With the one-year anniversary of the start of the war in Ukraine upon us, the EU Commission has outlined a range of new sanctions against Russia, with the potential for the UK and member states to follow suit.
The UK appears to be following suit with a new package of sanctions including export bans on every item Ukraine has found Russia using on the battlefield to date.
On 15 February the European Commission President Ursula von der Leyen announced the 10th package of sanctions the EU will impose against Russia.
“For almost one year now, Russia’s war of aggression has been sowing death and destruction,” said von der Leyen. “Putin is not only waging a brutal war on the battlefield but he is also viciously targeting civilians. The aggressor has to pay for this.
“Together, we are tightening the screws on Russia more and more. I call on the member states to adopt this new package of sanctions swiftly,” she added.
The raft of measures proposed by the EU Commission:
- Further export bans worth more than €11bn, to deprive the Russian economy of critical technology and industrial goods. For maximum impact, the commission is targeting many industrial goods that Russia needs.
- Further restrictions on the export of dual-use goods and advanced tech goods. The commission is proposing controls on 47 new electronic components that can be used in Russian weapons systems, including drones, missiles, helicopters, as well as on specific rare earth materials and thermal cameras. The EU has banned all tech products found on the battlefield.
- To counteract Russia’s propaganda machine, “which is spreading toxic lies to polarise our societies”, von der Leyen said the EU Commission is proposing to add Putin’s propagandists as well as additional military and political commanders to the list of individuals to whom sanctions would apply.
- Oligarchs trying to hide or to sell their assets to escape sanctions will now also be tracked by the commission. Together with Member States, the commission will set up an overview of all frozen assets of the Russian central bank held in the EU.
- The EU commission will also organise the Sanctions Coordinators Forum, gathering international partners and Member States, to strengthen enforcement efforts. Together with G7 partners, the aim is to have further significant sanctions in place by February 24 – exactly one year after Putin launched his imperial war.
Sanctions have been updated several times
From July 2022, a ban on the provision of accountancy, management consultancy and public relations services to Russia added to the growing package of sanctions imposed by the UK government. The prohibition on the provision of professional services was further extended from 16 December to include “auditing services”, subject to certain limited exemptions, in a move intended to disrupt the effectiveness of Russian businesses on the global stage.
Around 80% of Russian imports in accounting, audit, bookkeeping, and tax consultancy are said to come from the UK, EU, and US.
Members should remain alert
The subsequent flight of Russian capital to other jurisdictions, including the Middle East and South America, and the risk of attempts to evade the sanctions imposed by the UK and its allies means that members should remain alert and exercise professional scepticism in their dealings with new and existing clients who may potentially be “connected with Russia”, including in relation to changes in company ownership and structure.
“Energy costs, supply-chain disruption and heightened uncertainty destabilised economies and had far-reaching consequences for businesses of all sizes and from all sectors,” said ICAEW’s head of business Simon Gray. “It’s a reminder of the international connectivity of business and the importance of horizon-scanning and risk analysis on an ongoing basis.”
- Details of current sanctions are outlined on ICAEW’s dedicated Ukraine hub where readers can remain up to date on the latest development and be signposted to support provided by ICAEW.
- The latest version of the UK government’s guidance on providing professional services to persons connected with Russia.
- Access the latest HMT Notice on financial sanctions, including the current list of designated persons, Russia.
- The Chartered IIA has also urged business leaders to prepare for further geopolitical incidents as global disruptions as global pressures from the war rise.
ICAEW latest on Ukraine and Russia
Ukraine crisis: central resource hub
Resources, news and features on the impact of the Ukraine crisis on accountancy, business and the wider economy.
- ICAEW considers an extension on VAT relief for energy saving materials
- Tax news in brief 31 May 2023
- Changes to self assessment criteria
- EU Council reaches agreement on exchange of information for crypto assets and advance tax rulings for high-net-worth individuals
- HMRC additional needs working group
Support for members during the Ukraine crisis
Technical and Ethics Advisory Services
ICAEW Members can contact our free confidential helpline for advice and support on technical, ethical, anti-money laundering and fraud issues.
Resources for members
Chartered Accountants from across the membership have reached out to share how they are responding to the sanctions. Many are re-screening all clients with connections to Russia. Here are some of the key resources to help you respond to clients' concerns.
Doing business in ...
Guides to affected countries
ICAEW's Library and Information Service produces guides for members who are considering doing business in overseas countries. There are separate guides for Ukraine and its neighbours, all of which include updates on the latest sanctions and restrictions.