UK and US Sanction More Elements of Russian Shipping

Western leaders starting their three-day G7 Summit in Japan announced a broad new wave of sanctions targeting Russia designed they said to further crippler the Russian economy and limit its ability to finance and pursue the war in Ukraine. While much of the shipping infrastructure has been under sanctions for more than a year, new elements are being included in the next wave of sanctions which also increases efforts touching on the energy, metals, defense, transport, finance, and other sectors. The United States is expanding its efforts into services ranging from architecture to engineering, construction, and manufacturing.

“Our collective efforts have cut Russia off from key inputs it needs to equip its military and is drastically limiting the revenue the Kremlin receives to fund its war machine,” said Secretary of the Treasury Janet Yellen detailing the U.S. portion of the new initiative. “Today’s actions will further tighten the vise on Putin’s ability to wage his barbaric invasion and will advance our global efforts to cut off Russian attempts to evade sanctions.”

The U.S. announced the most sweeping action listing over 300 individual elements targeting 22 individuals and 104 entities reaching not only deep into Russia but a total of more than 20 countries. Among the sectors the U.S. is targeting are future energy, military procurement and the elements used to avoid existing sanctions, metals and mining, technology, and a raft of individuals. The State Department designated or blocked the property of almost 200 individuals, entities, vessels, and aircraft.

The sanctions specific to shipping and shipbuilding single out elements including FSUE Atomflot, a subsidiary of Rosatom that maintains a fleet of nuclear-powered icebreakers. The effort also targets the development of the Arctic port of Indiga and Akvamarin Limited developer of the port. Four companies involved in the planning of the port were also added to the designated list while in shipbuilding they added Samusskiy Sudostroitelno Sudoremontniy Zavod, a Russia-based shipbuilding and repair company that has constructed up to 10 vessels intended to facilitate logistics and cargo delivery in Russia’s arctic region.

The U.S. is also targeting efforts between Russian and Iran that are expanding the logistic network. Khazar Sea Shipping Lines, an Iranian shipping company and a subsidiary of the Islamic Republic of Iran Shipping Lines, was designated with the U.S. citing over 60 port calls in Russia over the past year. Two other companies linked to the shipping trade with Iran were also designated.

Similarly, the UK government announced sanctions on 86 individuals and entities targeting sectors including energy, metals, the military, finance, and banking, as well as further elements in transport. Both the U.S. and the UK specifically cited examples of the thief and shipment of Ukrainian grain among their new sanctions. The UK cites examples of the targeted entities that have reportedly stolen grain and other agricultural goods from warehouses and fields in the temporarily occupied territories in Ukraine and shipped them out, marking them as Russian goods.

The U.S. is including SSK Port as an operator in the marine sector while also expanding the sanctions to a Syrian-flagged general cargo vessel, the Pawell (3,000 dwt), that they charge routinely engages in maritime evasion techniques, including disabling the vessel’s onboard automatic identification system (AIS) to conceal its location and the origin of its cargo. The U.S. also cites the Russian management company operating the Pawell, while the UK also listed the vessel and its shipping company. They noted that the Pawell, a 39-year-old vessel that is now transporting stolen grain, has been detained six times since 2020 for a series of international safety management-related deficiencies.

Other elements of the sweeping effort are also going after illegal shipments, the dark fleet, and other sanction-busting efforts. The UK included six shipping companies and managers including ones directly tied to Sovcomflot, which itself has been under the sanctions for more than a year. Fesco and Volga Shipping are also among the shipping companies targeted for their links to grain theft and effort to avoid existing sanctions.

The UK said it is not finished with the expansion of the efforts. Prime Minister Rishi Sunak announced during the G7 conference that the UK would be implementing new import bans on Russian diamonds and metals. 

Addressing the implication of the sanctions, UK Foreign Secretary James Cleverly said the efforts would extend beyond a cessation of the war. He confirmed that the UK intends that Russia’s assets will remain immobilized until Russia agrees to pay for the damage it has caused in Ukraine.