Ukraine Sanctions Update
In response to the growing crisis in Ukraine, the EU and US have taken steps to impose sanctions on various persons regarded as being responsible for human rights violations in Ukraine, undermining the democratic processes and institutions in Ukraine, threatening Ukraine’s peace, security, stability, sovereignty, and territorial integrity, and contributing to the misappropriation of Ukraine’s assets. The scope and impact of the measures are described in detail further below. At the present time, the measures are limited to the imposition of asset freezes and visa bans against various Ukrainian and Russian individuals.
The practical effect of designation under the two EU regulations and the two US executive orders is similar - persons subject to EU / US law are required to freeze the property of designated persons, and are prohibited from making funds or economic resources available, directly or indirectly, to or for the benefit of such designated persons.
Members subject to EU and/or US jurisdiction and involved in trade with Ukraine or Russia are advised to check the names of their business counter parties against EU and US designation lists. Many of the individuals that are currently subject to EU and US asset freeze are likely to have business interests. If there is a risk that a business counter party could be connected to a designated person or under their direction or control, beneficial ownership may need to be investigated by asking for further details including:
- identity of all directors and shareholders, including percentage shareholding;
- ultimate beneficial owners;
- articles of incorporation;
- share register of the entity.
Members are advised to seek legal advice if they have concerns about any of the individuals, companies or other entities connected with their trades involving Ukraine or Russia.
Members not subject to either EU or US jurisdiction may nevertheless encounter problems related to receipt/payment of funds from/to designated parties. Members are reminded that P&I cover is unlikely to be available for liabilities arising out of trade / contracts involving designated parties, or where the employment of vessels contravenes sanctions regulations.