The UK has imposed sanctions against a number of Russian gold and copper producers

Russian gold and copper producers Nordgold and UMMC are now not only on the US SDN list, but also on the UK sanctions list. It also included the gold mining company Highland Gold of Vladislav Sviblov, which until now has not been affected by restrictions, as well as a number of other companies and citizens associated with the mining and processing of non-ferrous and precious metals. However, experts and lawyers do not expect really serious consequences, noting that the industry has already restructured and established supplies to friendly countries, and the domestic market is also recovering.

The UK has imposed sanctions against a number of large Russian gold and copper producers. In particular, this is Nordgold (together with Marina Mordashova, who owns 52% of the shares, and CEO Georgy Smirnov). The company is already under sanctions from Washington, and the Mordashov family is on the blacklists of the United States and Canada. Also subject to British sanctions was UMMC, which is already on the US SDN list.

New faces in sanctions lists steel Highland Gold and its owner Vladislav Sviblov, the owner of the Yuzhuralzoloto group of companies (UGK) Konstantin Strukov (the company was not affected by the restrictions), the Krastsvetmet refinery (owned by the Krasnoyarsk Territory).

In March 2022, the London Bullion Market Association (LBMA) suspended the provision the latter, like other large Russian refineries, has the status of a reliable supplier (Good Delivery). G7 and EU countries in 2022 in full banned imports gold from Russia.

Gold mining companies subject to sanctions are among the top 10 in terms of production in the Russian Federation. Industry leaders Polyus and Polymetal (the holding company for Polymetal’s Russian assets) were included in the US SDN list in May.

The companies do not comment on the impact of sanctions on business. Before the outbreak of hostilities in Ukraine, the UK was an important market for Russian gold. But since then, companies have already redirected supplies to the UAE, China and Turkey. Judging by public statements by top industry managers, sales in Russia have also recovered. “Polyus and the Russian Polymetal sell gold mainly on the domestic market and do not export anything to either the UK or the USA,” said the Sinara investment bank in a May commentary.

“If this or that person is included in the US sanctions lists, especially when we are talking about the SDN list, I would call the application of sanctions by the UK, EU countries and other states that have joined the restrictions against Russian individuals and legal entities formal,” — notes managing partner of the Veta expert group Ilya Zharsky.

American blocking sanctions are extraterritorial in nature, the expert explains, therefore the ban on the provision of financial services, investments, loans, account servicing and conclusion of contracts is most often blocked during compliance procedures in most countries.

According to Mr. Zharsky, the decision of the British authorities, most likely, “will not entail any significant consequences for the companies.” “The UK quite often adds to the sanctions lists of organizations and individuals that were previously included in the lists of the EU and the USA, this is a common practice, thus restrictions that apply de facto are fixed de jure, at the level of acts with legal force,” clarifies lawyer.

The obligation to comply with sanctions depends on the specific circumstances, but “there will certainly be companies (traders, banks, end users) for whom the inclusion of Russian gold mining companies on the UK blacklists will create problems,” clarifies partner in the international trade law, customs, sanctions practice, Melling , Voitishkin and partners” Vladimir Efremov. However, he also admits that now “the effect of these measures will be significantly less compared to what it could have been, for example, a year ago.”

Evgeniy Zainullin