A subsidiary of a Russian railway company named on an EU and US sanctions list is registered in Malta and is subject to recently imposed international financial restrictions. 

The railway company, Russia Railways, is not fully targeted by the sanctions, issued by western allies in recent weeks as a reaction to the Russian invasion of Ukraine. 

However its financial movements are limited, meaning, for example, that it has limited access to financial markets and can no longer trade in its shares from April 12, a government source explained.

Its subsidiary, Black Sea Ferries, has been registered in Ta' Xbiex in Malta since 2009.

The ferries company has two other subsidiaries in Malta, Black Sea Ferries Operator and Black Sea Ferries Shipping.

What does it mean for Malta-based company?

Sources explained that the same measures that apply to Russia Railways, will apply to the Malta-based ferries company. However, the ultimate owner of the ferries company is not sanctioned.

On Tuesday, MaltaToday reported that the ferry company is based in Malta.  

Meanwhile, Times of Malta is informed that no major red flags have been raised about any Russians or Russian companies subject to new international sanctions.  

The EU and western allies have in recent weeks issued a series of sanctions aimed at top oligarchs as a reaction to the Russian invasion of Ukraine.  

Ukraine forces prepare to defend an airbase.

Government sources said that these have had little impact on Russians with ties to the island as a result of the sanctions. 

It is understood that less than a dozen hits had been flagged when authorities were called on to run searches through their databases for any local holdings of sanctioned Russian nationals last week.  

Russians are involved in around 1,000 companies and other financial structures in Malta.  

Corporate service providers, banks, and other regulated entities were last week issued with an extensive guidance note by the authorities on how to ensure they are abiding by the sanctions.  

How many sanctions-linked companies are in Malta?

Sources said that the only information passed over to the authorities so far was connected to dormant shelf companies and some other minor holdings which were linked to sanctioned Russians or their companies.  

This information has been passed over to international partners as part of an information-sharing exercise.  

The guidance note, from the Sanctions Monitoring Board and the Financial Intelligence Analysis Unit, says every individual and entity operating in Malta has the obligation to ensure that sanctions are fully adhered to.

The rules stem from a seldom referred to piece of legislation known as the National Interest Act, which envisages hefty penalties for violations of sanctions. Upon conviction, a person is liable to imprisonment from a minimum of 12 months to a maximum of 12 years and/or a fine of not less than €25,000 and not exceeding €5 million. 

In the case of legal entities, the fine climbs up to a maximum of €10 million for sanction busting.  

What do the sanctions say?

The initial sanctions package included targeted restrictive measures to cover all the 351 members of the Russian State Duma, the lower house of the Federal Assembly of Russia.

It also included another 27 high-profile individuals and entities, who authorities say have played a role in undermining Ukraine. 

Restrictions were also introduced on imports on goods from the areas of Donetsk and Luhansk oblasts.  

Restrictions on trade and investments related to certain economic sectors, a prohibition to supply tourism services, and an export ban for certain goods and technologies, have also been imposed. 

The EU also prohibited financing for the Russian Federation, its government and Central Bank. 

Last month, the EU adopted economic measures covering Belarus. 

The EU has also implemented economic sanctions in the financial, energy, transport and technology sectors as well as visa policy. 

On February 28 another 26 persons and one entity were added to the sanctions list. These include oligarchs and businesspeople active in the oil, banking, and finance sectors as well as government members, and high-level military officials. 

Alleged propagandists who contributed to the spread of anti-Ukrainian material while promoting the invasion of Ukraine were later also sanctioned. 

The EU then sanctioned Russian President Vladimir Putin and other top government members, suspended a freedom of movement agreement with Russia.

A ban on Russian broadcast media soon followed, along with a ban on Russian aircraft.