Home Economy, Policy & Business What is the local impact of Singapore’s financial sanctions on Russia?

What is the local impact of Singapore’s financial sanctions on Russia?

Obligations of financial institutions in Singapore
Associate at RHTLaw Asia LLP

On the heels of the first month, or ‘Monthsary’ since the Monetary Authority of Singapore (MAS) issued MAS Notice SNR-N01 and SNR-N02 (collectively, the “Notices”) setting out how the sanctions would apply to all financial institutions in Singapore, this article highlights the important points from the Notices.

Briefly, MAS Notice SNR-N01 detail the sanctions that apply to all financial institutions, while MAS Notice SNR-N02 set out the exceptions to the sanctions regime.

Scope of the Notices

All Singapore financial institutions are subject to MAS Notices SNR-N01 and SNR-N02. For the purposes of the Notices, financial institutions are entities that are generally under the purview of the MAS, which include those that are licensed, or regulated by the same.

Some categories of financial institutions include:

  • Payment Service Providers
  • Investment Banks & Retail Banks
  • Approved Exchange or Recognised Market Operators
  • Fund Managers
  • Trustees
  • Credit Rating Agencies

Sanctioned entities and individuals (designated bank and designated entities)

The sanctions apply to the assets and/or economic resources of the following entities:

  • VTB Bank Public Joint Stock Company
  • The Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank
  • Promsvyazbank Public Joint Stock Company
  • Bank Rossiya

Further to the above, the sanctions also apply to the:

  • Russian Government
  • Russia’s Central Bank
  • Anyone involved in the sale, transfer, or export of goods or technology to the breakaway regions of Donetsk and Luhansk in relation to (i) energy, (ii) telecommunications, (iii) transportation, and (iv) prospecting, and exploration of resources, namely gas, oil and other minerals.

Ambit of sanction


“Designated Banks” means VTB Bank Public Joint Stock Company, The Corporation Bank for Development and Foreign Economic Affairs Vnesheconombank, Promsvyazbank Public Joint Stock Company, and Bank Rossiya, and all entities owned or controlled by, directly or indirectly, or acting on behalf of or under the direction of, the foregoing entities, and each a “Designated Bank”.

“Designated Entities” are those involved in activities related to the export, transhipment or transit through Singapore or any other jurisdiction to Russia of items specified in the List of Military Goods or in the List of Dual-Use Goods, both set out in the Schedule to the Strategic Goods (Control) Order 2021, and each entity a “Designated Entity”.


  • On trade: Financial institutions may not engage in (i) financial transactions, (ii) the provision or facilitation of financial assistance to, or (iii) any transfer of assets or resources to, any Designated Entity or Designated Bank.
  • On dealing: Financial institutions shall not, directly or indirectly, (i) establish business relations with, (ii) conduct financial transactions with, (iii) provide/facilitate the provision of financial assistance to, or (iv) transfer any assets or resources to, Designated Banks or Designated Entities.
  • On raising new funds: Financial institutions shall not, directly or indirectly, purchase, sell, provide financial services for, provide loans or enter into credit arrangements with, assist in the issuance of, or otherwise deal with, securities or certifiable instruments with the Russian government, the Central Bank of Russia and their respective affiliates.
  • On cryptocurrency and related DPT transactions: Financial institutions shall not participate in nor provide support for any ‘digital payment transactions’, the proceeds of which may be utilised for sanctioned activities. For the purposes of these Notices, ‘digital payment transactions’ shall include, without limitation (i) the offer to purchase, sell, or exchange digital payment tokens, (ii) the brokering of digital payment token transactions, and (iii) the arranging of financing for digital payment token transactions. Digital payment token service providers are restricted from facilitating transactions that could aid the circumvention of the financial measures set out in the relevant Notice.
  • On Donetsk and Luhansk: Financial institutions shall not deal with firms and individuals operating in restricted sectors located in Donestsk and Luhansk.

Freezing of assets

Any financial institution that holds or controls the assets and/or economic resources of a Designated Bank or Designated Entity must freeze such assets and/or economic resources.

Exceptions to the regime

In MAS Notice SNR-N02, the MAS outlines the following exceptions to the sanctions regime:

  • Payments for basic expenses and fees for certain services such as employee remuneration, CPF contributions, insurance premiums, tax, mortgage payments and utility charges.
  • Payments made only for the purpose of paying certain expenses such as service charges incurred for the maintenance of frozen monies, financial assets, or economic resources, or reasonable professional fees and related expenditures for the provision of audit, tax, or legal services.

Obligation to report

Any contravention of the sanctions system must be reported. Financial institutions have to report if they are in possession of, or have control over any assets and/or economic resources owned or controlled, directly or indirectly, by any Designated Bank or Designated Entity. The reporting obligation also extends to any information in their possession about actual or potential breaches of sanctions.

Practical implications

Financial institutions must re-evaluate their exposure to Russia and implement appropriate risk-mitigation measures based on a risk-based assessment. Above all, financial institutions must examine the operational parts of their businesses to verify that all aspects of their operations are compatible with the Notices. Even if the financial institutions themselves do not follow the sanctions imposed by other jurisdictions, their personnel from these other jurisdictions may be obligated to do so. Furthermore, financial institutions must exercise caution when dealing with sanctioned enterprises or their affiliates, and avoid investing in freshly issued Russian assets that are guaranteed by the Russian government or its central bank.

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Saravanan Rathakrishnan
Associate at RHTLaw Asia LLP

Saravanan Rathakrishnan is an associate of RHTLaw Asia's Corporate and Capital Markets Practice. Funds, capital markets, mergers and acquisitions are among his areas of expertise. Saravanan is engaged in the startup community, consulting a variety of startups in relation to contract terms, regulatory obligations, legal commitments and corporate structure. He maintains a keen interest in finance, economics, and law and has published a host of legal, economic and finance articles.

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