Ukraine Expands Sanctions against Russia and its Supporters

On 20 May 2022, the President of Ukraine signed the Law of Ukraine On Amendments to Certain Legislative Acts of Ukraine to Increase the Effectiveness of Sanctions Related to Persons’ Assets (the Law). The Law, which should become effective in the next few days, introduces a new type of sanction in the Law of Ukraine On Sanctions that entitles the Ukrainian authorities to seize the property of particular individuals and legal entities associated with the ongoing military aggression by the Russian Federation against Ukraine, without compensation.

The Law envisions that the central executive body, which is responsible for implementing the state policy relating to the seizure of sanctioned assets in favour of the state, is authorised to initiate the implementation of this new sanction against individuals and legal entities, however only while martial law remains in force, if their actions:

  1. cause significant damage to the national security, sovereignty or integrity of Ukraine, including by:
  • making decisions to initiate military aggression against Ukraine;
  • participating (directly/indirectly) in military aggression;
  • arranging illegal elections or referendums in the temporarily occupied territory of Ukraine;

2. contribute to actions or decisions aimed at causing significant damage to Ukraine, including by;

  • providing civil infrastructure facilities or other property to the Russian Federation to accommodate its armed forces and equipment;
  • paying taxes or fees to the state budget of the Russian Federation, if the total amount of such payments (excluding customs) for the last four consecutive tax (reporting) quarters exceeds the equivalent of UAH 40 million for legal entities and UAH 3 million for individuals (determined at the weighted average official exchange rate of the National Bank of Ukraine for the same period);
  • investing in government bonds of the Russian Federation, if the total amount of investment during the year is at least UAH 3 million at the official exchange rate of the National Bank of Ukraine.

Once the respective body identifies a person who is viewed as a subject for sanctions, it first needs to ensure that such person’s property is already temporary blocked (as a required preliminary sanction under the Law of Ukraine On Sanctions), and then submit an application to the High Anti-Corruption Court of Ukraine, which within ten days will define whether the property can be seized in favour of Ukraine.

Under the Law, the assets of sanctioned persons can still be seized in favour of Ukraine even though such assets might be pledged or have other temporary restrictions regarding their use or disposal.


Ihor Olekhov, partner, head of banking and finance, CMS Cameron McKenna Nabarro Olswang

Bohdan Ilchenko, associate, CMS Cameron McKenna Nabarro Olswang

Posted in #standwithUkraine