In recent days, the situation on the Ukrainian border with Russia and fears over an invasion of Ukraine resulted in a series of diplomatic talks between Russia, US, NATO, and the EU. The US and EU are discussing possible sanctions measures to be imposed against Russia in the event of an invasion. The US House and Senate are reviewing a proposed bill that includes deterrence measures with respect to Russia, while the EU leaders refuse to be specific about the measures, as they believe this maximizes their deterrent effect (and to prevent Russia from preparing to mitigate those sanctions).

We have taken a look at the current statements made by representatives of the US, EU, UK and Canada in relation to ongoing Ukraine-Russia crisis and their remarks of potential Russia sanctions.

Coverage of the proposed sanctions imposed by the US

The US is threatening to impose severe sanctions if Russia invades Ukraine. 

A 30 January 2022 article from Reuters notes that some measures may take effect before any invasion. The Guardian also reported that there are disagreements between the Democratic and Republican parties over whether measures should be imposed before or after any Russian invasion. 

At the moment, an identical bill entitled “Defending Ukraine Sovereignty Act of 2022” was introduced in the House on 21 January 2022 and in the Senate on 12 January 2022. According to the US Legislative Process, bills are presented to the US President for action when approved in identical form by both the House of Representatives and the Senate. 


As deterrence measures against further military escalation and aggression by Russia with respect to Ukraine, the bill proposes the imposition of the following sanctions:

  • Sanctions on officials of the government of Russia, including the President, the Prime Minster, the Foreign Minister, the Minister of Defense, the Chief of the Armed Forces in Russia, etc. 
  • Sanctions on foreign persons that are senior officials of any branch of the armed forces of Russia; senior officials of the Government of Russia, including any intelligence agencies or security services of Russia
  • Sanctions on the Russian financial institutions, such as Sberbank, VTB, Gazprombank, VEB.RF, The Russian Direct Investment Fund, Credit Bank of Moscow, Alfa Bank, Rosselkhozbank, FC Bank Otkritie, Promsvyazbank, Sovcombank, Transkapitalbank, and their subsidiaries. Other financial institutions owned by the Russian Government can also be added to the list. 
  • Sanctions on providers or/and enablers of specialized financial messaging services to sanctioned Russian financial institutions 
  • Prohibition on and imposition of sanctions with respect to transactions involving Russian sovereign debt issued on or after the date of enactment of this act. 
  • Review of sanctions with respect to Nord Stream 2: possible removal of waiver of sanctions against Nord Stream 2 AG and its CEO; review of possible and available measures to prevent Nord Stream 2 pipeline. 
  • Imposition of sanctions with respect to Russian extractive industries such as: oil and gas extraction and production; coal extraction, mining and production; minerals extraction and processing. 

The sanctions measures with respect to foreign persons include property blocking (blocking and prohibition of all transactions in all property and interests in property of the foreign person if such property and interests in property are in the United States, come within the United States, or are or come within the possession or control of a United States person) and travel bans.

During the opening of the ACAMS Annual Sanctions Space Summit, a representative of the White House National Security Council, Peter Harrell, stated that sanctioning Russia is the second step the US Government is willing to take in case of failure to resolve the crisis through diplomacy. He however stated that the approach to sanctioning Russia this time will be “start high – stay high”. The US Government would aim to introduce measures that will have immediate impact on Russia. The Director of the US Department of Treasury’s Office of Foreign Assets Control, Andrea Gacki, stated during the Sanctions Space Summit that they are looking at significant actions taken against Russia which however cannot be disclosed at the moment because it depends on Russia and further actions it may take.

Sanctioning measures will likely include export control sanctions that will target industries which are believed to be strategic for the Russian economy. 

Coverage of proposed sanctions by the EU

According to Bloomberg, the discussion over a new package of sanctions against Russia is being discussed among the US and the European Union. The measures broadly can be categorised as follows: restrictions on the refinancing of Russian sovereign debt, financial sanctions, sanctions on Russian individuals and entities close to the Russian government, as well as trade-related measures covering key goods and sectors. There could also be export controls and bans in technology and sensitive industries, such as semi-conductors, aerospace, defense, cyber surveillance technologies, luxury goods, and equipment used in the oil industry. There is broad agreement, according to this article, that the sanctions would be implemented in the event of an invasion. 

  • The financial sanctions might prohibit Russia’s biggest banks from making interbank operations in US dollars; financial restrictions of selected banks and state-linked entities might include asset freezes, limits on transactions, borrowing, and access to capital markets.
  •  Some EU member states might seek exemptions for the energy sector from a potential clearing ban, as well as protection for some existing contracts. 
  • The EU is considering the imposition of sanctions on Russian oligarchs and entities, including state-owned entities.
  • Germany might prevent the Nord Stream 2 pipeline from operating in case of an invasion. Media reports suggest that there are close discussions between the US and the EU member states on potential Russia sanctions due to closer EU-Russia relations. The scope of sanctions imposed against Russia by the EU might not fully align with the US; however, both parties are united in their goal to impose severe costs on Russia in the event of an invasion. 

Coverage of proposed sanctions by the UK

The UK warned of “unprecedented sanctions” against Russia should Russia invade Ukraine.

British Foreign Secretary Liz Truss stated that the government of the UK is preparing new legislation to expand sanctions against Russia to be in place on 10 February 2022. The legislation will not impose sanctions automatically but provide for additional powers to do so. Truss commented that the new measures will allow the UK to act “in lockstep with the US and other allies to freeze assets and ban travel.” 

Assets of designated entities and individuals will be frozen, and no UK business or individual would be able to transact with them. Names of entities and individuals under threat of the UK sanctions were not disclosed.

Coverage of proposed sanctions by Canada

Foreign Affairs Minister of Canada Melanie Joly stated that “Russia would face severe sanctions if it makes further moves against Ukraine”. Joly was speaking after meeting her counterpart in the EU in Brussels. Canada sanctioned more than 440 individuals and entities since the first measures were imposed in 2014 which are aligned with those of the EU and UK.  

Cutting Russia from SWIFT

According to various media reports, cutting Russia from the SWIFT international payment system might be a problematic move and cause disruption for Western economies, though this measure is still under consideration. 

Most experts agree that cutting Russia from SWIFT would have a disastrous effect not only on Russia but also on economies of Western countries that have close economic ties with Russia. Therefore, the risk of this sanctions measure being implemented is considered low.  

Challenges of Sanctions Due Diligence in Russia

In response to Western sanctions, the Russian Government introduced countermeasures. 

  • On 20 September 2021 the Russian President signed a decree extending the effect of certain special economic measures against countries that have imposed sanctions against Russia from 1 January 2022 to 31 December 2022. These economic measures ban import of US and EU agricultural products;
  • Federal laws were enforced in Russia that authorize Russian companies subject to international sanctions to opt out from disclosing shareholders, directors, financial information, trade deals, public tenders, affiliates, etc. We have seen a number of Russian companies that have resorted to these laws allowing them to stop disclosing information that could expose them to the negative effects of sanctions;
  • Complex shareholding structures, use of offshore jurisdictions, and divestment of ownership interests as an evasion technique make it difficult for foreign companies to understand sanctions risk exposure when dealing with their counterparties.

Preparations taking place in light of potential Russia sanctions

  • The Financial Times wrote on 26 January that the European Central Bank asked lenders in Europe about their exposure to Russia and how they would manage different scenarios including sanctions against Russia. According to the European Banking Authority, Societe Generale SA, UniCredit SpA and Raiffeisen Bank International AG are among the largest European banks with operations in Russia. 
  • On 28 January 2022, it was reported that the Biden administration team briefed the largest US banks on possible sanctions against Russia as part of its efforts to ensure that such actions will not disrupt the global financial system. “Members of the National Security Council and other senior administration officials spoke with executives from banks including Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc. as they assess how to proceed”. The Biden Administration is concerned with possible spill-over effects and are trying to work around ways to reduce those spill-overs. 
  •  Designation of the Russian financial institutions could have a devastating effect on the Russian economy and its ability to transact with foreign financial institutions. Sberbank and VTB are the largest banks in Russia through which the majority of Russian companies transact.
  •  Sanctions measures being discussed at the moment would have collateral costs for companies with exposure to Russia. Companies are advised to evaluate their current relationships with Russian counterparties, identify areas of exposure, and risk stress different scenarios of potential sanctions. Companies are also advised to get in touch with regulatory agencies for further guidance. 
  • Export control measures that are on the table of potential sanctions would impact sectors such as semi-conductors, aerospace, defense, cyber surveillance technologies, luxury goods and oil industry. 
  • In case of sanctions imposed on the financial industry of Russia, it is advised to assess alternative payment methods, including currency transactions. 


We at KPMG understand that operating in a complex sanctions environment presents a challenge where failure to comply with sanctions regime could lead to criminal and administrative liability.

We can help you with understanding of sanctions that may impact your business cooperation with counterparties in Russia. 

Read more about our services

Erik Arvnes

Erik Arvnes, Partner

Christy Lorgen

Christy Lorgen, Director