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Update For UK Companies Trading In Russia And Ukraine

Latest information for UK exporters on the impact of Russia’s recent intervention in Ukraine and annexation of Crimea on business

Published on 21 July 2014

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The UK government is keeping our economic engagement with Russia under close review. Some bilateral cooperation and trade support activity is being affected.

Decisions on any further diplomatic, political and economic measures will be taken in close collaboration with European Union (EU) and G7 partners.

The UK government will continue to offer UK companies support and advice. Commercial decisions are ultimately for companies to make themselves on the basis of commercial risk, bearing in mind increased risk that high profile business engagement might be exploited by Russia for political reasons.

If UK companies encounter any obstacles to business in Russia or Ukraine they should contact the Department for Business, Innovations & Skills (BIS) helpline.

BIS helpline: 0300 456 3565

Russia remains an important trading partner for the UK. The UK exported £7.6 billion of goods and services to Russia in 2012.

Read the latest updates on the government’s response to the situation in Ukraine.

Read the Foreign & Commonwealth Office (FCO) travel advice for Russia and Ukraine.

Doing business in Crimea

The UK government is implementing a strict policy of non-recognition with respect to Crimea/Sevastapol, in line with UN General Assembly Resolution 68/262. UK businesses should be mindful of the increased commercial risks created by this situation.

The UK government will continue to offer UK companies advice where it can, but is not in a position to offer advice on the legal implications of operating in Crimea.

Following the EU Foreign Affairs Council of 23 June 2014 EU members have agreed to:

  • prohibit the import of goods originating from Crimea and Sevastopol with the exception of those with certificates of origin granted by the government of Ukraine
  • prohibit direct or indirect financing, or financial assistance for the import of goods from Crimea and Sevastopol, as well as insurance and reinsurance related to such imports
  • continue to monitor the situation and to consider further trade measures as necessary

The European Council agreed to impose additional measures to restrict investments in Crimea on 16 July 2014. It called on international financial institutions not to finance any projects that explicitly or implicitly recognise the illegal annexation of Crimea and Sevastopol.

Contact UK Trade & Investment (UKTI) Ukraine for further advice on doing business in Crimea.

UK government response to situation in Ukraine

Steps taken by the UK government in response to the situation in Ukraine include suspension:

  • with immediate effect of all extant licences and application processing for arms exports to Russia
  • of licences for dual use items destined for Russia’s armed forces or other state agencies where end product could be, or is being deployed against Ukraine
  • of export licences to third countries for products to be incorporated into equipment for export to Russia, where there is a clear risk that the end product will be used against Ukraine
  • of preparations for the G8 Summit in Sochi this summer
  • of all senior military visits, unless in direct support of UK objectives

We will review:

  • other high level visits, as well as planned trade and investment activities, on a case by case basis with possible cancellations or deferrals
  • bilateral military cooperation with the presumption all, but work carried out to fulfil international treaty obligations will be suspended

EU response to situation in Ukraine

Steps taken by the EU include:

  • suspension of visa liberalisation talks and talks on a new EU-Russia cooperation agreement
  • visa bans and asset freezes against individuals connected to the situation in Ukraine
  • visa bans and asset freezes extended by 14 April 2014 EU Foreign Affairs Council
  • sanctions imposed by EU Council, with definitions of ownership and control set out in EU guidance
  • cancellation of EU-Russia summit by 20 March 2014 EU Council and support for suspension of Russian accession to the Organisation for Economic Co-operation and Development (OECD) and International Energy Agency (IEA)
  • confirmation of consequences across a number of fields if further escalation by the Russian Federation

Call Her Majesty’s Treasury (HMT) financial sanctions helpline on 0207 270 5454 with questions on financial sanctions.

Commercial decisions on whether to pursue business that is not within the scope of the sanctions are for companies themselves to make.

How asset freezes work

EU asset freezes are agreed in the form of a Regulation issued by the EU Council and come into direct legal effect as soon as it’s published. The freeze does not change the ownership of the funds.

An asset freeze means that:

  • designated individuals are prevented from using or accessing the funds in the EU
  • no funds or economic resources can be made available to these designated individuals
  • any conduct which circumvents the prohibitions of the asset freeze is considered to be a criminal offence


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Posted 2014-07-21 12:02:00