Sanctions Weekly Update – Ukraine/Russia Conflict – July 17, 2023 | Perspectives & Events

IV. RUSSIA/UKRAINE SANCTIONS

• Russia Warns Shipping In Danger After Quitting Black Sea Grain Deal: This week, Russia said that it would no longer guarantee the safety of shipping in the northwestern Black Sea after quitting a year-old deal that allowed Ukraine to export tens of millions of tons of grain. The Black Sea grain deal had offered an economic lifeline both to Ukrainian farmers and food-insecure nations hit by turmoil on agricultural markets. Read more >>
• Ukraine Threatens Russian Ships In Black Sea: Ukraine on Thursday warned that all ships sailing to Russian-controlled Black Sea ports could be targeted by attacks — a response by Kyiv to Moscow’s threat against civilian vessels traveling to Ukrainian seaports. Kyiv’s defense ministry said in a statement that such vessels “may be considered by Ukraine as carrying military cargo with all the corresponding risks” from midnight Friday. Read more >>
• Ukrainian Central Bank Moves To Nationalise Ukrainian Sense Bank (Previously Known As Alfa-Bank Ukraine): Ukraine’s central bank on Thursday placed a top commercial lender co-owned by Russian oligarch Mikhail Fridman under administration, and appealed to the government to nationalise it, citing links to the Kremlin and its full-scale invasion. “A decision was made to withdraw joint stock company Sense Bank from the market,” the National Bank of Ukraine said in a statement. Read more >>
• Russia Tightens Exit Rules for Foreign Businesses: Russian authorities have drafted a 10-point list of requirements that would complicate foreign businesses’ exit from and potential return to Russia. Foreign companies are barred from including buyback options on the sale of their Russian assets for two or more years. Another commission rule requires new owners to place up to 20% of the purchased assets on the Russian stock market within a year and finish the listing within three years. Read more >>

V.  Other Notable Developments

• Canada Announces New Round of Sanctions Against Russian Celebrities and Wagner Group Members: On July 20, Canadian Foreign Affairs Minister Melanie Joly announced that the Canadian federal government is further imposing sanctions on 38 individuals and 25 entities alleged of supporting Moscow’s invasion of Ukraine and mercenary violence in Africa, according to reports.  The list reportedly focuses on the paramilitary Wagner Group, which has sent combatants to Ukraine and across Africa; as well as Russian’s nuclear, drone and cultural industries, in response to the country’s attacks on Ukraine’s nuclear and cultural sites.  Those sanctioned also include Russian actors and singers.  Read more >> and Read more >> 
• Australia Imposes Additional Sanctions in Response to Russia’s Invasion of Ukraine: On July 20, Australian Minister for Foreign Affairs Penny Wong announced that Australia is imposing targeted sanctions on 35 entities and 10 individuals in Russia and Belarus.  The entities and individuals sanctioned are said to be of economic and strategic significance to Russia, such as Russian companies supplying the Russian military, Russian entities involved in nuclear energy and Arctic resource extraction, major Russian defence entities including Russia’s largest producer of military helicopters and its CEO, as well as senior Russian and Belarusian officials.  Read more >>
• Japan to Ban Used Car Exports to Russia as Part of Extra Sanctions: On July 18, Kyodo News reported that Japan is set to ban the export of used cars to Russia as part of additional economic sanctions on the country over its invasion of Ukraine, sources close to the matter said.  While Japan has prohibited shipments to Russia of luxury vehicles worth more than 6 million yen ($43,000) since April 2022, sources said the planned additional sanctions are also expected to cover cars with gasoline or diesel engines exceeding 1,900 cc, as well as electric and hybrid vehicles.  The move to restrict exports of used Japanese cars, which are in high demand in Russia, aims to enforce the effectiveness of embargoes on Moscow by keeping in step with EU and U.S. measures.  Read more >> 
• IOC Says It Will Not Invite Russia and Belarus to the Paris 2024 Olympics: On July 14, the International Olympic Committee (IOC) announced that teams from Russia and Belarus will not receive formal invitations to participate in the 2024 Olympic Games in Paris due to the two nations’ aggression towards Ukraine, according to reports.  The IOC, however, has yet to decide whether to allow individual athletes holding Russian or Belarusian passports to participate in the Paris 2024 Olympics, saying that it “will take this decision at the appropriate time, at its full discretion, and without being bound by the results of previous Olympic qualification competitions.”  Read more >>
• Argentina Rejects Russia-Sourced LNG Cargo, Diverts Vessel Back to Sea: On July 19, Bloomberg reported that Argentina’s state-run energy company refused to accept a cargo of liquefied Russian natural gas it had agreed to buy, forcing the tanker back out to sea.  Argentina’s economy minister Sergio Massa said in a local media interview that officials blocked delivery of the fuel “because it violates the contract because it’s a sanctioned company,” despite the country not adopting any sanctions against Russia.  Gunvor Group Ltd., the trading house that made the delivery, said the shipment of LNG was lawful and transparent, and the transaction “complies with all applicable economic sanctions, specifically those of the United States and the European Union.”  Read more >>
• Kyrgyzstan Denies Helping Russia Bypass Sanctions: On July 20, Kyrgyzstan denied helping its ally Moscow circumvent sanctions imposed over its invasion of Ukraine, but did not rule out the involvement of private companies, according to reports.  According to Kyrgyzstan’s security agency, neither the state or any state structures or companies are involved in the violation of sanctions regime imposed by the West, though it admitted that private companies might have violated sanctions while “possibly not knowing who the end customer and user of their supplied products may be,” adding that an investigation has been launched to “establish[] and stop[] such activities.”   A number of Kyrgyz entities were put under sanctions by the U.S.’s OFAC on July 20, 2023, for facilitating the flow of controlled foreign-made electronics and technology into Russia. Read more >>
• South African Official Says BRICS Currency Not on August Summit Agenda: On July 20, reports emerged that a BRICS currency will not be on the agenda of the bloc’s summit in South Africa next month, but Brazil, Russia, India, China, and South Africa will continue to switch away from the U.S. dollar, according to a South African senior BRICS diplomat.  Brazil’s President Luiz Inacio Lula de Silva and Russian foreign minister Sergei Lavrov are among BRICS leaders that touted the idea of a common currency as the bloc aims to challenge the western dominance of global finance amid Russia’s sanctions-imposed exile after it invaded Ukraine last year, pushing countries, especially non-U.S. allies, to seek alternatives to the dollar, but India’s foreign minister had said earlier this month that currencies would remain “very much a national issue for a long time to come.”  Read more >>
• SLB Announces Halting of All Shipments to Russia: On July 14, top oilfield services firm SLB announced that it is halting shipments of products and technology into Russia from all its operations over an expansion of Western sanctions, according to reports.  The firm, being the world’s largest oil service and equipment provider, had been one of the few providers to continue working the country’s oil sector following Russia’s invasion of Ukraine, but would now apply the Russia ban to all its worldwide operations not limited to the UK, US, EU and Canada, “in response to the continued expansion of international sanctions.”  Read more >>
• JP Morgan Says Client Shares in Russia’s Magnit May be Missing: On July 13, Reuters reported that JP Morgan (JPM) has become the latest major bank struggling to find Russian stocks linked to certain client investments.  In a published investor circular, the Wall Street bank said “it was actively seeking to recover” shares in Russian retail group Magnit, which underpinned depositary receipts (DRs) JPM had issued to investors before Russia’s invasion of Ukraine in February 2022.  JPM said the shares in question “may be missing” after “certain holders” cancelled their DRs twice, firstly under a business-as-usual process, and again after Moscow introduced laws on mandatory conversion of DRs to reduce foreign influence.  The shares currently unaccounted for are estimated to be less than 1% of the shares held in custody at another financial institution, according to the bank.  Read more >>
• Ryanair announces plans for post-war return to Ukraine: Low cost airline Ryanair announced on July 20 its plans to return to the Ukrainian market within eight weeks of Ukrainian air space reopening. It plans to open 75 routes from Europe to Ukraine and base up to 30 new Boeing 737 MAX aircraft worth over $3 billion at Ukraine’s main airports. Ukrainian airspace remains closed to civilian aircraft since the full-scale invasion began. Read more >>
• South African President: Putin not to attend BRICS summit: Russian dictator Vladimir Putin will not attend the upcoming BRICS summit and Russia will be represented by Foreign Minister Sergey Lavrov, South Africa’s presidential office informed on July 19. Putin’s participation at the summit has been contentious due to the arrest warrant issued against him by the International Criminal Court (ICC). Read more >>
• China Imports Record Volumes Of Russian Oil In First Half Of 2023: China is importing record volumes of oil despite a weak economy as it takes advantage of cheap Russian crude to build stockpiles and export refined products. The rise in oil imports to record levels this year comes against the backdrop of a faltering recovery in the world’s second-largest economy. Read more >>