Russia: Slew of Sanctions

Marking Three Years of War & Sanctions

In our recent webinar, IFI Associate Managing Director Nicki Kenyon and Pavel Verkhniyatski, the founder of corporate due diligence firm COSA Intelligence Solutions, discussed the changes in the Russia sanctions environment that took place in 2024, explored possible developments in 2025, and addressed audience questions about sanctions, policy, and best practices.

To mark the third anniversary of Russia’s full-scale invasion of Ukraine, the EU, the UK, Canada, Australia, and New Zealand imposed some of the harshest sanctions against Russia since Moscow started the war in 2022.

• The EU has adopted its 16th package of sanctions to further restrict Russia’s economic and military support for the war on Ukraine. New measures included banning 74 additional vessels linked to Russia’s shadow fleet, which evade the $60 per-barrel price cap on Russian oil, transport military equipment, or carry stolen Ukrainian grain. The EU also imposed tighter export controls on 53 entities, including those in China, India, and Türkiye, for aiding Russia’s defense sector.
• The UK announced 107 new sanctions against Russia to mark the grim anniversary. Targets included Russian military suppliers based in Central Asian states, Thailand, India, and China. The UK also sanctioned North Korean Defense Minister No Kwang Chol and other North Korean generals and senior officials complicit in deploying forces to support Russia. Kyrgyzstan-based OJSC Keremet Bank was also sanctioned for helping Russia use the global financial system to support its war efforts. Keremet Bank was sanctioned by the United States in January 2025.
• Canada announced new sanctions targeting 76 individuals and entities involved in Russia’s military-industrial sector. The latest measures designated senior Russian government officials and oligarchs who continue to support the government of President Vladimir Putin. Canada also imposed sanctions against 109 vessels involved in transporting sanctioned goods that fund the Russian war machine.
• Australia imposed new financial sanctions and travel bans on 70 individuals and entities, making it the country’s largest package of restrictive measures against Russia since February 2022. The measures target individuals supporting Russian control of eastern Ukraine and Crimea, including officials, judges, and those involved in forced deportations of Ukrainian children. Sanctions also apply to those supporting military ties between Russia and North Korea and entities in Russia’s defense, transport, and finance sectors, as well as individuals spreading Russian disinformation.
• New Zealand’s sanctions targeted 52 individuals and entities involved in Russia’s military-industrial and energy sectors. New Zealand has designated 1,800 individuals and entities since March 2022.

An audience member mentioned that the United States had not issued a significant tranche of sanctions to mark the third anniversary of Russia’s full-scale attack. What does this mean for the future of U.S. sanctions policy against Russia?

Our panelists reminded the audience that all the sanctions imposed on Russia by the Biden administration, and by the first Trump administration are still in effect, and there’s a lot of uncertainty, given the Trump administration’s new foreign policy priorities and objectives. However, President Trump recently has extended the state of emergency over the situation in Ukraine, which was first declared in 2014 by then-President Obama, until March 6, 2026.

2024: A Year of Complexities

In 2024, various countries imposed more than 5,600 individual designations on Russian individuals, entities, vessels and aircraft. In addition to significant designations that included Russian diamond mining company Alrosa and Russia’s until-recently unsanctioned Gazprombank—which Moscow uses to pay its military and provide survivor benefits to families of soldiers who died in Ukraine—the United States, the UK, and the EU also expanded their extraterritorial authorities to stem Russian sanctions evasion.

• Secondary sanctions in 2024 became a real threat for foreign financial institutions that transact with Russia’s defense sector. The U.S. Treasury in June expanded its definition of Russia’s military-industrial base to include any entity sanctioned under Executive Order (EO) 14024, which added a secondary sanctions risk to anyone designated pursuant to that EO.
• The EU, which has never been a fan of U.S. secondary sanctions because of their extraterritorial nature, in 2024 expanded the bloc’s designation authorities to target entities outside their jurisdictions.
• The UK in 2024 also tightened sanctions against Russia to allow the UK government to designate foreign financial institutions that facilitate transactions on behalf of, or in support of specified sectors of strategic significance to the Russian government, even if those institutions are outside the UK’s jurisdiction. This new regulation mirrors U.S. secondary sanctions, which authorize the Office of Foreign Assets Control (OFAC) to impose secondary sanctions against foreign financial institutions that conduct significant transactions with Russia’s military-industrial sector, even if there is no U.S. nexus.

Nicki Kenyon discussed a timeline of major events in the sanctions sphere that included the EU’s requirement that all exporters to insert a “no-re-export to Russia” clause into their contracts for restricted products such as aircraft, arms, and other common high priority items. The clause must prohibit reexport of the relevant goods, technologies, and items to Russia, as well as for use in Russia, and contain consequences in the event of violations.

Global partners also started sanctioning Russian propaganda, hybrid operations, Russian sanctions evasion, cooperation with North Korea and Iran, and the so-called “shadow fleet,” which Russia uses to evade the $60 per-barrel price cap and transport restricted goods to Russia.

The EU also changed its definition of “ownership” last year for the purpose of defining entities that may not be included on sanctions lists but are considered legally designated. Kenyon mentioned that the EU now defines ownership as being in possession of 50 percent or more of the proprietary rights of an entity, matching OFAC’s “50 percent rule.” Before this update, the ownership threshold was more than 50 percent, and it remains at that threshold in the UK.

Practical advice

Nicki Kenyon and Pavel Verkhniyatski took on audience questions, which included concerns about Russia’s creative and effective ways to evade sanctions, Russia’s use of cryptocurrencies to evade sanctions, assessing secondary sanctions risks, and the risks of establishing business relationships with Russian companies.

Verkhniyatski mentioned that every inquiry and report requested by clients seeking due diligence research includes a question about whether there’s any connection of the potential client or business partner to Russia or Belarus—research that is included by default. He mentioned geographic risk as something to be aware of, because numerous countries, such as the UAE, Türkiye, China, and others are being used by Russia to evade sanctions.

Our speakers emphasized that the involvement of risky geographies doesn’t necessarily indicate wrongdoing, but extra research into Russian and Belarussian involvement is being done by default, including affiliations and beneficial ownership. More and more human intelligence is being used in due diligence research, according to Verkhniyatski, which wasn’t always a major component of COSA’s work, but given Russia’s use of shell companies, close associates, and family members to evade sanctions, human sources provide critical insights.

Kenyon and Verkhniyatski both noted that Russia likes to use tried-and-true methods to evade sanctions, such as transshipments through third countries and our speakers recommended a responsible approach to due diligence, digging deeper into end users, links to sanctioned entities, and beneficial ownership, as well as applying extra scrutiny to risky jurisdictions known for being used by Russia to evade sanctions and other restrictions.

In response to a question about Russia’s use of digital assets to evade sanctions, Kenyon noted that Russia’s use of cryptocurrencies to evade sanctions is on the rise.

• OFAC a year ago, recognizing the threat of sanctions evasion using digital assets, designated 13 firms and two individuals operating in blockchain-based services that facilitated virtual currency payments for the Russian financial sector.
• The Wall Street Journal last year reported that Russia has used the stablecoin Tether to finance weapons purchases and parts for weapons systems.
• OFAC in late 2023 sanctioned a Russian facilitator—Ekaterina Zhdanova—for moving funds for Russian elites using digital assets.

Click here for insights about what financial institutions should know about Russia’s use of digital assets to evade sanctions and examine some mitigation measures.

Conclusion

In this webinar, Kenyon and Verkhniyatski engaged heavily with the audience, addressing questions, comments, and concerns. They also discussed the aspects of risk and provided some insights into tools and resources that can be used to assess the risk of doing business with Russian individuals or entities.

After three years of sanctions and war, our experts discussed what sanctions could be most effective in the future, such as possible designations of Russia’s nuclear and titanium industries.

If you missed the webinar, you can access the recording here, and be sure to register for our next webinar, which will focus on the convergence of sanctions and financial crimes compliance.