New UK sanctions will not affect the key sectors of the Russian Federation

The UK announced the expansion of sanctions against the mining, transport and energy sectors of Russia. In total, 86 individuals and legal entities, including those from the financial sector, were included in the list. About this May 19 reported British government. The new package was unveiled simultaneously with the start of the G7 summit (G7; unites France, USA, UK, Germany, Japan, Italy and Canada) in Hiroshima.

The Fesco group and its parent company “Far Eastern Shipping Company“(FESCO). The group’s press service told Vedomosti that the sanctions “would not affect the work,” since various restrictions “were in effect before.”

In early March, the UK banned ships from Russia from entering its ports, and from April 17, the ports of the EU countries are also closed to Russian ships.

Fesco owns the largest container terminal in the Far East – the Vladivostok Commercial Sea Port. The group also owns the railway transportation operator Transgarant and 22 transport vessels for the sea transportation of goods. In early January, the Khamovnichesky Court of Moscow satisfied the claim of the Prosecutor General’s Office for the conversion in favor of the state of 92.4% of the shares of FESCO, previously owned by the founder of the Summa group, Ziyavudin Magomedov, his brother Magomed, their partners and several offshore companies (Vedomosti wrote about this on January 11) .

Forward Legal lawyer Lyudmila Lukyanova recalled that Fesco was also given “special instructions” on sanctions against its own vessels. “The UK prohibits ports on its territory from providing technical support to such vessels and reserves the right to detain them,” Lukyanova said. The lawyer said restrictions on Fesco could bring “a number of accompanying problems,” from insurance for international ships to the ability to refuel them.

She also drew attention to the fact that Fesco was included in the British list for the first time. With regard to companies from the new list, according to the lawyer, the UK has provided for the most severe type of sanctions – blocking. They mean a complete freeze of assets, accounts, money on correspondent accounts of British banks, a ban on financial transactions and settlements in pounds without special permission. Moreover, such sanctions, according to the lawyer, operate in the UK and abroad.

The sanctions list also includes the shipping companies Pawell Shipping Co, Volga Shipping Company, Sovfrakht, M-Leasing, MG-Flot, Sc South LLC (SK-South, a subsidiary of the Oboronlogistics group). Vedomosti sent them requests.

The press service of Oboronlogistics told Vedomosti that there was “no official information from the UK yet.” They recalled that Oboronlogistics has already been under US sanctions since 2017, and has been on the UK sanctions list since March 2023. Sun Ship Management, a subsidiary of Sovcomflot, which itself has been in sanctions lists of the UK and the EU. In May, the company announced the sale of part of its fleet (Vedomosti wrote about this on May 6).

“Restrictions against Severstal by the UK were in effect before, as the controlling shareholder was included in the sanctions list of the country [Алексей Мордашов]. The additionally imposed sanctions will not affect its activities,” a Severstal representative told Vedomosti.

Mordashov came under British sanctions in mid-March 2022. At the same time, the main owner of MMK Viktor Rashnikov and the former controlling shareholder of TMK Dmitry Pumpyansky (withdrew from the beneficiaries and the board of directors of TMK in March 2022) were included in the UK sanctions list.

In April 2022, the UK banned the import of Russian steel products. And after the introduction of a 35% import duty on Russian copper among other non-ferrous metals in March last year, the London Metal Exchange (LME) banned its storage in UK-based warehouses certified by this trading platform.

“De facto sales [российских] metals and interaction [попавших под новые британские санкции] Russian companies with the financial and commodity markets of Europe were minimized last year, so we consider the sanctions rather a political gesture of London at the start of the G7 summit,” analysts write in a review dated May 19 “BCS investment world.

In early March 2022, the London Bullion Market Association (LBMA), which maintains a record of world-renowned gold suppliers, suspended the Good Delivery status (“reliable delivery”) for Russian refineries. This made it almost impossible to sell Russian gold through London, the main global hub for the sale of this precious metal. Then the British authorities imposed blocking restrictions against five Russian banks, two of which are “Gazprombank” And “Rosselkhozbank” – occupied leading positions in international transactions with physical gold (before the start of the NWO in Ukraine, Russian gold was exported only by banks). Also under British sanctions were other major sellers of gold from Russia – Sberbank, VTBPSB and “Sovcombank“. In July 2022, a ban was introduced on the import of Russian gold into the UK in general.

According to Veles Capital analyst Sergey Zhitelev, the new British sanctions will not affect the activities “Poles”. According to the expert, the company does not sell gold to London, and after switching to direct export – without the mediation of banks – it does not sell the precious metal in “unfriendly” countries. “New sanctions can only affect payments on Eurobonds and, possibly, the company’s receipts,” he argues.

Mikhail Burmistrov, CEO of Infoline Analytics, notes that most companies have already prepared for the tightening of the sanctions regime by converting financial transactions into friendly currencies.

The sanctions list published on May 19 includes 9 structures associated with Rosatom. In particular, Atomflot (operator of the nuclear-powered icebreaker fleet), Yumateks division for advanced materials and technologies, Rener’s energy storage integrator and a number of research institutes were included in it. Earlier, other structures of the state corporation were already included in the British sanctions list. And in March, Alexei Likhachev, CEO of Rosatom, was included in the British sanctions list.

In April 2023, the United States imposed sanctions against Rusatom Overseas (a Rosatom structure responsible for building nuclear science and technology centers abroad). Rusatom Overseas, which has branches in Germany, Jordan and Saudi Arabia, is promoting non-energy solutions to the international market, including in the field of hydrogen energy. At the same time, attempts by European politicians to take restrictive measures against the Russian state nuclear energy corporation have not yet been successful. On May 18, CNN, citing a senior European Union (EU) official, reported that the EU did not include Rosatom in the 11th package of anti-Russian sanctions. In March, a TASS source in the EU Foreign Service said that the issue of sanctions against Rosatom “remains on the negotiating table, but it is difficult to find an alternative to Russian nuclear fuel.”

Rosatom did not respond to a request at the time of publication.

Alexander Uvarov, editor-in-chief of the industry resource Atominfo.ru, notes that the sanctions are still targeted and do not affect the main business of Rosatom – the fuel division TVEL, construction of a nuclear power plant (Atomstroyexport), power generation (Rosenergoatom). “Americans, in the first place, fell victim to their arrogance. During the operation of HEU-LEU (the agreement, which was in force in 1993-2021, provided for the irreversible processing of Russian highly enriched weapons-grade uranium into low-enriched for nuclear power plants – Vedomosti), the United States was unable to create its own centrifuge technologies [обогащения]. The old enterprises of the Cold War era, which had been kept in a hot reserve for a long time, went under the knife. As a result, now they have no alternative to Rosatom,” Uvarov explained. According to his estimates, the Russian state corporation has at least 4-5 years of “immunity” from sanctions. So much time, according to Uvarov, is needed to expand the production of enriched uranium in Europe, which, in fact, has not even begun yet. It will also have to invest “several billion euros” in this, he adds.

German Kostrinsky and Daria Savenkova took part in the preparation of the article