What Do Russian Sanctions Imply? 23 February 2022
In terms of the possible effects of the crisis between Russia and Ukraine on commercial life, the statements made by the countries in the international community regarding this crisis are crucial. In this sense, Germany froze the approval process of the Nord Stream 2 gas line as a first step, while the USA banned trade with Luhansk and Donetsk. On the other hand, England froze the assets of five Russian banks and three Russian billionaires in the country, and Japan gave some sanction signals for the future. Finally, Canada announced that in the first phase of economic sanctions, Canadians were barred from financial agreements with Donetsk and Luhansk.

First of all, it would be reasonable to examine the sanctions in two stages. The first title of the sanctions is the relation to trade with the so-called "autonomous" pro-Russian entities established in the Luhansk and Donetsk Regions. The United States has prohibited all its citizens from trading any products or raw materials with these territories. In the second stage, US Administration orders for the termination of commercial relations with the institutions and organizations determined by the Executive Order.
|
||||
The difference of this approach from the embargoes applied to Iran is in terms of the people on whom the sanctions will be applied. Because, in the embargo applied to Iran, serious obstacles were placed on the trade of third parties who are not US citizens in matters that were within the scope of the embargo. Naturally, the application of these restrictions to third parties was not the same as the application to their own citizens. The application of this prohibition to third parties by the US was naturally not the same as its application to its own citizens. Sanctions differed between those involving their own nationals (Primary sanctions) and those involving foreign nationals (Secondary sanctions). The issue with whom (real and legal) trade is prohibited within the framework of these sanctions is determined through the SDN (Specially Designated Citizens) list published by the Ministry of the Treasury. Although it is not as comprehensive as the Iran example, this list, which includes 445 real and legal persons, is a list that should be checked before trading with Russia. |
||||
Primary Sanctions: Binds US natural and legal persons (including green card holders) US-owned foreign companies that the US citizens hold majority stakes in for the purpose of investing. Violation of these sanctions can result in punishments up to imprisonment. |
||||
Secondary Sanctions: It binds citizens of other countries, including Turkish natural and legal persons. It can be applied to natural and legal person’s actions that the USA determines to violate the sanctions. If the use of dollars in the SWIFT system is made by the company using US systems (even the domain and hosting of the website), it is subject to primary sanctions. This means that your money transfers through the USA may be seized due to sanctions violation, or the US financial institution will refuse to make the transaction or return the money to the sender. |
||||
As a result, unlike the embargo applied to Iran, sanctions to be applied to Russia does not envisage an embargo covering foreign nationals. |
||||
In summary, with the Executive Order issued in the USA, financial institutions that play an important role in the Russian defense industry and the development of the country's infrastructure that have strong organic ties with the state were targeted. Vnesheconombank (VEB), a state bank that has an immense share in the development of Russia's economic and industrial infrastructure, its managers and subsidiaries were included in the banned lists by OFAC (Office of Foreign Assets Control). In this context, the assets of the relevant organizations and individuals in the USA were confiscated. |
||||
In addition, Promsvyazbank (PSB), which is a state bank that has a large share in the financing of the Russian defense industry, its subsidiaries and high level officials are also within the scope of the ban. In this context, US citizens and US-related legal entities will completely terminate their communication with these organizations and the United States Administration will prohibit the entry of natural persons that are within the scope of the ban. |
||||
IN CONCLUSION, the crisis between Russia and Ukraine has not yet had an enforceable effect on the third country citizens in terms of trade. The reason for this is that the USA and other European countries did not envisage an embargo that could potentially spread to all citizens of the world, both administratively and legally. Since these sanctions are only targeting certain financial institutions and their managers, they practically do not affect individuals exporting to Russia. If the third parties does not establish commercial relationships with the designated area and institutions set forth in the Executive Order, there won’t be any liability issues for commercial activities. However, if Russia continues its aggressive stance, it is clear that a potential series of sanctions awaits Russia. Although Russia’s removal from the SWIFT system, which was a measure applied to Iran in 2012, will affect countries such as the USA and Germany, it is a possibility that should be taken into account if Russia's progress continues. In this case, as in the case of Iran, additional sanctions will adversely affect both Russia and real and legal persons who have commercial relations with Russia. |
Other News
-
2.1.2023
What Are The New Determinations Under Article 1530 Of The Turkish Commercial Code ?
In the Official Gazette numbered 32061 published on 02.01.2023, the Central Bank of the Republic of Turkey announced the Communiqué on the Default Interest Rate to be aplied for Late Payments in the Supply of Goods and Services and the Minimum Expense Amount that can be claimed for the Collection Costs of Receivables ("Communiqué").
-
2.1.2023
Interest Rates To Be Applied In Rediscount And Advance Transactions Were Determined.
On 31 December 2022, new rates were announced by the Central Bank of the Republic of Turkey with the Communiqué on Determination of Interest Rates to be applied in Rediscount and Advance Transactions in the Official Gazette numbered 32060.
-
28.12.2022
Top 10 Deals Of The Year 2022
-
19.12.2022
What Are Increasing Monetary Limits And Changing
1- Law On Consumer Protection Monetary Limits In The Regulation On Consumer Arbitration Committees Increased In the Official Gazette dated 16 December 2022 and numbered 32045; 68 of the Law on the Protection of the Consumer No. 502 and Article 6 of the Regulation on Consumer Arbitration Committees ("Communiqué") on Increasing the Monetary Limits has been published and entered into force.
-
6.12.2022
Chain Stores in the Food Retail Sector Are Obliged to Share Data.
The Regulation on Amending the Regulation on the Principles and Rules to be Applied in Retail Trade (hereinafter referred to as "Regulation") has been published and entered into force.
-
5.12.2022
Will "Obligation To Obtain And Submit A Surveyor's Report'' To Be Introduced In Real Estate Sales?
On 25 October 2022, the "Presidential Annual Program for 2023" (hereinafter referred to as the "Program") prepared by the Ministry of Treasury and Finance and the Presidency of Strategy and Budget with the Presidential Decree No. 6294 was announced in the Official Gazette repeating No. 31994.
-
4.12.2022
What Are The Changes Introduced by the Decision Regarding The Determination Of The Companies Subject To Independent Audit?
As it is known, the independent audit, which is important in terms of informing both the public and the shareholders about the financial status of the company, is obligatory for companies to be determined by the President in accordance with the Turkish Commercial Code (TCC) No. 6102.
-
14.9.2022
What Are The Provisions That Have Been Postdated In The Distance Contracts Regulation?
The "REGULATION ON AMENDING THE REGULATION ON THE REGULATION ON DISTANCE CONTRACTS" (Hereinafter referred to as "Regulation") was published in the Official Gazette dated 14 September 2022, and in accordance with this Regulation, the effective dates of some regulations made on August 23, 2022 have been amended.
-
17.7.2022
Alterations in the Context of the Law on the Regulation of Electronic Commerce
In consequence of the amendments made in the Law No. 6563 ("Law") with the Law No. 7416 on the Amendment of the Law on the Regulation of Electronic Commerce, published in the Official Gazette dated 7 July 2022 and numbered 31889, numerous new legal regulations have been envisaged on issues such as the obligations of electronic commerce intermediary service providers ("Intermediary Service Providers") and electronic commerce service providers ("Service Providers"), the administrative fines foreseen in case of violation of these obligations, the electronic commerce license and the expansion of the powers of the Ministry of Commerce ("Ministry") in this area. In this article, the contents of the provisions of the relevant Law will be cited and the date of entry into force will be explained as a consequence of the new regulations envisaged.
-
29.6.2022
THE OFFICIAL GAZETTE HAS PUBLISHED THE REGULATION AUTHORIZING THE SALE OF IMMOVABLES BY THE NOTARY, WITH THE EFFECTIVE DATE SET FOR JANUARY 1, 2023.
With the "Law on the Amendment of the Law on Judges and Prosecutors and Some Other Legislation" numbered 7413 published in the Official Gazette dated 28 June 2022, a regulation authorizing the sale of real estate to notaries was introduced.
-
1.6.2022
Obligation to Provide Continuous Information Regarding Advertisements Posted on the Internet
The Tax Procedure Law General Communiqué with line number 538 published in the Official Gazette dated 31 May 2022 has been published. Within the scope of this Communiqué, certain obligations were imposed on intermediary service providers, social network providers and hosting providers that mediate the publication of advertisements for the purchase, sale or rental of movable and real properties and goods and services. Aforementioned persons are obliged to report certain information specified in the Communiqué regarding the transactions they carry out to the Turkish Revenue Administration through the system created in the electronic environment.
-
25.4.2022
Constitutional Court Decision On Fingerprint Registration System Is Published!
The Constitutional Court made a new decision regarding tracking employees' shifts by the employers in the working life, with fingerprint, face, palm, or retina scanning methods. The decision of the Constitutional Court, dated 10.03.2022, stating that tracking employees' shift with the fingerprint registration system violates the right to protection of personal data, was published in the Official Gazette dated 19 april 2022 and numbered 31814.
-
24.4.2022
The Application Necessity Of Mediator In Negative Declaratory Actions!
The issue of the application necessity of mediator in terms of negative declaratory actions has been a matter of debate in doctrines and case-laws. However, at this point, a consensus has been reached on this issue and it is accepted that there is no application necessity of mediator in terms of negative declaratory actions.
-
19.4.2022
Amendment To The Currency Of Payment To Be Made In Foreign Exchange Indexed Sale Of Goods Contracts!
In accordance with the Decision No. 32 on the Protection of the Value of the Turkish Currency, the matters to be determined by the Ministry of Treasury and Finance are regulated by the "COMMUNIQUE REGARDING DECISION NO. 32 ON THE PROTECTION OF THE VALUE OF TURKISH CURRENCY (“the Communiqué”) (Communiqué No: 2008-32/34)".
-
18.4.2022
Charging Service Regulation Regarding Electric Vehicles Is Published!
In the context of the Charging Service Regulation (“Regulation”), published in the Official Gazette dated 02.04.2022 and numbered 31797, which entered into force on the date of its publication, the procedures and principles regarding the establishment of charging units and stations where electrical energy is supplied to electric vehicles, administration of stations connected to the charging network, provisions of charging service are determined. In this study, the main principles envisaged by the Regulation will be reviewed.