On 15 March 2017, the President of Ukraine enacted the decision of the Ukrainian National Security and Defense Council (the “NSDC“) to impose sanctions on five Ukrainian banks with the capital of Russian state-owned banks: Sberbank PJSC; VS Bank PJSC; Prominvestbank PJSC; VTB Bank PJSC; and BM Bank PJSC (the “Sanctioned Banks“).1 The Sanctioned Banks are prohibited from transferring capital outside the territory of Ukraine in favour of any affiliated entities. Based on the current interpretation by the state authorities, this sanction includes prohibition against:

  • transferring any funds from the Sanctioned Banks to their affiliated entities;
  • transferring securities abroad from the securities accounts of the Sanctioned Banks; and
  • entering into any transactions with securities (or other financial instruments) of the Sanctioned Banks through securities traders.

The government and the National Bank of Ukraine are obliged to ensure implementation of the sanctions and take measures to prohibit companies with a state share from depositing funds with the Sanctioned Banks. Therefore, new regulations on implementation of the sanctions and detailed restrictions imposed by these sanctions should be approved within the next few weeks.

The sanctions are imposed for the period of one year.

1The Decree of the President of Ukraine No. 63/2017 from 15 March 2017 enacting the NSDC’s Resolution dated 15 March 2017 “On Imposition of Personal Special Economic and Other Restrictive Measures (Sanctions)”.

 

Author

Hanna Shtepa is a Senior Associate of the Kyiv office of Baker McKenzie specializing in economic sanctions, export controls, international supplies of goods and services, public procurement regulations. She has significant experience on advising clients on supplies to Ukraine, participation in Ukrainian public procurement tenders, special regime of trade and business activities in the Crimea and uncontrolled territories in the East of Ukraine, Ukrainian sanctions restrictions against Russia. Hanna is experienced in drafting and negotiation of supply contracts, including procurement contracts for public needs, trade compliance policies and trade finance agreements. Hanna held a number of training and presentations for Ukrainian banks and corporate clients on compliance with Ukrainian sanctions and special trade regimes with the Crimea and uncontrolled territories in the East of Ukraine. She is one of the contributors to Baker McKenzie sanctions blog.