On May 11, 2022, the Russian Government adopted Decree No. 851 “On measures to implement Presidential Decree No. 252 dated May 3, 2022” (“Decree No. 851“).

Decree No. 851: (i) introduced the list of designated persons; and (ii) supplemented the list of prohibited transactions with designated persons.

The list of designated persons includes 31 energy companies incorporated in the EU, the US, the UK, Singapore and Switzerland.  Notably, most of the designated persons are members of Gazprom Germania group of companies.  In particular, the list includes Gazprom Germania GmbH itself and its subsidiaries: Gazprom NGV Europe GmbH, Astora GmbH, ZGG – Zarubezhgazneftehim Trading GmbH, GAZPROM Schweiz AG, WIEE Hungary Kft., IMUK AG, WIBG GmbH, WIEH GmbH, WINGAS GmbH and others.

As we noted earlier, the legal framework for Russian blocking sanctions prohibits: (i) persons under Russian jurisdiction from entering into transactions with (or discharging of obligations, including under deals already in progress, in favour of) designated persons from “unfriendly states”; and (ii) the export of raw materials/commodities/other products originating from Russia in favour of sanctioned persons or via sanctioned persons to third parties.

Furthermore, Decree No. 851 extended the list of prohibited transactions with the designated persons.  In particular, transactions: (i) involving entry of vessels owned or chartered by the designated persons into Russian seaports; and (ii) transactions involving payments and securities transactions with or for the benefit of the designated persons, have become also prohibited.

Notably, the wording of Decree No. 851 remains unclear as to the scope of restrictions on “transactions involving payments and securities transactions with or for the benefit of the designated persons”.  In our view, this restriction can be interpreted as a: (i) restriction on transactions with securities issued by the designated persons; and/or (ii) restriction on any securities transactions to which the designated persons are parties.

Finally, according to Decree No. 851, the Russian Ministry of Finance is responsible for suggesting to the Government: (i) new designations; and (ii) granting temporary licenses on transactions with the designated persons.

The level of impact that Decree No. 851 and Decree No. 252 will have on transactions involving Russia will only become clear once additional clarifications on the term “individuals under the jurisdiction of the Russian Federation” (who are obliged to comply with these new restrictions) are published, which has not yet happened.