New Ukraine sanctions announced — US, EU and Canada take action

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By Christopher R Wall, Stephan E Becker, Nancy A Fischer and Aaron R Hutman

In response to political developments in Ukraine and Russian military action in Crimea, the US and the European Union (EU) announced new sanctions on 6 March 2014. Canada issued its sanctions on 5 March 2014. The US executive order authorised the Treasury Department to block the assets of persons determined to have engaged in certain destabilising conduct or misappropriation of state assets in Ukraine. The executive order also provided for the potential denial of visas. The US has not yet made any designations under its sanctions and is not expected to do so immediately, but has issued anti-money laundering guidance concerning the accounts of 18 members of the former Ukraine regime, including ex-president Viktor Yanukovych. The EU and Canada imposed an asset freeze against these former Ukraine regime officials.

The US, the EU and Canada are deploying sanctions in an attempt to influence Russian behaviour in Ukraine and to support the new Ukraine government by helping it pursue assets misappropriated by former regime officials and cronies. At present, the US sanctions are only a framework, since there have not been any sanctions designations. Trade, investment, banking and commercial activity with Ukraine and Russia remain lawful.

The EU designations imposed under Council Regulation No. 208/2014 and the Canadian designations under the ‘Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations’ (SOR/2014-44) go further in actually freezing the assets of 18 former Ukrainian government officials and their close associates who are subject to criminal prosecution in Ukraine. The EU regulation does, however, provide for limited exceptions such as payments due under contracts concluded before the date of designation…

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