Ukraine for Manufacturers: What you need to know - Part 4 (Updated)
Released On 7th Apr 2022
The situation will develop over the coming days and weeks, so it essential to continue to check the relevant government guidance pages to understand the potential impact on your business and action you may need to take.
Latest UK Measures - 6th April
Following further reports of abhorrent attacks on civilians in Ukraine this week, the Foreign Secretary has today (Wednesday 6 April) announced a significant ratcheting up of UK sanctions on Russia.
The UK's fifth package of measures will cut off key sectors of the Russian economy and end our dependency on Russian energy. Today's measures have been delivered in lockstep with our global allies as the EU has also banned imports of Russian coal and the US has sanctioned SberBank.
Key sanctions announced include:
- Asset freezes again Sberbank and Credit Bank of Moscow. SberBank is Russia's largest bank and this freeze is being taken in co-ordination with the US.
- An outright ban on all new outward investment to Russia. In 2020 UK investment in Russia was worth over £11bn. This will be another major hit to the Russian economy and further limit their future capabilities.
- By the end of 2022, the UK will end all dependency on Russian coal and oil, and end imports of gas as soon as possible thereafter. From next week, the export of key oil refining equipment and catalysts will also be banned, degrading Russia's ability to produce and export oil - targeting not only the industry's finances but its capabilities as a whole.
- Action against key Russian strategic industries and state-owned enterprises. This includes a ban on imports of iron and steel products, a key source of revenue. Russia's military ambitions are also being thwarted by new restrictions on its ability to acquire the UK's world-renowned quantum and advanced material technologies.
- And targeting a further eight oligarchs active in these industries, which Putin uses to prop up his war economy.
For more information please see the UK Government website: Russian invasion of Ukraine: UK government response - GOV.UK (www.gov.uk)
EU announces further Sanctions - 5th April
The fifth EU package has six pillars.
- The EU will impose an import ban on coal from Russia.
- A full transaction ban on four key Russian banks, among them VTB, the second largest Russian bank. These four banks, which we now totally cut off from the markets, represent 23% of market share in the Russian banking sector.
- A ban on Russian vessels and Russian-operated vessels from accessing EU ports. Certain exemptions will cover essentials, such as agricultural and food products, humanitarian aid as well as energy. Additionally, the EU will propose a ban on Russian and Belarusian road transport operators. This ban will drastically limit the options for the Russian industry to obtain key goods.
- Further targeted export bans, worth EUR 10 billion. This includes, quantum computers and advanced semiconductors, but also sensitive machinery and transportation equipment.
- Specific new import bans, worth EUR 5.5 billion, on products from wood to cement, from seafood to liqour.
- The EU will take several targeted measures, such as a general EU ban on participation of Russian companies in public procurement in Member States, or an exclusion of all financial support to Russian public bodies.
For more information, please see EU website: EU solidarity with Ukraine | European Commission (europa.eu)
