Ukraine imposes a new set of individual anti-Russian sanctions

On 19 October 2022, the President of Ukraine issued Decrees # 726/2022 and 727/2022 (the “Decrees”), approving lists of individuals and legal entities subject to sanctions in Ukraine.

According to the Decrees, 2,507 individuals and 1,374 legal entities have been sanctioned within the framework of the Law of Ukraine “On Sanctions”. A broad spectrum of restrictions prescribed by Ukrainian law has been applied to the sanctioned persons and entities.

Due to the latest changes in Ukrainian law (the Law of Ukraine “On amendment of different Laws of Ukraine regarding improvement of sanctions’ efficacy in relation to assets of certain individuals”) above developments may further lead to the Ministry of Justice applying to Ukrainian court seeking confiscation of assets owned, directly or indirectly, by sanctioned persons and entities in Ukraine.

Sanctions imposed under Ukrainian law may also be a formal reason for initiating criminal investigations against sanctioned persons and/or entities owned, directly or indirectly, by such persons with possible negative consequences (searches, freezing bank accounts, corporate rights or goods).

Additionally, sanctioned persons and entities may face numerous restrictions in other jurisdictions due to the fact that Ukraine applies sanctions to them. Such restrictions may be applied by state authorities (in the course of their cooperation with Ukrainian authorities), banks and insurance companies, as well as other business partners within their compliance and KYC checks and audits.

Sanctioned persons and entities, as well as companies owned or controlled by them, may also face significant delays when making payments, entering into contracts, etc., which can negatively impact their counterparties and partners.

Therefore, it is crucial to have a proactive approach to sanctions checks to avoid significant financial and reputational damage. Considering the dynamic nature of sanctions regulations in different jurisdictions, it is advisable to make regular sanctions checks of counterparties and sanctions reviews of the contemplated transactions.