The legislation targets those "who are of economic or strategic importance to Putin's regime"
New Zealand has voiced its condemnation of Russia’s war on Ukraine with the unanimous passing of the landmark Russia Sanctions Act by Parliament.
According to Foreign Minister Nanaia Mahuta, the legislation “provides a broad legal framework which enables New Zealand to impose economic sanctions targeting specific people, and companies, assets and services involved with Russia’s aggression.” The Act allows the New Zealand government to halt activities like the sale and purchase of property, the movement of ships and planes in the country’s waters or airspace, imports and exports, and the lending and movement of money.
“This is not about targeting people simply for being Russian. Sanctions will target those who are linked to Russia’s war in Ukraine, or who are of economic or strategic importance to Putin’s regime,” Mahuta explained. “This could include family members of key players, Russian banks, and other countries like Belarus who actively support Russia.”
She confirmed that the first tranche of sanctions are being developed “at pace,” with a release anticipated for next week.
“We acted quickly to condemn Putin’s war and immediately implemented a suite of measures in response including travel bans. But Russia has not ceased its unprovoked, unjustified and inhumane aggression on innocent people in Ukraine so a greater response was required,” Mahuta said.
“Despite the UN General Assembly voting 141 to 5 condemning Russia’s actions, Russia has vetoed any UN sanctions. As such, while a bill of this nature has never been brought before our Parliament, we have done this strong in the knowledge we are acting in line with the international community.”
Buddle Findlay partners Alastair Hercus, Tony Dellow and Susie Kilty pointed out in a blog post on the firm’s website that New Zealand businesses that are linked to Russia need to conduct targeted internal reviews to ensure that they will not be penalised for breaching sanctions law. Under the Russia Sanctions Act, violators can be imprisoned for seven years and/or be slapped with maximum fines of $100,000 (individuals) and $1m (entities).
Hercus, Dellow and Kilty outlined the goals of such reviews as follows:
- determine whether the business is subject to overseas sanctions laws by mapping out the ownership and management (including the nationalities of shareholders, directors, senior management, and employees), as well as the overseas presence, trade routes (including vessels and aircraft), origin and destination of goods, and currencies used
- examine whether the business has connections or dealings, directly or indirectly, with entities and individuals subject to overseas sanctions regimes, including by reviewing financial, contractual, or trading relationships, as well as products and services
- assess what the business needs to do to ensure compliance with sanctions, as well as how to monitor and detect any changes, and report on and manage the risks
- consider any wider-reaching consequences for the business, for example:
- assess any potential disruption to supply chains as a result of manufacturers, suppliers, transporters, agents, their insurance companies or their banks being subject to sanctions
- check for any relevant contract termination provisions, including force majeure
- ensure compliance with due diligence and risk reporting
