In the latest edition of our Sanctions Watch weekly digest, we present significant updates on sanction watchlists and regulatory developments.
The European Union has implemented its 12th package of sanctions against Russia, targeting various sectors and entities. Starting from January 1, 2024, the EU will prohibit the import of non-industrial natural and synthetic diamonds from Russia. The ban will extend to diamonds processed in third countries, including jewellery, phased in from March to September 2024. Additionally, exporters to third countries are now required to contractually prohibit the re-exportation of sensitive goods and technology to Russia. Designations and trade sanctions include 61 individuals and 86 entities, spanning the Russian military, defense sectors, Belarusian individuals, Russian businesspersons, and entities in the Russian IT sector. Import restrictions cover items like chemicals, lithium batteries, and machinery parts, while enforcement measures involve transit bans, restrictions on crypto-asset services, and notification requirements for fund transfers outside the EU. The EU has also strengthened measures related to oil price caps, iron, and steel imports, including the addition of Switzerland as a partner country with an iron and steel import ban.
The Office of Financial Sanctions Implementation (OFSI) has recently revised the General Licence related to humanitarian activities in Israel and the Occupied Palestinian Territories. The update includes the addition of the Disasters Emergency Committee as a Relevant Person. Moreover, there are amendments to the definition of a UK Funded Person, bringing more clarity to reporting requirements and specifying the geographical extent of the General Licence. These changes aim to enhance the regulatory framework surrounding humanitarian efforts in the region. Organizations involved in such activities should take note of these modifications to ensure compliance with the updated guidelines outlined in General Licence INT/2023/3749168.
The United States and the United Kingdom are strengthening regulations on the shipment of Russian oil to bolster the effectiveness of the Group of Seven (G7) price cap aimed at reducing Kremlin revenue from crude. New rules mandate companies involved in shipping Russian oil to provide specific documentation for each voyage demonstrating compliance with the price cap. The “price cap coalition,” including the G7 nations, the European Union (EU) and Australia is issuing similar detailed guidance to thwart Russia from exploiting services like insurance without adhering to the price restrictions. The updated regulations allow insurers and service providers to demand cost information about oil contracts that include additional expenses. The move aims to prevent companies from evading restrictions by pricing oil under the cap and recovering funds through inflated fees for shipping and other associated costs. These measures, introduced in December, seek to demonstrate that concerted efforts can effectively limit Russian oil prices and deny revenues to the Kremlin.
Japan, a G7 nation, has decided to join the ban on importing non-industrial diamonds from Russia, aligning with international efforts for peace amid the Ukraine crisis. Despite the symbolic nature of this move, as Japan’s total imports of such diamonds were under $400,000 in 2022, the decision underscores the country’s commitment to global solidarity. The Japanese government, in a broader set of sanctions, aims to address the “current international situation over Ukraine” and contribute to international peace. In 2022, Japan’s total imports of polished diamonds were $544 million, significantly less than the US, which imported almost $25 billion. Japan’s stance reflects its dedication to unwavering solidarity with Ukraine, particularly notable in a region where some governments have hesitated to take a clear position.