • US Treasury Dept. CAATSA sec. 241 Report to Congress listing many of Russia’s senior political figures, oligarchs, and “parastatal entities” • Licences to allow wind-down and divestment • Sulzer (50% owned by Renova)- “The first clue you have that things are going to be complicated is your bank calls you up and says: ‘Look, we’re going to have to stop working with you’, ”

Russia – Sectoral EU • • US • Oil projects – List of controlled equipment – licence to export needed – Brokering, technical support and financing – licence needed – No licence if relates to deep water oil exploration & production; Arctic oil exploration & production; or shale oil projects in Russia Financial – Prohibited to deal in transferable securities and money-market instruments with a maturity exceeding 30 days issued by: Sberbank, VTB Bank, Gazprombank, Vneshconombank, Rosselkhozbank, OPK Oboronprom, United Aircraft Corporation, Uralvagonzavod, Rosneft, Transneft, Gazprom Neft; or related owned or controlled companies – Prohibited from making new loans or credit with a maturity exceeding 30 days to such parties Similar but wider – Oil restrictions apply to new projects outside of Russia if one of the following companies has a 33% or greater ownership interest: Gazprom; Gazpromneft; Lukoil; Rosneft; Surgutneftegas – Chemical weapons related sanctions – 22 November – Extra-territoriality

Advice to clients • Majority of EU/Russia business is lawful but should consider: • 3 rd party and end user screening • Including owners & directors and any Russian banks • Check application of sectoral restrictions • Check applicable export controls • Check for available licences • factor in time to apply • Check for any US origin goods, US financing and persons • Avoid 3 rd party country routings for goods and unusual payment arrangements • Circumvention and AML risks • Designated persons – seek explanation for listing; consider challenging through UK/EU courts