Last week, the G7 foreign ministers met on the island of Capri in Italy, which is currently serving in the role of the G7 Presidency. As one of the only law firms with offices and sanctions experts in every G7 country, we watched the meeting with great interest to see how the G7 will be approaching sanctions in the near future.
We wanted to flag two quick takeaways from the statements coming out of the meetings:
- Keep an eye out for more sanctions targeting Iran across the G7 (and beyond).
The ministers expressed support for more sanctions, referencing in particular Iran’s support for Russia and its April 13 missile and drone attack on Israel. In fact, the US and UK have already introduced new sanctions and export control measures related to Iran’s drone and missile programs on April 19, which we will cover in more detail in a separate post. Beyond the G7, the President of the EU has stated that the EU will back new measures targeting Iran.
It will be particularly interesting to see how the ex-US measures develop given that the US has already had an embargo and extensive secondary sanctions for many years, while the G7 and others have always had much narrower restrictions.
- The G7 will remain focused on Russia sanctions enforcement and targeting parties that circumvent sanctions
It may come as no surprise that the G7 ministers expressed a focus on Russia sanctions enforcement. Still, these statements underscore the need for companies to continue to approach sanctions compliance and investigations with the proper mindset and with an understanding that enforcement remains a priority.
Our Global Sanctions Investigation Group recently launched a blog series to share what we have been seeing while acting on the first wave of sanctions investigations in the current hot enforcement environment – see the latest post here.
The G7 ministers also stated that they continued to be committed to preventing Russia sanctions’ circumvention by imposing additional sanctions on companies and individuals in third countries who help Russia acquire tools and other equipment for its military and industrial development. We have already been seeing this happening in recent sanctions actions. Targeting parties in third countries (i.e., outside Russia) was previously rare or even unheard of outside the United States. We expect to see more of this type of targeting.
The ministers also committed to continue immobilizing sovereign assets in G7 jurisdictions until Russia ceases its aggression, but they did not make statements about whether they would confiscate those assets to provide them to Ukraine for reconstruction, which has been an ongoing discussion. The US House of Representatives passed a bill over the weekend that would give the President the authority to seize Russian assets that have been blocked under the US sanctions, and there has been a proposal in the EU to give the proceeds from the interest on the frozen assets to Ukraine rather than seize the assets themselves.
Please subscribe to our blog and stay tuned for insights from our G7 experts on the ground in our Baker McKenzie trade teams in Italy, the US, Canada, France, Germany, Japan, and the UK as new sanctions developments unfold.
