Inconsistent Listings Across Jurisdictions Challenge Practitioners

By Tiffany Jenkins, ACSS Reporter
January 28, 2023

A consortium of mainly Western countries imposed unprecedented sanctions packages on Russia in response to its invasion of Ukraine last February. Australia, Canada, the EU, UK, US, Japan and Switzerland, among others, introduced far-reaching diplomatic, sectoral, and individual coercive measures aimed at thwarting Russian capabilities. The measures also target individuals deemed responsible for engaging in actions that undermine Ukrainian independence and statehood.

The sanctions packages released were intended to be a concerted effort. Liz Truss, former UK prime minister and UK foreign secretary at the time of the invasion, commented in March 2022: “Sanctions were put on by the G7 in unison, and they should not be removed as long as Putin continues his war and still has troops in Ukraine.”

For the sanctions to have maximum effect, time has shown that countries must display a united front. The case of the Russia-Ukraine war follows suit. “Especially in the case of listings linked to Russia’s aggression against Ukraine, there is close coordination of the sanctions in the preparation of respective rounds of sanctions with partners such as the US, UK, and Canada,” says EU spokesperson Peter Stano.

Maia Nikoladze, assistant director of economic statecraft at the US-based think tank Atlantic Council, commented on the need to close gaps between regimes for sanctions to unfold their full force. “There are more than 800 Russian entities, predominantly financial institutions, that are sanctioned only by the United States. The sanctioning of these entities by all Western countries would leave them less breathing room and amplify the effects of US sanctions.”

Disparities Despite Coordination

Despite the emphasis of international partners on coordinating their sanctions measures, a comparison of Russia-related sanctions across the sanctions regimes of Australia, Canada, the EU, UK and US shows disparities.

Oleksandr Baienkov, who represents the Ukraine Mission at the EU, is frustrated by the inconsistencies, naming individuals sanctioned by one authority but not by another. “Why are key oligarchs not sanctioned by all the jurisdictions?”

Baienkov referred to War & Sanctions, a Ukrainian website that describes itself as “the main database of sanctions” imposed after Russia’s attack on Ukraine. The main goal of the database is to inform foreign governments and the public about Russian sanctions and to expand them to include those who support the war. “This can ensure maximum pressure on the war accomplices and bring the victory of Ukraine closer,” the website says.

On its home page, War & Sanctions declares that users can see which countries have not yet imposed sanctions on a specific person, regardless of whether other states sanction them. “This will help to synchronize sanctions lists more quickly and limit opportunities to circumvent sanctions,” the website says.

From the database, examples Baienkov cites include:

  • Alexandr Valentinovich Novak, Russia’s deputy prime minister, is listed by Canada and the US, but he is not on the Australian, EU, or UK sanctions lists.
  • Vladimir Yevtushenkov, a Russian businessman with close ties to the Russian government. Australia and the UK listed Yevtushenkov, but Canada, the EU, and the US did not.
  • Vladimir Sergeyevich Lisin, another Russian businessman with close ties to the Kremlin. Lisin is listed by Australia but not by Canada, the EU, the UK, or the US.

Despite the omissions, Nikoladze clarifies that sanctions discrepancies do not necessarily signal to Ukraine that Western countries with fewer sanctions are less willing to support it. “Western countries have gone to great lengths to help Ukraine and make Russia a global economic pariah. The EU came into this crisis with a heavy dependence on Russian energy imports but still has managed to ban Russian seaborne oil.”

Comparing the Numbers

Looking closely at the figures, the disparities in the listings are apparent. As of December 16, 2022, the EU had listed 1,386 individuals “in response to the unprovoked and unjustified invasion of Ukraine,” while the UK had 1,463 entries on its list for sanctions relating to Russia. The Atlantic Council had counted, as of November 30, 2022, in its Russia sanctions database,1,331 individuals on the US sanctions list, 1,030 on Australia’s, and 1,539 individuals on Canada’s.

The discrepancies exist despite similar listing criteria across Russia-related sanctions regimes. The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) lists persons “who had undermined democratic processes and institutions in Ukraine; threatened the peace, security, stability, sovereignty, and territorial integrity of Ukraine; and contributed to the misappropriation of Ukraine’s assets.”

A criterion for the EU is having committed “actions [that] have undermined Ukraine’s territorial integrity, sovereignty, and independence.” The UK sanctions individuals involved in “destabilizing Ukraine or undermining or threatening the territorial integrity, sovereignty or independence of Ukraine.”

Differences Across Sanctions Regimes

Discrepancies are not specific to Russia-related sanctions. Mohamed Al-Kani, a member of the Libyan Kaniyat militia, is accused of committing human rights abuses in Libya and violations of international humanitarian law.

UN report in July 2022 associated the Kaniyat militia with mass graves discovered in the Libyan town of Tarhouna. UN investigators found reasonable grounds to believe “that members of the al-Kaniyat militia committed a number of crimes against humanity through underlying acts of murder, extermination, imprisonment, torture, persecution on political grounds, enforced disappearance and other inhumane acts, and war crimes.” Mohammed al-Kani is listed by the EU, UK, and US – not by Australia or Canada.

Another example is Ahmed Ghassan, a high-ranking member of the Syrian armed forces. The EU lists him for supporting the Syrian regime as commander of the 155th missile brigade. The UK listed him as the individual responsible for the “violent repression of the civilian population” and ordering scud missiles to be fired at civilian sites from January to March 2013. Australia, Canada and the US do not list Ghassan.

Reasons for Contrasting Approaches

Commenting on the discrepancies, EU spokesperson Stano says: “While the sanctions lists as adopted by the EU and others do not have to be always 100% the same, there is an effort – especially in this current round of sanctioning the Russian regime – to align the names and the lists as much as legally possible so that we can achieve the maximum cumulative effect of the sanctions with all our like-minded partners.”

Other reasons include speed, as some countries list faster than others. It was the expediency angle that former UK Prime Minster Boris Johnson and Brexit advocate was keen to promote on February 20, 2018, to the House of Commons. Speaking as UK secretary of state for Foreign and Commonwealth Affairs, he said in a debate on the sanctions and anti-money laundering bill that in times of international crisis, when the UK judges sanctions to be the best response, the country will “no longer be compelled to wait for consensus among 28 members of the EU.”

Diverging political agendas is another reason. Nikoladze of the Atlantic Council says sanctions are “sometimes held back by different capitals having different priorities.”

The UK’s Russia-related sanctions list appears to include several individuals with significant financial stakes in the UK. This may explain several discrepancies with Russia-related sanctions lists of the UK’s partners that saw less reason to sanction them.

Apart from national interests are differences in legal systems. Each country has its own legal basis for introducing and adopting sanctions. A listing by the EU has to be able to stand a court’s scrutiny, since those sanctioned can appeal to the European Court, and it also requires a consensus of the EU member states in the first instance.

There are also differences in sanctions law itself. A case in point is how OFAC determines ownership in entities considered for sanctioning compared with the EU or UK. OFAC’s 50% rule states that, if a person owns directly or indirectly 50% or more interest in an entity, that entity qualifies for sanctions. The EU and UK, on the other hand, also consider the influence of an individual on the entity they control. They can block an entity when a sanctioned individual owns, directly or indirectly, 50% or when a sanctioned individual exerts control but holds a stake smaller than 50%.

To unify the approach to sanctions among allies, Nikoladze suggests “increasing technical exchanges and cooperation among Western sanctions-wielding authorities, which could help them close sanctions gaps more quickly.”

Practitioners Face Challenges

The differences in countries’ listings can challenge sanctions practitioners, who must keep up to date. “Companies cannot assume that compliance with the US sanctions alone will suffice, as the UK and EU regimes are more aggressive than US sanctions in key areas,” says Brian Egan, partner at international law firm Skadden, Arps, Slate, Meagher & Flom LLP. 

“Coordination between sanctions professionals from the US, UK, and the relevant EU jurisdiction is essential, from banks to tech, energy, manufacturing, and retail. Our clients with Russia-related issues routinely face scenarios implicating multiple sanctions regimes, and they need strategies to ensure compliance in all relevant jurisdictions,” Egan says.

Fresh sanctions related to Russia can happen anytime, meaning sanctions lists across regimes are subject to change at short notice. A tenth EU sanctions package is reportedly under discussion.

As Stano says: “The fact that someone is on the US list, and not on the EU list, does not mean that such person will not end up on the EU list later on, provided the necessary criteria will be met, nothing is off the table.”

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