..., it is estimated at more than 2 thousand cases. The geography of such investigations has also expanded significantly. Pinpoint criminal proceedings in Germany and the Netherlands until 2022 gave way to a broad practice of monitoring compliance with sanctions in almost all EU member states.
Ivan Timofeev:
Secondary Sanctions Against Russia's Partners Abroad: From Definition to Facts
2. The lack of transparency in EU sanctions legislation creates additional risks for Russian and foreign entities when conducting business under the EU’s jurisdiction.
The ...
... third countries who interact with a country or persons already under sanctions, or participate in circumventing them. Accordingly, primary sanctions are those that are applied to persons in the jurisdiction of the target country, for example, Russia. Secondary sanctions are usually introduced in the form of blocking financial sanctions. They are applied against targeted individuals or legal entities. Blocking sanctions involve freezing the assets of these persons and prohibiting virtually all transactions with them. Secondary sanctions differ from administrative and criminal ...
... also features branches of leading Russian banks located in Beijing, Mumbai, New Delhi and Hong Kong. It seems that banking hiccups for Russian counterparties are becoming an unhealthy practice of “friendly” nations as a protective measure against secondary sanctions. Meanwhile, the blocking of Russia’s international settlements may have ambiguous grounds. A more comprehensive analysis of the motives behind the tightening of sanctions is required to understand them and identify potential solutions.
Who is to blame?
Ivan Timofeev:
Eurasia’s Security System: The Economic Aspect
It can be argued that the main reason for today’s geopolitical tensions in the world is the ...
... carrying out transactions in favour of the Russian military-industrial complex or for certain dual-use goods. In June 2024, the interpretation of the concept of the Russian military-industrial complex was expanded to banks that were previously subject to sanctions. That is, a foreign bank risks
facing secondary sanctions
if its counterparty is any sanctioned Russian bank. Similar restrictions
appeared
in the fourteenth package of EU sanctions.
Difficulties in completing transactions, for example, through Chinese banks, or an increase in the cost of ...
... delivery to Russia. It should also be noted that the list of priority goods for export control has been expanded. Previously there were 45 items, now there
are 50 (mainly electronics)
.
Despite the fact that it is mainly small companies that are hit by secondary sanctions, the impact of sanctions on business in friendly countries should not be underestimated. For example, amendments to Executive Order 14024, introduced in December 2023, include a mechanism for imposing blocking and other US financial sanctions on financial institutions ...
... countries may face administrative and even criminal prosecution by US authorities. In other words, Washington’s blocking sanctions extend far beyond US territory. Given the still-high role of American financial institutions in the global economy, US sanctions affect many countries. Even businesses in Russia-friendly jurisdictions are forced to take the threat of secondary sanctions seriously—that is, being added to the list of blocked persons for transactions with people and structures already on this list. The risks of being involved in criminal and administrative investigations are also taken seriously, at ...
Such sanctions are unlikely to ensure the blockade of Russia desired by the Western initiators. This was not achieved even with respect to Iran, whose economy is smaller than Russia's
Another package of US sanctions has caused a stir in connection with restrictive ...
... correspondence of the participants in the transaction, as well as signals to the authorities from the manufacturing companies, which were contacted by the accused Russian citizens and their partners.
Along with criminal cases, the number of cases of secondary sanctions, that is, blocking financial sanctions for transactions in favour of previously blocked persons, is also growing. Since the beginning of 2023, the US Treasury has imposed such sanctions on people from China, India, Armenia, Kyrgyzstan, Switzerland, Liechtenstein and a number of other ...
... prosecutions. In the first case, the US Treasury simply imposes blocking sanctions on individuals and entities that are suspected of circumventing sanctions. Such measures were widely used against Russian counterparties abroad under all large packages of US sanctions in 2023. Citizens and companies from India, China, the United Arab Emirates, Switzerland, Liechtenstein, Cyprus, Malta, etc. fell under secondary sanctions. In each such case, the Americans had no problems with the official authorities of these countries. By default, it is understood that these persons acted at their own peril and risk, and not on the order of the government in their ...
... policy problems. Unlike the EU, the US has many more tools with which to influence business. Given the role of the US dollar in world trade, the size of the US market, and the concentration of a wide range of technologies in their hands, the threat of secondary sanctions and trade restrictions from their side is perceived as more serious. In addition, the US authorities have many precedents of administrative and criminal prosecution for violation of their sanctions regimes. Unlike the EU, where this practice is only being developed.
Ivan Timofeev, Dmitriy Kiku:
New Stage of EU Sanctions Policy: Extraterritorial Measures
Of course, the presence of a “big brother” like the United States is unlikely ...
