Sanctions against Russia: The end of the beginning?
Russia’s war in Ukraine is now entering its third year. Although the pace at which new sanctions are being introduced has reduced somewhat from the frenetic levels of activity in 2022 and 2023, new parties are consistently being designated for asset freezing purposes, expanding the reach of existing sanctions measures. However, as legislative activity slows vis-à-vis new types of sanctions, new and even more complex risks (relating to the circumvention and evasion of sanctions) have come to the fore. While global businesses have worked hard to understand the meaning and implications of the sanctions in place, the work is far from finished.
Constant vigilance is required to identify those that are performing unlawful activities in a manner that would give the appearance of lawfulness to avoid the effect of sanctions, but it is an inherently difficult exercise. The evidence that would enable the detection of unlawful activity is often equivocal, and ‘bad actors’ are proving adept at finding new, innovative ways to maintain and further their interests, becoming ever more sophisticated in their efforts to circumvent the sanctions in place. The focus now must therefore be on consolidation, and on ‘closing the gaps’ to combat the rapid emergence of new evasion typologies.
This has not the escaped the notice of legislators; as the types of new sanction that can be imposed on Russia reduce, the prevention of circumvention and evasion of sanctions (and enforcing them) is very much a priority, and will remain so for the foreseeable future. Each of the UK, EU and the U.S. has made it clear that clamping down on circumvention is a high priority in 2024 and beyond.
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Toolkit: Sanctions Navigator
The Sanctions Navigator provides a practical and straightforward overview of the key international sanctions regimes. It allows you to assess key sanctions risks at a glance, evaluate the impact of sanctions on your business, and keep abreast of the latest developments by receiving insight and analysis from the Hogan Lovells International Trade team. You can find out more about Sanctions Navigator here.