Developments in U.S. and EU Sanctions Relating to Ukraine

March 17, 2014

On March 17, 2014, the United States and the European Union imposed sanctions relating to the Ukrainian crisis. The attached memo provides further detail on these developments, and a brief summary is below:

  • To date, sanctions related to the Ukrainian crisis, including those imposed today by the U.S. and the EU, are relatively modest and focused on individual Russian and Ukrainian officials, who are subject to individual asset freezes and travel bans. These sanctions do not affect their organizations or the Russian Government more broadly, although they do affect direct dealings with the sanctioned officials.
  • More drastic sanctions against Russian persons and entities are possible and have been threatened by some political actors in the United States, where the forcefulness of the U.S. response is also a partisan political issue, but the decisionmakers appear to be taking a cautious and incremental approach.
  • It is possible that sanctions will be expanded to target state-owned enterprises or other Russian businesses linked to developments in Ukraine, particularly if matters escalate further, but at the moment such an expansion of sanctions does not appear to be imminent.
  • At this point, we think it is unlikely that the crisis will ultimately result in the imposition of comprehensive sanctions against dealings with all Russian state-owned entities, Russian persons and entities in general, or (given European sensitivities) the Russian energy sector. In general, however, the outcome is obviously highly dependent on future developments and unpredictable political reaction.
  • Any additional sanctions are likely to be imposed without warning and will be immediately applicable.

We will continue to monitor these developments closely. Please feel free to raise any concerns you may have with any of your regular contacts at the Firm, or with Paul Marquardt in our Washington office regarding U.S. sanctions or with Till Müller-Ibold in our Brussels office or Sunil Gadhia in our London office regarding European sanctions.