UK sanctions against Russia: overview of recent developments

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UK announces largest sanctions package against Russia to mark the third anniversary of the Russia-Ukraine conflict

On 24 February 2025, the UK government marked the third anniversary of the Russia-Ukraine conflict by announcing its “largest sanctions package against Russia since 2022.” This package consists of over 100 new asset freezing designations targeting individuals and companies subjecting them (and any entities they own or control) to asset freezes and trust services restrictions. The UK announced that the aim of the designations is “to put Ukraine in the best position to achieve peace through strength.” The sanctions target Russia’s military machine, entities in third countries who support Russia, and the supply networks that it relies on.

The sanctions package featured, for the first time, entities and individuals from outside the UK’s jurisdiction. The entities targeted include producers and suppliers of machine tools, electronics and dual-use goods for Russia’s military, including microprocessors used in weapons systems, based in various third countries including Central Asian states, Turkey, India and China. For example, GSK CNC Equipment Co Ltd, a China-based company that exports Western-produced microelectronics to the Russian defence sector, EKC.AG, a Germany-based raw materials trader and part of a network supplying the Russian defence sector with critical minerals used to produce armaments, and EKC.AG’s co-owners, Russian nationals Evgeny Viktorovich Porokhnya and Vladimir Viktorovich Platunov, are among those sanctioned for enabling and supplying the Russian defence sector.

For the first time, the UK has used new powers to target foreign financial institutions by designating OJSC Kermet Bank (Kyrgyzstan), which was earlier the first foreign financial institution designated under US secondary sanctions under Executive Order 14024 (as amended by Executive Order 14111). In July 2024, the UK government expanded the designation criteria under The Russia (Sanctions) (EU Exit) (Amendment) (No. 3) Regulations 2024 allowing for the designation of individuals and entities providing financial services, or making available funds, economic resources, goods or technology to persons involved in destabilizing or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine and/or to obtain a benefit from or support the Government of Russia. The expansion of the designation criteria is aimed at preventing sanctions evasion through the diversion of sanctioned goods, technology and services via third countries that do not recognize or implement the sanctions imposed on Russia.

The UK has also designated North Korean Defence Minister No Kwang Chol and other generals and senior officials involved in supporting Russian military action in Ukraine, namely through the deployment of over 11,000 DPRK forces to Russia.

The new sanctions package includes specification of a further 40 “shadow fleet” ships carrying Russian oil under flags of various countries including Barbados and Panama which the UK government says collectively carried over $5 billion worth of Russian oil and oil products in the preceding six months alone. The UK has now sanctioned a total of 133 oil tankers – the highest number in Europe.

The Russian individuals targeted include 14 “New Kleptocrats” whom the UK government believes are involved in sectors of strategic significance to the Russian government. Among those sanctioned are Roman Trotsenko, one of Russia’s wealthiest men (said to be worth $2.2 billion), who has been designated due to his ownership of Novaport Holding, which controls a number of Russian airports, and LLC Aeon Corporation, which operates in the extractives, energy and chemicals sectors.

The full list of the 107 designations is available here.

OTSI issues guidance on countering Russia sanctions evasion

On 7 January 2025, the Office of Trade Sanctions Implementation (“OTSI”) issued new guidance on combatting Russia sanctions circumvention, and on including a “no Russia” clause in customer contracts. The new guidance aims to provide an understanding of circumvention practices and recommends steps to mitigate the inherent risks associated with Russia sanctions. The guidance lists certain goods, under the Common High Priority Items List (“CHPL”), that are considered at high risk of being diverted to Russia. These include a wide range of industrial machinery and laboratory equipment, motor vehicles, engines and instruments for aeronautical and radio navigation as well as other additional items that are identified as supporting the Russian military and industry.

The guidance also flags certain sectors that are generally at greater risk of being diverted and re-exported to Russia to circumvent sanctions; these include military and dual-use goods, aerospace, automotive, microelectronics and heavy machinery.

The guidance further notes that Russia continues to purchase sensitive goods from companies located in third countries including, though not limited to, China, Malaysia, Turkey and the UAE. It is therefore advised that companies “may wish to conduct enhanced due diligence when exporting at-risk products to certain countries to prevent re-export to Russia” and that businesses “should continually assess the export control environment of countries they engage with.”

The guidance outlines potential red flag indicators of export control and sanctions evasion and encourages the use of these indicators to guide a bespoke due diligence process on both potential and existing trading partners. The indicators listed are:

• Product: for example, whether the transaction concerns sanctioned goods or whether the product capabilities are fit for the buyer or the end-user’s line of business;
• Customer: for example, whether the customer is directly or indirectly involved in the supply, sale, purchase or delivery of restricted or high-risk goods or the customer has business ties to a sanctioned entity or person or a branch office in Russia;
• Transaction: for example, whether the customer is willing to pay cash for an expensive item when the terms of sale would normally require financing, or where there are payments from entities located in third countries which are not otherwise involved in the transaction; and
• Export Destination: for example, additional due diligence is recommended when the destination country or the shipment route is abnormal for the product or the destination.

The guidance proposes that businesses involved in exporting CHPL and other items that are critical to Russia should consider including a “no re-export to Russia” clause in their contracts to mitigate the risk of restricted items being exported to Russia. A template wording is included in the guidance. It is notable that the inclusion of a “no re-export to Russia” clause is not a legal obligation in the UK.

New reporting obligations

On 5 December 2024, the UK government introduced new regulations which included changes to reporting obligations under the UK sanctions regime.

Pursuant to these amendments, relevant firms are now required to report knowledge or suspicion of any non-compliance with sanctions regulations. This new threshold means that all knowledge or suspicions of non-compliance will need to be notified to the Office of Financial Sanctions Implementation (“OFSI”). Previously, a “relevant firm” was required to report to OFSI if they knew or had suspected that an offence had been committed under the UK financial sanctions laws, if the knowledge or suspicion arose in the course of carrying on business.

In addition, the amendments include an expansion of the scope of “relevant firms” to now include high-value dealers, art market participants, insolvency practitioners and letting agencies. This change will be effective from 14 May 2025.

Coordination between OFAC and OFSI

On 13 January 2025, OFSI and the US Office of Foreign Assets Control (“OFAC”) published a Memorandum of Understanding (“MoU”) aimed at increasing the collaboration and coordination between the two agencies. The MoU provides a framework for enhanced information sharing and the conduct of joint investigations and enforcement actions between the two agencies. The MoU focuses on collaboration in the following key areas:

• Communications – the two agencies agree to encourage their respective staff to maintain ongoing, ad hoc communications to ensure coordination of their respective operations in compliance with all applicable laws.
• Requesting information – requests for information must outline the reason for the request by identifying the legal basis and/or relevant laws and regulations under which the information is requested as well as the intended use of the information requested.
• Alternative information sharing mechanism – the agencies may assess other appropriate mechanism for sharing relevant information as needed.
• Controls and safeguards – in carrying out all activities under the MoU, the agencies must comply by all applicable laws and regulations such that information is shared confidentially and with appropriate procedures regarding the handling of personal data.
• Third-party sharing, prior written consent, and notification – where the provision or disclosure of information is constrained by agreements with third parties, each agency will endeavor to take reasonable steps to secure the necessary consents to disclose relevant information. Unless legally required, the agencies will not disclose information obtained from each other to any third party outside the US Department of the Treasury or HM Treasury without prior written consent of the other agency.
• Unauthorized disclosures – each agency will adopt appropriate measures to protect information from unauthorized use or disclosure.
• Refusing a request for information – each agency may decide not to share certain information for reasons including, though not limited to, if the request violates applicable laws and regulations, if the release of the requested information unduly prejudices an investigation or proceeding in its jurisdiction or if there is a more appropriate alternative information sharing mechanism.
• Record requirements – the agencies are required to document the requests and receipt of information consistent with applicable recordkeeping requirements.

Notwithstanding the possible changes that may be brought by the new US administration, the primary purpose of the MoU is to align and strengthen the collaborative relationship between OFAC and OFSI and to promote compliance with economic sanctions and certain trade sanctions introduced in the respective jurisdictions.

Recent delistings

On 11 February 2025, Irina Vladimirovna Chubarova was delisted from the UK Sanctions List. Ms. Chubarova was first designated on 19 May 2023 for her role as the Head of Corporate Finance at Gazprom Neft, a government-affiliated entity carrying on business in the Russian energy and extractives sector – a sector of strategic significance to the Government of Russia.

On 26 February 2025, the UK Government announced the delisting of Swiss national Edouard Francois Mauron, a Geneva-based oil trader, who was first designated on 8 November 2023 on the basis that he was involved in obtaining a benefit from or supporting the Government of Russia by working as a director or equivalent of an entity that is carrying on business in the Russian energy sector.

On 7 March 2025, the UK removed two entries from the UK Sanctions List: (i) Rosbank PJSC (Rosbank) and (ii) Active Denizcilik Ve Gemi Isletmeciligi Anonim Sirketi:

• Rosbank was designated on 19 May 2023 for being or having been involved in obtaining a benefit from or supporting the Government of Russia by carrying on business in a sector of strategic significance to the Government of Russia, namely the Russian financial services sector. As of 1 January 2025, Rosbank was merged into TBank and ceased to exist. The entry in relation to TBank in the UK Sanctions List was also updated, however without any reference to Rosbank.
• Active Denizcilik Ve Gemi Isletmeciligi Anonim Sirketi was designated on 22 February 2024 for being or having been involved in obtaining a benefit from or supporting the Government of Russia by carrying on business in a sector of strategic significance to the Government of Russia, namely the Russian energy sector.

On 19 March 2025, Mr. Farkhad Akhmedov was delisted. Mr. Akhmedov was first designated on 13 April 2022 on the basis that he was involved in obtaining a benefit from or supporting the Government of Russia by carrying on business in the Russian information, communications and digital technologies sector – a sector of strategic significance to the Government of Russia. In September 2023, the EU removed sanctions against Mr. Akhmedov further to the Judgment of the General Court of the Court of Justice of the European Union.

Specific reasons or grounds for the abovementioned delistings are not made publicly available.

OFSI’s latest enforcement of financial sanctions

On 14 March 2025, OFSI published a disclosure notice identifying three charities, Sahara Hands, Peculiar People’s Palace Ministries ,and Impact Plant, under the UK’s Counter-Terrorism (International Sanctions) (EU Exit) Regulations 2019 for failure to respond to Requests for Information (“RFI”) required to assist OFSI in monitoring compliance with the Regulations. The charities were found to be in breach of Regulation 36(6) of the Regulations, having failed to respond to OFSI within the stated timeframe despite three attempts to correspond and without reasonable excuse. This enforcement action is the first by OFSI for failure to respond to RFIs and demonstrates the breadth of its powers to bring enforcement actions, on this occasion via disclosure of the charity names, against any sector and industry.

In a similar vein, on 20 March 2025, OFSI announced that it had imposed a fine of £465,000 against Herbert Smith Freehills Moscow (“HSF Moscow”), a UK LLP which operated through its branch in Moscow and was a subsidiary of Herbert Smith Freehills LLP (“HSF LLP”) at the relevant time, for breaches of sanctions. The fine was imposed in respect of six payments made by HSF Moscow for a total of £3,932,392.10 to Alfa-Bank JSC, PJSC Sovcombank and PJSC Sberbank, all of which are designated persons subject to an asset freeze. By making these payments, HSF Moscow made funds available directly to sanctioned entities. Notably, HSF Moscow closed its office in Russia on 31 May 2022 following the outbreak of the Russia-Ukraine conflict. However, the six payments subject of this fine were made over the course of a week when HSF Moscow was winding down its operations in Russia. A 50% reduction was applied to the fine after HSF LLP voluntarily disclosed the breach and OFSI noted in the press release that the parent company (HSF LLP) was at no fault.