European sanctions and russian retaliations

22 March 2022
Frédéric Saffroy and Alice Bastien

Increased sanctions against Russia : crypto assets targeted

March 9 and 10, 2022, the European Union increased its sanctions against Russia et added new names on the list of the persons and entities subject to an asset freeze and a travel ban. As of March 15, 2022, 863 people and 53 entities are affected (Regulation (EU) 2022/396 of 9 March 2022 and Regulation (EU) 2022/408 of 10 March 2022).

The Council also modified the definition of transferable securities in Regulation 833/2014, revised, to include crypto assets. It is therefore prohibited to directly or indirectly purchase, sell, provide investment services, or deal with crypto assets issued by legal persons or entities established in Russia, with over 50% public ownership or control, or by legal persons or entities established outside the Union whose proprietary rights are owned for more than 50% by Russia (Regulation (EU) 2022/394 of 9 March 2022).

Russian retaliation: Russian operations of foreign groups may be seized

To retaliate, a Russian draft law provides mandatory sale of enterprises that refused to continue their business in Russia and are owned or controlled by persons from “unfriendly” countries (European Union, United Kingdom, United States, Australia, Canada, Japan, etc.), when the shareholders and/or the management bodies terminated the management of the enterprise or when they took actions that may lead to unjustified termination of activities, liquidation, or bankruptcy of the company.

Russia also subjected to prior consent of the Government Commission on Monitoring Foreign Investments, chaired by the Russian Finance Minister, all operations between Russian residents and people related to foreign unfriendly states regarding credits and loans, securities, and real property. Operations on foreign currency or using electronic means of payment are also subject to prior approval (Decree No. 81, dated March 1, 2022).

For any additional information, please contact the Compliance and Regulatory team.

Frédéric Saffroy, Partner & Alice Bastien, Associate.