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executive summary
- Expanding and Complex Sanctions Regime: The U.S., the UK, and the EU have imposed one of the most extensive and complex sanctions regimes in history against Russia, aiming to isolate the country and erode its economy's ability to support the ongoing conflict.
- Challenges for Global Businesses: Firms face significant challenges in complying with these sanctions due to the differences among U.S., EU, and UK regulations, which “rhyme but do not match.” Compliance is further complicated by Russian countermeasures against “unfriendly” countries (e.g., special taxes, blocked transfer of shares/assets).
- Looking Forward: Firms that proactively planned for sanctions and implemented scenario plans have achieved better results than those reacting after the fact. With potential geopolitical conflicts worsening (e.g., between the U.S. and China), global firms should consider initiating plans to address future sanctions and countermeasures.
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Sample
Since Russia’s 2022 invasion of Ukraine, the United States, United Kingdom and European Union, along with other countries, have imposed extensive sanctions and export controls on Russia, the Russian occupied regions of Ukraine and Belarus. In this dialogue, we review the current state of play, and we assess the challenges and potential ways through this complex array of sanctions.
Current state of play
Where are Russia sanctions today?
Satish: The Russia sanctions regime is among the most extensive and complex sanctions regimes in history adopted by the U.S., the UK and the EU. With no clear end in sight to the conflict, these measures have continued to expand with the purpose of isolating Russia and eroding the Russian economy’s ability to support the war.
To illustrate, since the early days of the conflict, our firm has published and regularly updated a guide to the sanctions that have been adopted, chronicling the changes and expansions that have occurred over time. Our guide is now 130 pages long!

The sanctions and export controls imposed are not only expansive but also varied in application. For example, many Russian “oligarchs” and their companies, plus many Russian financial institutions, are subject to full blocking sanctions. But other firms are subject to narrower restrictions. In addition, the U.S., UK and EU have restricted certain investments in and services to Russia, and they have been seeking to address sanctions evasion (by, among other things, focusing on third-country companies and persons that continue to do business with Russia notwithstanding Western sanctions).
Alan: If that were not enough to make compliance challenging, there is the further issue that U.S., EU and UK sanctions “rhyme” but do not match – thus, firms need to consider each of these jurisdictions, depending on where a transaction is taking place and what countries it may touch, to determine if a particular activity is permissible.
Examples: If a UK company is a party to the transaction, and that transaction is in U.S. dollars, both UK and U.S. sanctions will be implicated. In addition, if there is an EU bank involved in financing or clearing the transaction, then EU sanctions too will be implicated.
Challenges for global businesses
What is the biggest challenge for firms in dealing with Russia sanctions?
Satish: The challenges vary based on what a firm is trying to do. For example, we have recently been helping a Cayman fund with a U.S. manager address the issues posed by having a newly sanctioned party as an investor – in this case, there were lots of questions to work through, including how to effect the required blocking of assets and whether Cayman or U.S. blocking obligations were triggered. In another situation, we have been working with a firm making an investment in India and learning that the target had ongoing business in Russia that appears to implicate U.S. sanctions. Thus, the question became whether the U.S. investor could pursue the transaction and what representations and warranties and other controls need to be implemented post transaction.
Alan: Adding to the complexity posed by these sanctions issues are Russian counter measures, which have been taken in response to the actions of “unfriendly” countries. Firms that may want to engage in transactions with Russian counterparties, or that try to exit from positions or businesses still in Russia, have to address these countermeasures, which may include complying with special procedures and obtaining approvals from the Russian government, paying special taxes and facing other limits on certain types of transactions. In many cases, these may conflict with Western sanctions requirements.

Mitigation measures
Are there practical steps that firms can take to address Russia sanctions compliance?
Alan: Depending on the transaction at issue, firms may be able to take practical steps to structure a transaction to avoid Russian countermeasures and still comply with Western sanctions restrictions. For example, in certain cases, it may be possible to effect a transaction via a third country and, thereby, avoid the limits placed by Russia on transactions from “unfriendly” jurisdictions.

Satish: In some of these cases, we have discussed these transactions with U.S. authorities and received non-objection comfort. We have achieved this result by showing that a particular transaction is designed to pursue an exit from Russia or otherwise fits within the policy objectives of U.S. sanctions. To achieve a successful result in these cases, it helps to have both strong knowledge of the Russia market and Russian countermeasures, which Alan has, plus credibility before U.S. and other Western authorities, which we have built up.
Exiting Russia
Are firms that still have assets in Russia able to get them out?

Alan: Yes, but it is more challenging now than it had been in the early days of the conflict. Firms that acted quickly and that had a pre-planned exit strategy at the outset were able to exit Russia more readily, but now the countermeasures effected by Russia pose a bigger challenge. Depending on the structure of the exit transaction and the terms imposed on the parties by the Russian government approval, a license may be required from U.S., EU or UK authorities, which may be time-consuming or even not available at all. The Russian authorities have been imposing increasingly onerous conditions on exits by Western companies, -- a trend that is likely to continue.
Satish: As Alan notes, firms that prepared for Russia sanctions and implemented scenario plans were able to achieve better results than firms that were purely reactive.
Shifting gears a bit from Russia, it seems quite evident that the U.S.-China geopolitical conflict will worsen in the next few years, and Western firms that operate in China should consider starting the process to plan for such worsening sanctions and Chinese countermeasures.
Secondary sanctions
What are "secondary sanctions"? Secondary sanctions are penalties that a country (like the U.S.) imposes on third parties—usually foreign individuals, companies, or governments—that do business with a country already under sanctions. Unlike primary sanctions, which target the sanctioned country directly, secondary sanctions aim to pressure other countries or businesses to stop trading with or supporting the sanctioned country. For example, if the US has sanctions against Iran, and a foreign company continues to do business with Iran, the US could impose penalties on that company, even though it is based in a different country. The goal is to further isolate the sanctioned country by discouraging international businesses and governments from engaging with it, or else they face consequences themselves.
How big of a risk is presented of U.S. “secondary sanctions”?
Alan: To intensify pressure on Russia, the United States maintains and has expanded the threat to sanction third-country actors that provide material support to U.S. sanctioned parties, or, in the case of non-U.S. financial institutions, that provide any service involving Russia’s military industrial base, which is broadly defined. This is an expansive and significant threat designed to isolate Russia and make any firm operating outside of the United States think twice about engaging in activities or transactions that are targeted by the secondary sanctions.
Satish: To add to what Alan said, actually the U.S. has rarely imposed secondary sanctions, but it maintains a broad secondary sanctions regime that is like the “Sword of Damocles” hanging over non-U.S. parties engaging in Russian-facing activities and business. Non-U.S. firms, and particularly non-U.S. financial institutions, need to address U.S. secondary sanctions in their compliance programs.
Alan Kartashkin, Partner in the Debevoise & Plimpton London office, is the head of its Eastern European practice and the former managing partner of its Moscow office, and Satish Kini, is the Partner in the Debevoise & Plimpton Washington, D.C office and co-head of its national security practice.