Extraterritorial Sanctions Alert

Dentons published a client alert which concludes that Ukrainian sanctions can apply extraterritorially. 

Published on June 4, 2025, the report: “The extraterritorial effect of Ukrainian sanctions,”  analyzes a May 14, 2025, decision by the Supreme Court of Ukraine (Case No. 320/14459/24),

Key Points:

• Extraterritorial Application: Ukrainian sanctions, particularly asset-blocking measures under the Law of Ukraine No. 1644-VII “On Sanctions,” extend beyond national borders. They apply to assets and transactions involving sanctioned individuals, regardless of the jurisdiction where these assets are located or where transactions occur. 

• Invalidity of Foreign Transactions: Transactions executed outside Ukraine under foreign law that involve sanctioned individuals are not recognized by Ukrainian authorities. Such transactions are considered null and void if they aim to circumvent Ukrainian sanctions. 

• Registrar Obligations: Ukrainian registrars must refuse to register changes in the ultimate beneficial ownership (UBO) of legal entities if the previous UBO is a sanctioned person. Changes not recorded in the Ukrainian Unified State Register have no legal effect in Ukraine.

• Implications for Compliance: Entities engaging in transactions involving sanctioned persons must ensure compliance with Ukrainian sanctions laws, even if the transactions are conducted entirely outside Ukraine. Non-compliance may result in transactions being deemed invalid under Ukrainian law. 

This decision underscores the Ukrainian judiciary’s stance on the broad reach of its sanctions regime, emphasizing the need for international entities to consider Ukrainian sanctions compliance in their global operations.