May 2, 2022
In our previous client alerts “US and Allies Announce Sanctions on Russia and Separatist Regions of Ukraine”, “United States Responds to the Crisis in Ukraine with Additional Sanctions and Export Controls” and “Russia’s Suppression of the Media Violates Its International Law Obligations”, as well as our “The World Reacts to the Crisis in Ukraine” webcast series offered on March 4, 2022, March 10, 2022 and March 22, 2022, we noted that Russia has imposed significant “countersanctions” against “unfriendly countries” and companies that are trying to comply with the U.S., UK, EU and other sanctions regimes against Russia and Belarus. These countersanctions can place companies that operate globally and that are committed to complying with all applicable laws in a very difficult position and may end up hastening the withdrawal of more companies from Russia.
This client alert discusses the most significant measures Russia has taken in order to counter international sanctions imposed against it.[1]
Measures against so-called “Unfriendly States”
Accurately described as countersanctions in the narrow sense, a significant category of the Russian measures is directly related to the sanctions against Russia imposed by other countries. The Russian Government adopted a list of such “unfriendly states”, which currently includes the United States, all EU member states, Albania, Andorra, Australia, Canada, Iceland, Japan, Liechtenstein, Micronesia, Monaco, Montenegro, New Zealand, North Macedonia, Norway, San Marino, Singapore, South Korea, Switzerland, Taiwan, Ukraine and the UK.[2]
As of April 29, 2022, the following measures have been adopted by Russia against so-called “unfriendly states”:
Further Countermeasures
In addition to the countersanctions in the narrow sense as described above, Russia has taken numerous further measures which do not specifically target countries that have imposed sanctions against Russia. Such countersanctions in the broad sense include measures generally taken to mitigate the effects of international sanctions on the Russian economy as well as to stifle free expression and limit media coverage that is critical of the government (on the latter set of measures and their international law implications, see also our previous client alert “Russia’s Suppression of the Media Violates Its International Law Obligations”).
In particular, Russia has adopted the following measures that are designed to mitigate the effects of international sanctions:
Additionally, Russia has adopted the following measures that are designed to suppress free expression:
Outlook
While numerous international companies are exiting the Russian market, we expect that further Russian countermeasures will be imposed.
The interaction between international sanctions and Russian countermeasures is creating and will continue to create difficult questions for companies with global operations, especially with touchpoints in Russia. We continue to closely track developments in this area.
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[1] This alert cannot replace Russian local counsel advice on the continuously developing regulatory landscape.
[2] Russian Government’s Order No. 430-r of March 5, 2022.
[3] Russian President’s Decree No. 95 of March 5, 2022.
[4] Russian President’s Decree No. 172 of March 31, 2022.
[5] Russian President’s Decree No. 81 of March 1, 2022.
[6] Russian Government’s Regulation No. 299 of March 6, 2022.
[7] See Bank of Russia, Press Release of April 1, 2022 (Russian); see also Russian President’s Decree No. 126 of March 18, 2022.
[8] Decision of the Board of Directors of the Bank of Russia of April 1, 2022.
[9] See Meduza of March 8, 2022 (Russian).
[10] Federal Law No. 55-FZ of March 14, 2022.
[11] Federal Law No. 55-FZ of March 14, 2022.
[12] WSJ of February 28, 2022.
[13] Federal Law No. 114-FZ of April 16, 2022.
[14] Russian President’s Decree No. 79 of February 28, 2022.
[15] Russian President’s Decree No. 79 of February 28, 2022.
[16] Russian President’s Decree No. 81 of March 1, 2022.
[17] Bank of Russia, Press Release of March 9, 2022 (Russian); see also Bank of Russia, Press Release of April 8, 2022 (Russian).
[18] Bank of Russia, Press Release of March 10, 2022 (Russian); this restriction is applicable until September 10, 2022 and concerns only cash withdrawals in USD, EUR, JPY and GBP.
[19] Bank of Russia, Press Release of March 10, 2022 (Russian).
[20] Bank of Russia, Press Release of April 1, 2022 (Russian).
[21] Decision of the Board of Directors of the Bank of Russia of April 1, 2022; Russian President’s Decree No. 126 of March 18, 2022.
[22] Russian President’s Decree No. 126 of March 18, 2022.
[23] Russian Government’s Regulation of March 29, 2022 No. 506.
[24] The latter provision criminalizes only Russian citizens and only if the offence has been committed within a year after being subject to an administrative penalty for a similar offence.
[25] Draft bill No. 104796-8, registered at the Russian State Duma on April 12, 2022.
[26] Draft bill No. 103072-8, registered at the Russian State Duma on April 8, 2022.
[27] Draft bill No. 102053-8, registered at the Russian State Duma on April 8, 2022.
[28] Draft bill No. 1193544-7, passed by the Russian State Duma on April 20, 2022.
The following Gibson Dunn lawyers assisted in preparing this client update: Nikita Malevanny, Michael Walther, Richard Roeder, Claire Yi, Anna Helmer, Judith Alison Lee, and Adam M. Smith.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding the above developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s International Trade practice group:
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Judith Alison Lee – Co-Chair, International Trade Practice, Washington, D.C. (+1 202-887-3591, jalee@gibsondunn.com)
Ronald Kirk – Co-Chair, International Trade Practice, Dallas (+1 214-698-3295, rkirk@gibsondunn.com)
David P. Burns – Washington, D.C. (+1 202-887-3786, dburns@gibsondunn.com)
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Marcellus A. McRae – Los Angeles (+1 213-229-7675, mmcrae@gibsondunn.com)
Adam M. Smith – Washington, D.C. (+1 202-887-3547, asmith@gibsondunn.com)
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