Friday, 20 May 2022

Sanctions and restrictions against Russia in response to its invasion of Ukraine

5 min read

Singapore is a consistent and staunch supporter of international law and the principles enshrined in the United Nations (UN) Charter. The sovereignty, political independence, and territorial integrity of all countries, big and small, must be respected. Singapore takes any violation of these core principles seriously, as they are fundamental to the survival of Singapore, a small state.

Russia’s invasion of Ukraine contravenes the UN Charter and is a clear and gross violation of international law. While we continue to value good relations with Russia and the Russian people, we cannot accept the Russian government’s violation of the sovereignty and territorial integrity of another sovereign state. For a small state like Singapore, this is not a theoretical principle, but a dangerous precedent. This is why Singapore has strongly condemned Russia’s unprovoked attack on Ukraine.

Since the UNSC resolution to condemn Russia’s aggression against Ukraine failed to pass due to Russia’s veto, and given the unprecedented gravity of Russia’s attack on Ukraine, Singapore’s Minister for Foreign Affairs has announced in his ministerial statement to parliament on the situation in Ukraine and its implications on 28 February 2022, that we will act in concert with many other like-minded countries to impose appropriate sanctions and restrictions against Russia.

These sanctions and restrictions aim to constrain Russia’s capacity to conduct war against Ukraine and undermine its sovereignty. We will impose export controls on items that can be directly used as weapons to inflict harm on or to subjugate the Ukrainians, as well as items that can contribute to offensive cyber operations. In this regard, we will impose a ban on the transfer to Russia of: (a) all items in the military goods list and (b) all items in the “electronics”, “computers”, and “telecommunications and information security” categories of the dual-use goods list of the strategic goods (control) order 2021.

We will impose financial measures targeted at designated Russian banks, entities and activities in Russia, and fund-raising activities benefiting the Russian government. Digital payment token service providers are specifically prohibited from facilitating transactions that could help to circumvent these financial measures. These measures apply to all financial institutions in Singapore, including banks, finance companies, insurers, capital markets intermediaries, securities exchanges and payment service providers.

Singapore’s export control measures on Russia
The Singapore strategic goods control system regulates the transfer (export, transit, and transshipment) of strategic goods which are generally military weapons or their parts as well as high technology goods, which could be used for both commercial and military purposes. Items subject to strategic goods control are listed in the Strategic Goods (Control) Order (SGCO) 2021.

In order to constrain Russia’s capacity to conduct its war in Ukraine and cyber aggression, all permit applications to Russia involving (a) all items on the list of military goods under the SGCO; and (b) all category codes under category 3 - electronics, category 4 - computers and category 5 – telecommunications and “information security” on the list of dual-use goods under the SGCO will be rejected. Please refer to the SGCO for the descriptions of the items in the affected category codes.

Singapore’s financial measures in relation to Russia
In response to Russia’s invasion of Ukraine, the Singapore government will impose financial measures targeted at designated Russian banks, entities and activities in Russia, and fund-raising activities benefiting the Russian government. Digital payment token service providers will be specifically prohibited from facilitating transactions that could aid the circumvention of the financial measures.

These measures apply to all financial institutions in Singapore, including banks, finance companies, insurers, capital markets intermediaries, securities exchanges, and payment service providers.

Financial institutions in Singapore will be prohibited from the following:
(a) Entering into transactions or establishing business relationships with the following Russian banks:

Where there are existing business relationships, financial institutions must freeze any assets and funds of these four banks.

(b) Providing financing or financial services in relation to the export from Singapore or any other jurisdiction of goods subject to Singapore’s export controls on Russia. These goods comprise all items in the military goods list and specified categories in the dual-use goods list of the SGCO 2021.

(c) Providing financial services in relation to designated Russian non-bank entities which are involved in activities in (b). Where there are existing business relationships, financial institutions must freeze any assets and funds of these designated entities. Details on the designation of non-bank entities will be provided subsequently.

(d) Entering into transactions or arrangements, or providing financial services that facilitate fundraising by:

The prohibitions apply to buying and selling new securities, providing financial services that facilitate new fundraising by, and making or participate in the making of any new loan to the above entities. The Singapore Government and Monetary Authority of Singapore (MAS) will also cease investing in newly issued securities of the above entities.

(e) Entering into transactions or providing financial services in relation to the following sectors, in the breakaway regions of Donetsk and Luhansk:

(f) Entering into or facilitating any transactions involving cryptocurrencies, to circumvent any of the above prohibitions in (a) to (e). The prohibited cryptocurrency transactions cover all transactions that involve cryptocurrencies and extend to the payment and settlement of transactions that relate to digital assets (such as non-fungible tokens).

The MAS will issue directions to all financial institutions shortly, setting out the details of the above measures.

Re-disseminated by The Asian Banker

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