Out-Law News | 19 May 2014 | 2:18 pm | 2 min. read
And companies in the oil, gas and financial sectors should be particularly vigilant as entities in those areas of commerce are increasingly targeted said Tom Stocker, of Pinsent Masons, the law firm behind Out-Law.com.
Stocker made his comments after the European Union extended its sanctions against Russia due to its activities in neighbouring Ukraine which the EU and the US say have undermined the sovereignty of the Ukraine. The EU has now added an additional 13 people to the list of individuals against whom it has imposed sanctions, along with two companies, both of which are involved in the development of oil and gas deposits.
The EU and the US have also since said that Russia could also face sectoral sanctions if it disrupts Ukraine presidential elections due to take place on 25 May, a US official told Reuters.
"The challenge for businesses is that on a regular basis, almost every second or third week, names are being added to the sanctions lists," Stocker said. "A contract that was lawful to fulfil one day can literally be unlawful to fulfil the next. The direction of travel is clearly towards sanctioning entities in the oil and gas sector and financial services."
Stocker has previously said that companies which fall foul of sanctions restrictions can face "eye-watering" penalties.
The EU and US first froze the assets of and issued travel bans to a number of Russians and Ukrainians in March following a referendum in Crimea in which officials said 97% of voters voted to break away from Ukraine and join Russia. The EU and US deem the referendum to be illegal and imposed sanctions which targeted individuals they alleged to have played an important role in the referendum.
Both the EU and the US added to their sanctions lists in April, saying that Moscow had failed to meet its obligations set out in a peace agreement designed to calm tensions in eastern Ukraine. Australia and Canada have also imposed sanctions.
Now the EU has extended the criteria for designation on its sanctions list to include "Natural persons responsible for actively supporting or implementing actions or policies which undermine the territorial integrity, sovereignty and independence of Ukraine, or the stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine".
Stocker said: "This includes any legal persons, entities or bodies associated with such persons."
The designation criteria under EU sanctions has also been extended to include "Legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law" and any bodies that benefit from such a transfer.
The list of designated persons has also been updated to include an additional 13 individuals, most of whom are politicians, military leaders, members of law committees, heads of the migration service and prosecutors.
Sanctions have also been imposed against two companies, both of which are involved in the supply and development of oil and gas deposits.
After the latest sanctions were imposed by the EU, a US state department official told Reuters that US Secretary of State John Kerry had briefed a number of EU countries of US thinking on possible sanctions should it be agreed that Moscow disrupts the 25 May presidential election. Sanctions could be imposed on new investment in sectors including mining, banking, gas and defence, the official told Reuters.