On 22 February 2023, the National Security and Defense Council of Ukraine introduced a set of sectoral special economic and other restrictive measures (sanctions) against the Russian banking and financial sector. This is the first set of anti-Russia sectoral sanctions imposed by Ukraine.
To become effective, the Decision must first be approved by a resolution of the Ukrainian Parliament within 48 hours.
The sanctions will apply for 50 years to the following entities providing financial services and registered or located in the Russian Federation:
- all banks, including the Central Bank of the Russian Federation,
- non-bank credit institutions, payment systems operators, professional stock market participants, insurance companies, investment funds and other institutions providing financial services,
jointly (“Russian Financial Institutions“).
The sanctions provide for:
- suspension of transactions involving assets owned by the Russian Financial Institutions
- prohibition on establishing business relations (including correspondence relations) with the Russian Financial Institutions
- prohibition on executing transactions with the Russian Financial Institutions
- prohibition on maintaining business relations (including correspondence relations) with the Russian Financial Institutions
- prohibition on the purchase of securities and other financial instruments issued by the Russian Financial Institutions (except for the alienation of such securities (including free of charge) in favor of Ukraine);
- suspension of the performance of financial and economic obligations (including the transfer of dividends, interest payments and other payments) in favor of the Russian Financial Institutions
- prohibition on investments in or in favor of the Russian Financial Institutions
- suspension of the service of electronic means of payment (including transfers, settlements and cash withdrawals) issued by the Russian Financial Institutions
- prohibition on crediting funds to the accounts of individuals / legal entities under transfers initiated by electronic means of payment issued by the Russian Financial Institutions
- cancellation of registration and prohibition on further registrations by the National Bank of Ukraine of the following:
- the international payment system — if its operator is a Russian Financial Institution
- a participant of the international payment system — if the operator of the international payment system is a Russian Financial Institution
- a participant (Russian Financial Institution) of the international payment system — if the operator of the international payment system is a resident of Ukraine.
Individuals and legal entities are prohibited from executing transactions aimed at the circumvention of the above restrictions. The Decision will become effective on the day it is approved by the Ukrainian Parliament.
 Presidential Decree No. 89/2023 dated 22 February 2023 “On the Decision of the National Security and Defense Council dated 22 February 2023 ‘On Imposing Sectoral Special Economic and other Restrictive Measures (Sanctions) against Financial Institutions of the Russian Federation’” (“Decision“).
 Art. 5 (2) of Law of Ukraine “On Sanctions” dated 14 August 2014 No. 1644-VII.
Hanna Shtepa is a Counsel heading the International Commercial & Trade (ICT) practice in the Kyiv office of Baker McKenzie. The practice is ranked Tier 1 by Legal 500 EMEA. She specializes in international trade restrictions, economic sanctions and export controls compliance, structuring international supplies of goods and services, anti-dumping investigations, public procurement regulations, trade and general compliance, legal regime and restrictions related to temporary occupied territories and business operations during the military state. She also has extensive experience in project finance, focusing on renewable and conventional energy, financial restructuring, sovereign and municipal finance, nuclear liability. Hanna is ranked as Next Generation Partner for International Trade and Energy and recommended as a Rising Star in Banking, Finance and Capital Markets by Legal 500 EMEA 2020-2022.
Ms. Shtepa holds her LL.M. in International Commercial Arbitration Law from the Stockholm University, Stockholm, Sweden.