The Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023

The Russia (Sanctions) (EU Exit) (Amendment) (No. 2) Regulations 2023 were published on legislation.gov.uk, the official UK web portal for publicizing legal documents. The new regulations amend the existing Russia sanction regulations, the Russia (Sanctions) (EU Exit) Regulations 2019 (SI 2019/855), primarily to name a new objective of the 2019 sanction regulations and to expand certain sanction measures to the non-government controlled areas of Kherson and Zaporizhzhia.
Specifically, the regulations modify the 2019 Regulations by adding a new purpose, alongside the existing purposes stated in regulation 4. The new purpose is to promote the „payment of compensation by Russia for the damage, loss, or injury suffered by Ukraine as a result of Russia’s invasion of Ukraine on or after 24 February 2022“. This amendment aligns with the UK’s stance that Russia is fully responsible for the war and the consequent damage, including to Ukraine’s critical infrastructure, and shall be held liable for corresponding damage payments.
Additionally, the instrument extends the application of existing finance, shipping, and trade sanctions measures, which originally applied to non-government controlled Ukrainian territory in Donetsk and Luhansk, to also cover non-government controlled areas of Kherson and Zaporizhzhia. These sanction measures include prohibitions as regards the export of certain goods and the provision of related financing, insurance, or brokerage activities. Also, the prohibitions relating to investment services under regulation 18 are extended to cover both Kherson and Zaporizhzhia. Regulation 18 provides that it is prohibited to
1. directly or indirectly acquire or expand ownership or participation in land located in non-government controlled Ukrainian territory.
2. directly or indirectly acquire ownership, control, or expand participation in a relevant entity.
3. provide funds, such as loans, credits, or equity capital, to a relevant entity or for the documented purpose of financing such an entity.
4. establish a joint venture either in non-government controlled Ukrainian territory or with a relevant entity.
5. provide investment services directly related to any of the aforementioned activities.
Finally, the regulations also apply existing licenses (e.g. for the wind-down of investment activities or the provision of humanitarian aid) and penalty provisions to activities in the non-government controlled areas of Kherson and Zaporizhzhia.