Contrary to the expectations of experts and insiders, on February 10, the UK tightened the existing sanctions regime against Russian individuals. This is not yet a sanctions list, but an updated tool that can be used to strike at Russian elites.
What has changed?
In accordance with the act, restrictions can be introduced against individuals and legal entities representing economic sectors important to the Russian government. First of all, we are talking about the mining and defense industries, as well as IT and banks.
How effective can the new tool be?
Overall, it contains extremely broad language. Let’s consider a possible scenario for introducing sanctions using the example of Roman Abramovich and Alisher Usmanov.
In accordance with the second and fourth points, sanctions can be imposed against individuals who benefit from the Russian government. These, in particular, include persons operating in an industry of strategic importance for the Government of the Russian Federation. Abramovich is a key beneficiary of the mining company Evraz. Such companies are classified as “strategic” by the seventh paragraph of the new law. But Abramovich does not meet the criteria for beneficial ownership of such a company – he must have more than 50% of the shares.
Alisher Usmanov is the beneficial owner of Metalloinvest (49%). Thus, Metalloinvest, being a mining company, may fall under sanctions, but Alisher Usmanov will not face this because of the 50%+ rule. On the other hand, Usmanov also has other Russian assets – for example, IKS Holding, the share of Usmanov’s structures in which is 100%. This company is engaged in investment, management and consolidation in the telecom media and technology market, and the British have included ICT in the list of strategic sectors. Could this serve as a sufficient basis for sanctions? Quite, especially considering the scale of ICS Holding’s business.
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