The 50th G7 Summit was held this past week from June 13-15 in Puglia, Italy. As one of the only law firms with sanctions experts in every G7 country, we monitored the Summit with our eyes and ears open for clues on the G7’s collective sanctions priorities — and what they mean for our clients who do business across the G7.
We share our thoughts below. The authors of this blog post include representatives of our sanctions teams in our offices from each of the G7 members – Italy, the United States, the UK, Germany, France, Canada, and Japan. Our comments are based on the official G7 Leaders Communiqué published on June 14, other statements and reports coming out of the meeting, and our local experience.
In the days leading up to the meeting, the United States, UK and Canada already released new sanctions packages that included some of these elements. (A blog post on the UK measures is here, one on the US measures is here, and one on the Canadian measures is here.)
- Using Frozen Russian Assets for Ukraine: The G7 leaders reached an agreement to use approximately USD 50 billion in frozen Russian sovereign assets to help Ukraine’s reconstruction. The funds will be provided to Ukraine as loans by the end of this year. These loans will be serviced and repaid by the interest flowing from frozen Russian assets in the European Union and other relevant jurisdictions. Russia is expected to impose countermeasures in response to this development.
- More Russia Sanctions: The G7 members will continue to impose more sanctions targeting Russia, which could include measures against financial institutions and other parties in China and other third countries that the G7 members determine have materially supported Russia’s military. The G7 leaders also stated that they will impose more sanctions on parties engaged in deceptive practices in the transport of Russian oil and those seeking to evade the price cap. In addition to the recent new US, UK, and Canadian sanctions mentioned above, the EU continues to actively discuss the scope of its 14th sanctions package, which could bring about some material changes.
- Focus on Sanctions Evasion and Enforcement: There is a continued emphasis on enforcement of the existing sanctions targeting Russia, especially against those engaged in sanctions evasion. The G7 leaders also connected Russia to efforts to evade the sanctions targeting North Korea’s weapons of mass destruction and ballistic missile programs.
- Possibility of More Iran Sanctions: The G7 leaders communicated their readiness to impose further sanctions against Iran if Iran continues its destabilizing activities in the Middle East.
- Assessing Export Controls: The G7 members will continue to assess the risks arising out of exports of dual-use technologies. The G7 leaders stopped short of promising to impose new export controls, but their statements indicate that they will consider additional export controls. At the same time, the G7 leaders called on China to refrain from export controls that could cause significant global supply chain disruptions, particularly export controls on critical minerals.
- More Focus on Foreign Investment Screening (including Outbound): The G7 leaders stated that they will work on the effectiveness of their foreign investment screening regimes. They communicated a belief that measures to address outbound investment risks “could be” an important complement to export controls and inbound investment regimes. The United States is leading the charge on such efforts, with outbound investment regime regulations in the works that are expected to be published very soon.
