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Niten Chauhan @ LAWASIA Niten Chauhan, Head of Restructuring and Insolvency and Law Asia Vice Chair shared a platform with the Law Society President, Lubna Shuja at the Law Asia conference in Australia during which the impact of sanctions, in particular in the context of the Russia/Ukraine conflict was the subject of Niten’s key note speech. Sanctions are tools used by many countries, to force a change in behaviour, compel a country to follow a specific course of action or to communicate a political message. It’s of course only pragmatic to acknowledge that Russia is a major energy supplier and that Ukraine supplies wheat and grains to the world. As a result, the invasion of Ukraine and subsequent sanctions have had global economic effects adding to a sense of turmoil just as the world began to recover from the Covid-19 pandemic. Ukraine is unable to export its food products as fighting has closed the country’s Black Sea ports, blocking its exports of wheat, corn, sunflower oil, and other goods, and the restricted energy supply from Russia has meant higher energy and fuel prices for consumers. At the same time serious questions as to the development of long term and sustainable energy strategies for the UK are now finally being asked.
In considering the effects of the new sanctions regime for the UK, it is worth noting the new environment following Brexit – this has given the UK more leeway in adopting an approach which might be closer to the US style of imposing sanctions, than that of Europe. For example, the use of travel bans and asset freezes on entities or individuals where there are reasonable grounds to suspect serious corruption are similar in style to the US, rather than the EU. Additionally, coordinated sanctions across Europe and the US, targeting Russia’s financial, aviation and shipping sectors, other strategic sectors of the economy such as defence, aerospace and energy, together with individuals close to the Putin regime, aim to weaken the ability of Russia to raise capital and continue its campaigns - indicating a new willingness for greater co-operation on security and safety. By way of example, the practical outcome of these changes means that regulators, such as the Financial Conduct Authority (FCA) are empowered to receive and deal with voluntary reports of sanctions breaches from authorised firms and their employees. Overall, stricter obligations around accepting money transfers from or to Russia, and a greater awareness of the impact of money laundering
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