New Russian Counter-Sanctions – Special Measures against Blocked Persons


Legal Basis

Federal Law No. 422-FZ of 04.08.2023 "On Amendments to Certain Legislative Acts of the Russian Federation" has introduced important amendments to Federal Law No. 281-FZ of 30.12.2006 "On Special Economic Measures and Coercive Measures" (hereinafter - the "Special Measures Law"). The amendments will enter into force in February 2024. 

Blocked Persons

The new law introduces the definition “blocked persons” for persons against whom special economic measures are applied (hereinafter - “Blocked Persons”). Blocked Persons shall be foreign states, foreign companies, foreign citizens, and stateless persons named in the list of Blocked Persons provided in the Decree of the Government of the Russian Federation No. 851 of 11.05.2022, and legal entities controlled by them.  Currently the list contains 106 companies from the EU, USA, Switzerland, Singapore, which are active in the weapon production and gas industry, including Gazprom Germania GmbH and Astora GmbH (both from Germany) and TCI International (USA). 

Special Economic Measures

According to the current version of the Special Measures Law, Russian authorities are allowed to impose the following special economic measures against Blocked Persons:

  1. Suspension of all programs in the field of economic, technical assistance, as well as programs in the field of military-technical cooperation;
  2. Prohibition of the commission of financial transactions with respect to the blocked persons and (or) freezing (blocking) of funds and (or) other property belonging to the blocked persons, as well as financial transactions performed in the interests and (or) in favour of the blocked persons;
  3. Prohibition or establishment of restrictions on the foreign economic transactions;
  4. Termination or suspension of international trade agreements and other international agreements of the Russian Federation in the field of foreign economic relations;
  5. Change of export and (or) import customs duties;
  6. Prohibition or restriction of the entry of vessels into the ports of the Russian Federation and the use of the airspace of the Russian Federation or its individual regions;
  7. Establishment of the restrictions on the implementation of tourist activities.

In the new version of the Special Measures Law, the following new measures are added: 

  1. Restriction of financial transactions; 
  2. Freezing (blocking) of funds and (or) other property belonging to Blocked Persons; and 
  3. Prohibition of financial transactions carried out in the interests and (or) in favour of Blocked Persons. 

The aforementioned measures can be introduced by the Central Bank of Russia once the relevant persons are designated as Blocked Persons by the Government of the Russian Federation upon decision of the President of the Russian Federation. The Central Bank of Russia issues the corresponding instructions to Russian banks, which in their turn implement such measures.