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Russia sanctions a year on: Impact, evasion, and what it means for business

Penelope Jenkins, Patrick McGovern 5 April 2023
5 April 2023    Penelope Jenkins, Patrick McGovern


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A year on from Russia’s invasion of Ukraine, Penelope Jenkins, Senior Associate, and Patrick McGovern, Senior Analyst, reflect on the scale of the sanctions imposed on Russia, and analyse their impact. Finally, they consider how organisations have responded to the changing sanctions landscape. 

In total, over 30 allied nations across the world have levied the most coordinated and wide-ranging economic restrictions ever seen. Taking a high-level view, nations sanctioning Russia – led by the US, EU nations, the UK, Australia, and Japan – now represent over two-thirds of global GDP. 1 The detailed data shows that from 22 February 2022 to 10 March 2023, over 10,000 list-based sanctions were imposed by Australia, Canada, the EU, France, Japan, Switzerland, the UK, the US, and Ukraine on Russia, comprising an historic 10,608 restrictions on individuals, 3,431 restrictions on entities, 492 on institutions, and 3 on vessels.2 And hardly any sector has been spared, with sanctions covering a broad spectrum including the oil and gas, banking and finance, technology, aviation, manufacturing, energy, shipping and logistics, media, mining, FMCG, and luxury industries.3 In total, over 1,000 businesses have curtailed their Russian operations since February 2022.4  
This table shows how the sanctions have built up over the past year and how they reflect key moments in the war. But the economic and geopolitical story is far from over. Sanctions pressure on Russia continues to increase as the predicted spring offensive begins and Western nations face increasing internal and external pressure to increase military and financial support for Ukraine.


Are sanctions having the desired impact?  

The effect of international sanctions on Russia has been significant over the course of the year, with estimated domestic inflation increasing sharply to almost 14% and the Moscow Exchange main index falling by over a third. Putin has been keen to highlight that Russian GDP has still grown slightly, but this is a thin sliver of optimism compared to the wider pressure prompted by sanctions regimes. Perhaps more worrying for Russia is the mass emigration of well-qualified professionals, a “brain drain” which is sure to cause long-term damage to the Russian economy that is yet to fully manifest. 

However, in the short-term at least, Russian exports of many sanctioned goods have prevailed. An investigation by the Organised Crime and Corruption Reporting Project found that Russian timber has been exported to Central Asia where it has been relabelled as being of Kazakh and Kyrgyz origin and subsequently re-exported to the EU. Also, the price cap on seaborne Russian oil products has allowed the country to continue exporting its crude at prices initially capped at USD 60 per barrel, to countries other than those that have imposed sanctions. The Russian government announced in March 2023 that redirecting its oil exports to such “friendly” countries has meant it has not suffered a loss in sales.  

Russia has also pivoted towards China, the UAE, and Turkey to continue importing goods that it can no longer obtain from the EU or US. However, in doing so, many commentators have noted that Russia has become increasingly dependent on China and its economy is being reoriented towards the Chinese market. The surviving trade may have been enough to keep the Russian economy afloat, but it is starting to feel the impact of sanctions more as international efforts to enforce sanctions have continued to ratchet up.  

The US recently designated more than 30 non-Russian individuals and companies for facilitating the evasion of Russia sanctions. These notably included a Swiss-Italian businessman and three of his European associates. It also issued guidance to help businesses identify signs of sanctions evasion. US, EU, and UK officials lobbied the UAE to introduce restrictions on re-exports to Russia, while Kazakhstan announced the introduction of an online system designed to crack down on sanctions evasion in the form of re-exports to Russia by tracking all goods crossing its borders. In March 2023, it was widely reported that Turkish customs officials were preventing the transit of certain sanctioned goods from Turkey to Russia, following pressure on the Turkish government by the US and the EU. At this stage, no official law or regulation appears to have been passed by the Turkish government concerning the transit of sanctioned goods from Turkey to Russia, and the restrictions do not appear to affect direct trade between the two countries, as opposed to goods transiting through Turkey. Nonetheless, such developments indicate that countries which have not traditionally imposed sanctions, such as Kazakhstan and Turkey, could begin to support the enforcement of western sanctions on Russia – an important step in strengthening western sanctions regimes. 


Business response  

The large-scale introduction of new sanctions against Russian persons in 2022 prompted organisations to review their existing counterparties en masse, to understand not just whether corporate entities are sanctioned, but whether they might be controlled by sanctioned individuals.   

Sanctions regimes have recognised the widespread use of proxy shareholders in Russia as aiding the originally designated individual to circumvent sanctions, so provision has been made for governments to also designate the given proxy as sanctioned. But, where corporate databases and media reporting once shed light on these structures and dynamics, investigators have had to turn to their local networks of contacts on the ground owing to Russia’s introduction of legislation to exempt over 10,000 entities from corporate disclosure obligations (thereby removing open access to governance structures). 

Increasingly stringent sanctions provisions have led to a proliferation of creative sanctions evasion tactics. For example, international shipping data shows that traders outside of Russia have exported Russian-origin oil to countries outside the remit of western sanctions, such as India and China, which is permitted under the price cap. In some instances, this oil has reportedly been mixed with non-Russian oil at refineries in its initial destination country and relabelled as originating from this transit country. Having been “laundered”, it has then been re-exported to the US and Europe as non-Russian oil. And in the context of importing goods into Russia, a counterparty’s operations in “friendly” countries such as Kazakhstan, the UAE, and Turkey have emerged as a risk factor for Russia sanctions as brokers in these jurisdictions have helped keep Russia supplied with goods subject to sanctions.  

With the EU signalling that it is considering punishing sanctions violations with fines totalling at least 5 percent of a company’s global turnover, organisations increasingly view their exposure to Russia sanctions not in the vacuum of their Russian counterparties, but rather as potentially arising from their non-Russian partners’ international operations. 

In order to navigate the complexity of sanctions exposure, organisations must double down on their due diligence. Whether looking across existing supply chains or considering new deals, care is needed to avoid unwittingly violating sanctions. S-RM and other firms such as ours play a key role in supporting businesses as they navigate the sanctions landscape and we continue to monitor the evolving Russia sanctions regimes to best serve our clients. 


28 February 2022 Central Bank of Russia blocked from accessing more than USD 400 billion in foreign-exchange reserves held abroad.5 

1 March 2022 French finance minister Bruno Le Maire reported that the total amount of Russian assets being frozen by sanctions amounted to USD 1 trillion.6 

2 March 2022 EU excluded seven Russian banks from SWIFT.7 

Visa, Mastercard and American Express announced they were blocking Russian banks from their payment networks.8 

8 March 2022 US President Joe Biden ordered a ban on imports of oil, gas and coal from Russia to the US.9 

9 March 2022 EU introduced expanded sanctions against the Belarusian financial sector as well as reducing financial inflows from Belarus to the EU 

April 2022 The Insider claims that the total value of yachts impounded throughout Europe was over USD 2 billion.10 

April 2022 US, G7, and EU imposed new and more severe sanctions against Russia in response to an escalation of military violence by Russia, and in particular the reported massacre of civilians in the Ukrainian town of Bucha. This included a ban on new investment in Russia, as well as full blocking sanctions on Russia’s largest financial institution, Sberbank, and Russia’s largest private bank, Alfa Bank.11 

June 2022 EU adopted its sixth package of sanctions against Russia, which included a ban on imports from Russia of crude oil and refined petroleum products and a SWIFT ban for an additional three Russian banks and one Belarusian bank. These sanctions were also in response to widely reported Russian war crimes committed in Bucha and Mariupol.12 

26 July 2022 EU renewed its sanctions against Russia for a further six months.13 EU extended its sanctions against trade, finance, technology, and other industries in Russia by another six months in January 2023.14 

October 2022 UK and EU imposed sanctions against Iranian individuals and businesses responsible for supplying Russia with kamikaze drones used in the war against Ukraine.15 US brought in similar measures in November.16 

28 November 2022 EU added the violation of sanctions to the list of EU crimes.17 

3 February 2023 G7, EU, and Australia set caps on the price of seaborne Russian oil products in order to reduce revenue streams generated from inflated global oil prices funding Russia’s war in Ukraine, while ensuring that third countries can continue to secure affordable oil.18 

24 February 2023 On the one-year anniversary of the invasion, the US sanctioned over 30 non-Russian individuals and companies for their facilitation of sanctions evasion. It also designated at least ten Russian financial institutions to which Russians had turned after the larger ones became sanctioned.19 

EU approved its 10th sanctions package.20 

17 March 2023 The International Criminal Court (ICC) in The Hague issued arrest warrants for President Putin and Russia’s children’s rights commissioner over the “unlawful deportation” of Ukrainian children.21 


To discuss this article or other industry developments, please reach out to one of our experts.

Penelope Jenkins
Penelope jenkins Senior Associate Email Penelope
Patrick McGovern
Patrick mcgovern Senior Analyst Email Patrick


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