On 03 May 2022, Russian President signed Decree No. 252 (the “Decree”) introducing framework regulations on new Russian counter-sanctions. The Decree does not provide for a specific list of persons targeted by the counter-sanctions (the “Designated Persons”), which is to be adopted by the Russian Government via implementing regulations by mid-May. The Decree does not purport to target persons other than the Designated Persons. However, the Decree imposes restrictions on dealing with the Designated Persons, which may affect Russian companies and Russian branches and subsidiaries of foreign companies.

As of now, in the absence of implementing regulations, the Decree does not by itself lead to new restrictions. However, once the list of the Designated Persons is released, their legal status in Russia will be roughly similar to the restrictions applicable to persons targeted by EU or US sanctions. In particular, Russian individuals, entities and federal, regional and municipal authorities (the “Russian Persons”) will be subject to the following obligations:

• not to enter into transactions with the Designated Persons and persons controlled by the Designated Persons; 
• not to fulfill existing obligations vis-à-vis the Designated Persons even if required by existing contracts; 
• not to perform financial transactions benefitting the Designated Persons; 
• not to export products or raw materials produced in Russia for the benefit of the Designated Persons or in favor of third parties on behalf of the Designated Persons. 

Importantly, it appears that Russian branches and subsidiaries of foreign companies will also be treated as the Russian Persons and therefore bound to comply with the Decree when dealing with the Designated Persons. Therefore, after the list of Designated Persons is released, we advise to review existing contracts and dealings and carefully consider further steps via legal advice.

We will keep you informed on the relevant developments in due course.