Luxembourg Regulator calls on supervised entities to enforce restrictive measures against Russia and Belarus

In light of ongoing events across Russia and Ukraine, several Western countries including the US, the EU, the UK and Switzerland have imposed new sanctions on Russia and Belarus related businesses significantly extending existing sanctions and export controls. The current sanctions include restrictions on several Russian financial institutions, regional embargoes, blocking measures, sovereign debt restrictions, commercial restrictions and measures targeting certain individuals and their assets.

This is a complex and rapidly evolving topic and further measures may be introduced in the coming days. The CSSF has called on supervised entities to enforce the sanctions, including any attempted transactions, and apply the greatest possible vigilance with respect to risks related to IT security and cyberattacks (currently only available in French:https://www.cssf.lu/en/2022/03/circular-letter-to-all-persons-and-entities-supervised-by-the-cssf/).

The impact of the sanctions cannot be underestimated considering the nine- and ten-figure settlements against non-U.S. entities engaged in trade with countries subject to U.S. embargoes. The global scope of certain measures requires careful consideration in a Luxembourg cross-border context.

How can our firm advise

We are tight-knit independent business law firm with a unique combination of regulatory and dispute resolution expertise, including sanctions related matters and their potential knock-on effects on Luxembourg incorporated institutions. We have successfully defended European institutions and their directors vis-à-vis US authorities for sanctions involving trade embargoes. We approach each matter with intensity, thoroughness and delicacy and have investigated the below topics:

contractual review of main investor and/or finance documents assessing contractual liability risks for breach of contract
assessment of risk of freezing orders and/or conservative measures taken in Luxembourg by disgruntled Russian counterparties as well as counterstrategy
freezing orders and conservative measures taken over assets located in Luxembourg
data leakage, cyberattack and consequent liability risk towards the relevant institution’s clients
management liability assessment in light of criminal nature of infringement of some sanctions
interplay of US sanctions and EU “blocking” measures

We track the evolvement of the sanctions and their impact on global players closely. Do not hesitate to get in touch should you require assistance.