Ukraine-Related Economic Sanctions: U.S. and EU Adopt Economic Sanctions in Response to the Current Situation in Ukraine; Additional Measures Likely if Current Situation Persists or Escalates

Sullivan & Cromwell LLP - March 19, 2014

In response to the current situation in Ukraine, the United States has issued “targeted sanctions” against certain officials of the Government of the Russian Federation and certain other designated persons and entities determined, among other things, (i) to be responsible for or complicit in, or to have engaged in, directly or indirectly, various activities, including those that undermine democratic processes or institutions in Ukraine or that threaten the peace, security, stability, sovereignty or territorial integrity of Ukraine or (ii) to have asserted governmental authority over any part or region of Ukraine without the authorization of the Government of Ukraine.  To date, 11 designations of individual persons under these sanctions have been released.  As a result, absent an exception, it is now unlawful for any U.S. person (including any U.S. branch or agency of a foreign bank) to do business with any such designated person, and any property that is in the United States or within the possession or control of a U.S. person in which any designated person has an interest must be blocked, imposing an across-the-board prohibition against transfers or dealings of any kind with regard to such property.

The United States is not alone in responding to the situation in Ukraine through economic sanctions.  On March 17, the EU instituted an asset freeze and travel ban on 13 Russians and eight Crimeans.  In addition to freezing assets, the EU measures also ensure that funds and economic resources are not made available to the targets.  These follow sanctions instituted by the EU on March 5 implementing sanctions against former Ukrainian President Yanukovych, his family members and certain government associates.  Additional measures could follow soon when EU leaders hold their next summit in Brussels.  The EU sanctions have been implemented by the UK.  Other EU and non-EU jurisdictions, including Canada, have adopted or are considering similar measures.