Evraz sanctions center on a single direct designation: on May 5, 2022, the United Kingdom listed Evraz plc under the Russia (Sanctions) (EU Exit) Regulations 2019, freezing the company’s UK assets, banning new UK investment, and prohibiting UK persons from providing or receiving funds, goods, or services to or from the company. No other major jurisdiction has directly designated Evraz plc, but the UK measures reach far beyond UK borders through the ownership and control test, which pulls subsidiaries and counterparties worldwide into the compliance net.
Who Has Sanctioned Evraz
The UK Foreign, Commonwealth and Development Office designated Evraz plc under Regulation 5 of the Russia (Sanctions) (EU Exit) Regulations 2019, stating that Evraz is “obtaining a benefit from or supporting the Government of Russia,” particularly through its production of Russian railway infrastructure used to transport military equipment and troops.1GOV.UK. UK Sanctions List – Evraz plc Designation
The EU took a different route. It did not directly designate Evraz plc. Instead, it listed Roman Abramovich, who held roughly a 29% stake, as a designated person in March 2022 under Council Regulation (EU) No 269/2014, and noted “Evraz Group SA” and “LLC Evraz Holding” as associated entities.2EUR-Lex. Council Implementing Regulation (EU) 2022/427 EU persons still have to run full due diligence on Evraz-related transactions, because the Abramovich designation combined with the EU’s ownership and control rules can make dealings indirectly prohibited.
Neither the United States nor Canada has directly designated Evraz plc. OFAC has not placed Evraz on the Specially Designated Nationals list, and Canada has not listed the company under its Special Economic Measures Act. That is not a safe harbor. Abramovich has faced US enforcement actions related to sanctions evasion, and any transaction involving a sanctioned individual’s property interests can create risk regardless of whether the corporate entity itself is listed. US and Canadian entities also face exposure through the UK’s reach over transactions touching UK persons or the UK financial system.
What the UK Sanctions Prohibit
The designation triggers three overlapping categories of restrictions under the 2019 Regulations.3Legislation.gov.uk. The Russia (Sanctions) (EU Exit) Regulations 2019
- Asset freeze: all funds and economic resources owned, held, or controlled by Evraz plc within UK jurisdiction are frozen, and no UK person or entity can deal with those assets.
- Dealing prohibition: UK persons cannot provide funds, goods, or services to Evraz plc, or receive them from the company, and cannot facilitate transactions that would breach the restrictions.
- Investment ban: no UK person can make new investments in Evraz plc, including acquiring ownership interests, creating joint ventures, or opening new subsidiaries.
Shares held, owned, or controlled by a designated person count as “funds” under the regulations and must be frozen. OFSI has confirmed that dealing with frozen shares in any way that changes their ownership, character, or destination is prohibited without a licence.4GOV.UK. UK Financial Sanctions FAQs
How Subsidiaries Get Caught
Most parties transacting with the Evraz group will be dealing with a subsidiary rather than the parent, and UK sanctions extend automatically to entities the parent owns or controls. Regulation 7 of the 2019 Regulations sets a two-limb test. An entity is treated as designated if either limb is met.5GOV.UK. Ownership and Control Test in UK Financial Sanctions Regulations
- Ownership: the designated person holds more than 50% of the shares or voting rights, or can appoint or remove a majority of the board.
- Control: it is reasonable to expect that the designated person could, in most cases or in significant respects, ensure the entity’s affairs are conducted according to their wishes.
The control limb is deliberately broad. OFSI guidance points to dominant influence through shareholder agreements, indirect control of voting rights through front companies, or the practical ability to direct affairs by any means.6GOV.UK. Ownership and Control – Public Officials and Control Guidance
This is where the UK regime diverges from the US approach. OFAC’s 50 Percent Rule looks only at ownership. An entity controlled but not 50% or more owned by a blocked person is not automatically blocked under OFAC rules.7Office of Foreign Assets Control. Entities Owned by Blocked Persons (50% Rule) The UK test catches a wider range of entities through the control limb. Anyone transacting across both jurisdictions should apply the stricter test.
What Happened to Evraz North America
Because Evraz plc wholly owned Evraz North America (ENA), the ownership limb pulled ENA into the sanctions net even though it operated steel mills in the United States and Canada and was not itself named on any list. Third parties dealing with ENA risked breaching UK sanctions.
OFSI issued General Licence INT/2022/1710676 on April 29, 2022, under Regulation 64 of the 2019 Regulations, exempting business operations involving the North American subsidiaries from the prohibitions in Regulations 11 through 17A. Routine transactions, customer shipments, and employee payments could continue during the divestment process.8GOV.UK. General Licence INT/2022/1710676
On June 26, 2025, OFSI granted a specific licence authorizing the sale of the North American business to entities owned by funds advised by Atlas Holdings LLC. Evraz confirmed that proceeds would be handled in accordance with the licence and sanctions law, meaning the sanctioned parent could not freely access them.9EVRAZ. Grant of OFSI Licence and Disposal of North America Business to Atlas Holdings LLC Atlas completed the acquisition on July 31, 2025, and renamed the business Orion Steel Companies under new CEO Doug Matthews.10Atlas Holdings. Atlas Completes Acquisition of Steelmaker EVRAZ North America, Forms Orion Steel OFSI revoked General Licence INT/2022/1710676 on September 3, 2025, once the subsidiaries were under non-sanctioned ownership.11GOV.UK. General Licence INT/2022/1710676 Revoked The Orion Steel entities now operate free of UK sanctions restrictions.
Getting a Licence to Transact
OFSI uses two licence types to permit activities that would otherwise breach sanctions. Check the general licences first, then apply for a specific one if none fits.
General Licences
These authorize broad categories of activity for multiple parties without individual applications. OFSI publishes them on GOV.UK, and anyone within scope can rely on them. The Evraz North America licence was a textbook example, covering an entire class of counterparties during divestment.12HM Treasury. General Licence INT/2022/1710676 – Continuation of Business of Evraz Plc’s North American Subsidiaries
Specific Licences
Where no general licence covers the activity, an applicant must submit a detailed justification to OFSI explaining why the activity is necessary and how it will not undermine the sanctions regime.13GOV.UK. How to Apply for a Financial Sanctions Licence Common grounds include meeting basic needs, fulfilling prior contractual obligations, winding down business arrangements, and maintaining frozen assets. OFSI evaluates each application on its merits. A licence to maintain frozen property, for instance, requires evidence that the maintenance preserves the asset’s fundamental integrity rather than improving its value.
Reporting Obligations for Anyone Holding Evraz Assets
Anyone who holds or controls funds or economic resources belonging to a designated person has an affirmative obligation to report them to OFSI. This applies to banks, custodians, professional service firms, and any other entity that discovers frozen assets in its accounts or control.14UK Government. Reminder: Frozen Assets Reporting
Reports must include the value of all frozen funds and economic resources held in the UK, plus any overseas assets subject to UK financial sanctions legislation. Where the frozen assets include shares, securities, or other financial instruments, the GBP value must be given. OFSI runs an annual Frozen Asset Review; the 2025 cycle set a November 30 deadline. Institutions that previously held frozen assets but no longer do must still submit a nil return. Failure to report is itself a sanctionable offense.
For third parties further removed from Evraz’s corporate structure, the obligation centers on due diligence. Scrutinize the ownership chains of counterparties to confirm no designated person retains ownership or control. A company that looks unconnected at first glance can still be caught by the control limb if a designated individual holds indirect influence. Screening should cover entity names on sanctions lists, the individuals behind corporate structures, beneficial owners, and any post-designation changes in control.
Penalties for Breaching the Sanctions
Breaching UK financial sanctions is both a criminal offense and a basis for civil monetary penalties. On the criminal side, the Sanctions and Anti-Money Laundering Act 2018 sets a maximum sentence of 10 years on indictment, or up to 12 months on summary conviction in England and Wales.15Legislation.gov.uk. Sanctions and Anti-Money Laundering Act 2018 These penalties apply to individuals who knowingly breach the asset freeze, dealing prohibition, or investment ban, and to those who facilitate prohibited transactions.
OFSI can also impose civil monetary penalties without a criminal prosecution. Under the current framework, these can reach the greater of £1 million or 50% of the estimated value of the breach. Civil penalties operate on a strict liability basis. OFSI does not need to prove intent. Organizations often assume inadvertent dealings will be treated leniently, but the civil regime is designed to punish compliance failures regardless of intent.