Since 23 February 2022, the EU has adopted new sanctions against Russia that expand the sanctions imposed in 2014 or introduce additional restrictions.
Sanctioned Persons
New Asset Freezes
On 23 February 2022, the EU designated various individuals and entities active in the political, military, banking, and media sectors:
- 351 members of the Russia State Duma who voted for the recognition of independence of the so-called Donetsk People’s Republic (DNR) and the Luhansk People’s Republic (LNR).
- Three Russian banks: Rossiya Bank, Promsvyazbank, and Vnesheconombank (VEB) — a new exception is provided to allow for the wind-down of existing relationships with those banks until 24 August 2022.
- 24 individuals and entities, including (a) the decision-makers responsible for threatening Ukraine and entities financially and materially supporting or benefiting from them; (b) those operating in the defence sector; and (c) those who engage in a disinformation war against Ukraine.
On 25 February 2022, the EU designated an additional 98 individuals, including (a) Russia’s President Vladimir Putin; (b) members of the Russia National Security Council who supported Russia’s recognition of independence of the so-called DNR and LNR; (c) individuals who facilitated the Russian military aggression from Belarus; and (d) additional members of the Russia State Duma who voted for the recognition of independence of the so-called DNR and LNR.
On 28 February 2022, the EU designated an additional 26 individuals and one entity, including the closest advisers and supporters of Russia’s President Vladimir Putin.
On 2 March 2022, the EU designated an additional 22 individuals, including various representatives of the Ministry of Defence and military forces of Belarus for participating in the Russian military aggression against Ukraine.
On 9 March 2022, the EU designated an additional 160 individuals, including (a) members of the Russian Federation Council who supported Russia’s recognition of independence of the so-called DNR and LNR; and (b) various individuals (oligarchs) supporting and benefitting from the Russian Government or providing a substantial source of revenue to it, or associated with formerly designated individuals or entities.
On 15 March 2022, the EU designated an additional 15 individuals and nine entities, including (a) various individuals (oligarchs) supporting and benefitting from the Russian Government or providing a substantial source of revenue to it; and (b) certain businesses active in the military and shipbuilding sectors. The EU has also explicitly referenced certain entities associated with these designated individuals and entities to which sanctions extend.
On 8 April 2022, the EU designated:
- 217 individuals, including (a) high-ranking officials of the Russian Government, as well as ministers and council members of the so-called DNR and LNR; (b) oligarchs and other prominent businesspeople involved in key sectors such as energy, finance, media, and defence; and (c) family members of already designated individuals.
- 18 entities, including (a) four major Russian banks (i.e., Otkritie Bank, Novikombank, Sovcombank, and VTB); and (b) companies active in the transportation and defence sectors. There is a wind-down period for activities that are necessary for the termination, by 9 October 2022, of operations, contracts or other agreements, including correspondent banking relations, concluded with those banks before 8 April 2022. Such wind-down exception is available upon application for a specific license before the competent EU Member State authorities.
On 3 June 2022, the EU designated an additional 65 individuals and 18 entities, including (a) individuals reportedly involved in the atrocities committed by the Russian armed forces in Bucha and other Ukrainian towns; and (b) telecom companies, car and aircraft manufacturers, and key suppliers to Russian defence customers. An exception applies to allow EU operators to provide electronic communication services, as well as associated facilities and services necessary for the operation, maintenance, and security of such electronic communication services.
On 21 July 2022, the EU designated an additional 54 individuals and ten entities, including (a) Sberbank, a major Russian bank; (b) senior members of the Russian political or cultural establishment, as well as politicians appointed in Ukrainian territories invaded by Russia; (c) Russia’s high ranking military staff; (d) companies operating in the military sector or the shipbuilding industry or involved in the stealing of Ukrainian grain; and (e) Syrian individuals and an entity for their role in recruiting mercenaries to fight in Ukraine alongside the Russian troops.
On 6 October 2022, the EU designated an additional 30 individuals and seven entities, including (a) defence, aircraft, and weapons manufacturing companies; (b) the Central Election Commission, a body responsible for organising elections and referenda; and (c) additional members of the Russian political or cultural establishment. In addition, the EU is now empowered to impose sanctions on persons who facilitate the infringements of the prohibition against circumvention of sanctions.
The designations entail (a) a freezing of all funds and economic resources belonging to, owned, held, or controlled by the designated individuals or entities; and (b) a prohibition to make funds or economic resources available, directly or indirectly, to or for the benefit of the designated individuals or entities. These prohibitions extend to dealings with persons that are owned or controlled by designated individuals or entities.
Competent authorities of EU Member States may, however, authorise the release of funds or economic resources necessary for the sale and transfer by 31 December 2022, or within six months from the date of listing, whichever is latest, of proprietary rights directly or indirectly owned by a listed individual or entity in a legal person, entity or body established in the EU. The competent authorities may also authorise the release of certain frozen economic resources (but not funds) belonging to any listed persons or entities, where it is necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, provided that any proceeds resulting from such release are frozen. Finally, the competent authorities of EU Member States may also authorise the release of frozen funds or economic resources belonging to:
- Sberbank, where such resources are necessary for (a) the termination by 22 August 2023, of operations, contracts, or other agreements, including correspondent banking relations, concluded with Sberbank before 21 July 2022; or (b) the completion, by 31 October 2022, of an ongoing sale and transfer of proprietary rights directly or indirectly owned by Sberbank in a legal person, entity or body established in the EU;
- Bank Rossiya, Promsvyazbank, VEB.RF, Otkritie FC Bank, Novikombank, Sovcombank, VTB Bank, and Sberbank, where such resources are necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers;
- PJSC Kamaz, where such resources are necessary to wind down joint ventures or similar legal arrangements concluded before 16 March 2022; and
- National Settlement Depository, where such resources are necessary to terminate any operations, contracts, or other arrangements concluded before 3 June 2022.
Reporting requirements for listed persons and entities, and EU operators
On 21 July 2022, the EU introduced enhanced reporting requirements, both for listed persons and entities, and EU operators. The listed persons and entities are obliged to report, before 1 September 2022 or within six weeks from the date of listing, whichever is latest, funds or economic resources held by them within the EU. Furthermore, natural and legal persons, entities, and bodies (i.e., EU operators) shall supply to the competent authorities (and transmit to the European Commission, directly or through a Member State) any information which would facilitate compliance with the asset-freezing measures, such as information about funds and economic resources within the EU belonging to, owned, held or controlled by designated persons and entities and which have not been treated as frozen by the persons or entities obliged to do so.
Prohibition of dealings with certain Russian state-owned entities
On 15 March 2022, the EU introduced a new type of prohibition to, directly or indirectly, engage in any transaction with certain state-owned entities and entities that are owned by such persons or that act on their behalf or at their direction. The targeted Russian state-owned entities currently include: OPK Oboronprom, United Aircraft Corporation, Uralvagonzavod, Rosneft, Transneft, Gazprom Neft, Almaz-Antey, Kamaz, Rostec, JSC Po Sevmash, Sovcomflot, and United Shipbuilding Corporation. On 6 October 2022, the Russian Maritime Register of Shipping was added to this list.
This prohibition does not apply to the reception of payments due by such state-owned entities pursuant to contracts performed before 15 May 2022; as well as to transactions (a) to be executed until 15 May 2022 pursuant to contracts entered into before 16 March 2022; (b) necessary for the direct or indirect import or transport of natural gas, certain metals and ores into the EU, the European Economic Area, Switzerland, or the Western Balkans; (c) unless prohibited by applicable crude oil or petroleum products prohibitions, necessary for the direct or indirect purchase, import or transport of oil, including refined petroleum products, from or through Russia into non-EU countries; (d) related to energy projects outside Russia where the targeted Russian state-owned entities are minority shareholders; or (e) related to the purchase, import or transport into the EU of coal and other solid fossil fuels until 10 August 2022.
On 3 June 2022, the EU clarified that this prohibition does not apply to (a) the reception of payments due by these targeted Russian state-owned entities under contracts performed before 15 May 2022; (b) transactions, including sales, strictly necessary for the wind-down by 5 September 2022 of a joint venture or similar legal arrangement concluded before 16 March 2022; and (c) transactions related to the provision of electronic communication services, data centre services, services and equipment necessary for their operation, maintenance, security, and call centre services. On 21 July 2022, the EU extended the wind-down period referred to in point (b) until 31 December 2022 and further clarified that the prohibition does not apply to (d) transactions which are necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers whose import, purchase and transport is allowed under the applicable rules; and (e) transactions which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in the EU, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in the EU and if such transactions are consistent with the objectives of the regulations imposing Russia-related sanctions.
On 6 October 2022, the EU further prohibited EU nationals from holding posts in the governing bodies of the listed State-owned enterprises included in the transaction ban.
Trade Ban on the Donetsk and Luhansk Regions
On 23 February 2022, the EU adopted a trade ban against the non-government-controlled areas of Donetsk and Luhansk oblasts of Ukraine, similar to the ban in place for Crimea since 2014:
- Import ban on all products originating from those areas
- Export ban on specifically listed products (e.g., products relating to transport, telecommunications, energy, and oil & gas) to those areas
- Prohibition to provide certain services (i.e., financing, financial assistance, insurance, and insurance-related services) in relation to those products
- Prohibition of new investments (e.g., real estate, joint venture, etc.) in those areas, and prohibition of provision of certain financial services (financing, loan, credit, and investment services) in relation to those investments
- Prohibition to provide services relating to tourism activities in those areas
The geographical area concerned by the trade ban was extended on 6 October 2022 to include the non-controlled areas of the Zaporizhzhia and Kherson oblasts of Ukraine.
Trade Restrictions on Imports and Exports
Russia-related export controls
On 25 February 2022, the EU adopted additional sectoral sanctions affecting a wide range of trade dealings with Russia and Russian persons:
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia dual-use goods and technology listed on Annex I of EU Dual-Use Regulation 2021/821; and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services.
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia certain goods and technology that might contribute to Russia’s technological enhancement of its defence and security sector (e.g., microprocessors, storage integrated circuits, electronic beam systems, digital computers, telecom and radio equipment, information security software and equipment, semiconductor lasers, diesel engines, and tractors); and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services; the list of restricted goods and technology was further expanded on 8 April and 3 June 2022.
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia certain goods and technologies for use in the aviation and space industry; and (b) provide related services, including, but not limited to, technical assistance, financial assistance, brokering services, insurance and reinsurance, as well as certain services (e.g., overhauling, inspection, replacement, modification, and defect rectification) for aircraft and components thereof; the list of restricted goods and technologies was further expanded on 8 April 2022.
- Prohibition to provide public financing or financial assistance for trade with, or investment in, Russia.
The EU provided various exceptions to allow certain categories of trade:
- Humanitarian purposes, health emergencies, medical and pharmaceutical purposes, temporary export for use by news media, software updates, consumer communication devices, cybersecurity and information security purposes for non-governmental bodies, EU-Russia cooperation in civilian matters, intergovernmental cooperation in space programmes, civil nuclear operations and cooperation, maritime safety, civilian telecommunication networks (including the provision of internet services), exclusive use for Russian entities owned or controlled by EU or partner country parents, and diplomatic use; and
- For obligations concluded before 26 February 2022 (exemption must be requested before 1 May 2022).
EU Member States will not grant any exemptions for Russian military end-users, military end-use in Russia, and aviation or space industry use. The EU provided a list of 64 Russian military end-users, comprising almost all Russian defence, military aviation, aerospace, shipbuilding companies, governmental research institutes, and intelligence services. The list of military end-users was further expanded on 15 March, 3 June, and 21 July 2022.
On 9 March 2022, the EU introduced additional sectoral sanctions targeting the maritime sector, including a prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia, maritime navigation goods and technology (including navigation and radio-communication equipment); and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services. Certain exceptions apply to allow certain categories of trade, including humanitarian purposes, health emergencies, the prevention or mitigation of health or environment disasters, or maritime safety.
On 15 March 2022, the EU introduced further trade restrictions, including:
- Prohibition to, directly or indirectly, import, purchase, transport, or provide services relating to, certain iron and steel products originating in or exported from Russia into the EU; the list of restricted iron and steel products was further expanded on 8 April 2022.
- Prohibition to, directly or indirectly, sell, supply, transfer, or export certain luxury goods to or for use in Russia (e.g., caviar, truffles, wines, carpets, cutlery, watches, jewelry, certain electronic items for domestic use). On 21 July 2022, the EU clarified that the prohibition does not apply with respect to certain jewelry and goldsmiths’ or silversmiths’ wares for personal use of natural persons travelling from the European Union or members of their immediate families travelling with them, owned by those individuals and not intended for sale.
Certain exceptions apply to allow certain categories of trade, including transactions that are (a) necessary to import and transport fossil fuels into the EU; and (b) necessary to prevent or mitigate health or environmental disasters, or maritime safety. Wind-down periods are provided to allow for the execution of certain contracts concluded before 16 March 2022.
On 8 April 2022, the EU introduced further trade restrictions, including:
- Prohibition to, directly or indirectly, (a) purchase, import, or transfer into the EU certain goods originating or exported from Russia (e.g., seafood, caviar, cement, fertilisers, glass); and (b) provide related services, including but not limited to, technical assistance, financial assistance, and brokering services; the list of restricted goods was further expanded on 3 June 2022.
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia certain goods and technology that might contribute to Russia’s industrial enhancement (e.g., tubes, pipes, rubber, tyres, pulps); and (b) provide related services, including but not limited to, technical assistance, financial assistance, and brokering services.
- Prohibition for any road transport undertaking established in Russia to transport, including in transit, goods by road within the EU.
- Prohibition to provide access to EU ports after 16 April 2022 to any vessel registered under the flag of Russia (including vessels that have changed their Russian flag or their registration to the flag or register of any other country after 24 February 2022). On 21 July 2022, the EU extended this prohibition, effective as of 29 July 2022, to cover access to EU locks, except for the purpose of leaving the EU. After 8 April 2023, vessels certified by the Russian Maritime Register of Shipping will be also prohibited from accessing EU ports and locks.
Certain exceptions apply to the prohibitions on road transport and vessels to allow certain categories of transport, including for humanitarian purposes or for purchase, import, or transport into the EU of, among others, natural gas and oil, nuclear fuel, medical and pharmaceutical products, and agricultural and food products. In addition, contracts concluded before 9 April 2022 in relation to trade in coal and other fossil fuels, or goods and technology that might contribute to Russia’s industrial enhancement, as well as ancillary contracts necessary for their execution, may be executed until 10 July 2022. Certain exceptions apply to the prohibitions on road transport and vessels to allow certain categories of transport, including for humanitarian purposes or for purchase, import, or transport into the EU of, among others, natural gas and oil, nuclear fuel, medical and pharmaceutical products, and agricultural and food products. In addition, contracts concluded before 9 April 2022 in relation to trade in coal and other fossil fuels, or goods and technology that might contribute to Russia’s industrial enhancement, as well as ancillary contracts necessary for their execution, may be executed until 10 July 2022. On 21 July 2022, the EU added an additional derogation, allowing competent authorities of Member States to authorise vessels having changed their Russian flag or registration after 16 April 2022 to access the EU ports or locks, if the Russian flag or registration was required by contract and such access is necessary for the unloading of non-prohibited goods to complete renewable energy projects in the EU. On 6 October 2022, the EU further allowed competent of Member States to grant vessels access to EU ports or locks if the vessel (i) has a Russian bareboat charter registration that was initially effected prior to 24 February 2022; (ii) resumed its right to fly the flag of an EU Member Sate before 31 January 2023; and (iii) is not owned or controlled by a Russian natural or legal person. On 6 October 2022, the EU has also withdrawn the recognition of the Russian Maritime Register of Shipping.
On 21 July 2022, the EU introduced additional trade restrictions and amended some of the existing measures, including:
- Prohibition to purchase, import, or transfer, directly or indirectly, gold (including gold plated with platinum, unwrought or in semi-manufactured forms, or in powder form; waste and scrap of gold, including metal clad with gold but excluding sweepings containing other precious metals; and gold coins) (Gold Products) if it originates in Russia and it has been exported from Russia into the EU or to any third country after 22 July 2022. The prohibition also applies to Gold Products processed in a third country incorporating Gold Products subject to the prohibition.
- Prohibition to purchase, import, or transfer, directly or indirectly, articles of jewellery and parts thereof of gold or containing gold, or of metal clad with gold, and articles of goldsmiths’ or silversmiths’ wares and parts thereof of gold, containing gold, or of metal clad with gold (Jewellery Products), if they originate in Russia and have been exported from Russia into the EU after 22 July 2022.
- Prohibition to provide technical assistance, brokering services or other services, as well as financial assistance or financial services related to Gold Products and Jewellery Products.
- The above prohibitions do not apply to Gold Products and Jewellery Products necessary for the official purposes of diplomatic missions, consular posts or international organisations in Russia enjoying immunities in accordance with international law, as well as Jewellery Products for personal use of natural persons and their family members travelling to the EU, if such items are owned by those individuals and are not intended for sale. The competent authorities of EU Members may authorise transfer or import of cultural goods on loan in the context of formal cultural cooperation with Russia.
- The list of goods and technology that might contribute to Russia’s technological enhancement of its defence and security sector has been considerably expanded to include, inter alia, certain oil-related products, steel and machine tools, chemicals, explosives, and law enforcement products. It is now also necessary to obtain a prior authorisation to sell, supply, transfer or export, directly or indirectly, dual-use items or goods and technology that might contribute to Russia’s technological enhancement of its defence and security sector intended for ensuring cybersecurity and information security to any individual or entity in Russia, or for use in Russia. Previously, such items were exempted from the applicable prohibition.
The list of goods contributing to the enhancement of Russian industrial capacities has been modified, with certain CN codes being amended, refined, or deleted. In addition, an authorisation may now be granted to sell, supply, transfer or export, directly or indirectly, such goods necessary for (a) medical or pharmaceutical purposes, or for humanitarian purposes, such as delivering or facilitating the delivery of assistance, including medical supplies, food, or the transfer of humanitarian workers and related assistance or for evacuations (except for military end-uses), and (b) the exclusive use and under the full control of the authorising Member State and in order to fulfil its maintenance obligations in areas which are under a long-term lease agreement between that Member State and Russia.
On 6 October 2022, the EU introduced a number of new import and export restrictions, including:
- A prohibition to import into the EU a wide range of goods originating in or exported from Russia, including (a) finished and semi-finished steel products; (b) machinery; (c) appliances; (d) plastics; (e) cosmetics; (f) vehicles; (g) textiles, footwear; (h) leather; (i) ceramics; (j) certain chemical products; (k) wood pulp and paper; (l) cigarettes; (m) plastics; (n) and non-gold jewellery. The provision of financing and insurance services related to the import of these goods is prohibited. These restrictions are subject to available exceptions and derogations. Notably, the import of steel products which became subject to restrictions on 6 October 2022 is still permitted for execution, by 8 January 2023, of contracts concluded before 7 October 2022. In addition, the prohibitions shall not apply to operations involving the import of certain semi-finished products of iron or non-alloy steel under a fixed import volume quota for a specified period.
- A prohibition to export certain goods to Russia to reduce the latter’s ability to develop its defence and security sector. The list includes (a) coking coal; (b) specific electronic components; (c) technical items in the aviation sector; (d) and certain chemicals. The provision of financing and insurance services related to the export of these goods is prohibited. These restrictions are subject to available exceptions and derogations. Exports are permitted for execution, until 6 November 2022, of contracts concluded before 7 October 2022, or of ancillary contracts necessary for the execution of such contracts. Member States may authorise the export of certain goods and ancillary services necessary for the production of titanium goods required in the aeronautic industry, for which no alternative supply is available.
- A prohibition to sell, supply, transfer or export certain firearms, their parts and essential components, and ammunition to any person or entity in Russia or for use therein. The provision of financing and ancillary services is also prohibited.
Sectoral Sanctions and Sovereign Debt Restrictions
Financial restrictions
On 23 February 2022, the EU extended existing financial restrictions against certain major Russian banks to additional Russian government parties, effectively impairing the ability of Russia to access EU capital and financial markets:
- Prohibition on dealings with transferable securities and money-market instruments issued after 9 March 2022 (regardless of their maturity date) by Russia, its government, the Central Bank of Russia, and entities acting on behalf, or at the direction, of the Central Bank of Russia (all referred to as Covered Parties 1)
- Prohibition to provide investment services in relation to those transferable securities and money-market instruments issued after 9 March 2022 (regardless of their maturity date) by Covered Parties 1
- Prohibition to extend new loans and credit (regardless of their maturity date) to Covered Parties 1 after 23 February 2022
Covered Parties 1 currently include: Russia and its government, the Central Bank of Russia, and any legal person, entity, or body acting on behalf or at the direction of the Central Bank of Russia.
On 25 February 2022, the EU adopted additional sectoral sanctions affecting a wide range of financial dealings with Russia and Russian persons:
- Prohibition on dealings with transferable securities and money-market instruments issued after 12 April 2022 (regardless of their maturity date) by (a) certain major credit institutions or other government-controlled institutions; (b) Russian operators that are government-controlled and where Russia, its government, or the Russian Central Bank have the right to participate in profits or hold substantial economic relationships; (c) Russian operators engaged in military equipment, services, or crude oil or petroleum; and (d) operators owned 50% or more, directly or indirectly, by, or acting on behalf of, or at the direction of, any of the foregoing parties (all referred to as Covered Parties 2).
- Prohibition to provide investment services in relation to those transferable securities and money-market instruments issued after 12 April 2022 (regardless of their maturity date) by Covered Parties 2.
- Prohibition to extend new loans and credit (regardless of their maturity date) to Covered Parties 2 after 26 February 2022.
- Prohibition to list and provide services as of 12 April 2022 on trading venues registered or recognised in the EU for the transferable securities of operators established in Russia that have over 50% public ownership.
- Prohibition to accept deposits exceeding EUR €100,000 in the aggregate per credit institution from Russian nationals, residents, or operators established in Russia.
- Mandatory reporting by 27 May 2022 by EU credit institutions to EU competent authorities of deposits exceeding EUR €100,000 held by Russian nationals, residents, or operators established in Russia, and subsequent reporting every year.
- Mandatory reporting by 27 May 2022 by EU credit institutions to EU competent authorities of deposits exceeding EUR €100,000 held by Russian nationals residing in Russia who have acquired the citizenship of a Member State or residence rights in an EU Member State through investor citizenship or residence schemes (golden passports).
- Prohibition on EU central securities depositories to provide services for transferable securities issued after 12 April 2022 (regardless of their maturity) to Russian nationals, residents, or operators established in Russia. On 21 July 2022, the EU clarified that the prohibition does not apply to citizens and residents of the European Economic Area and Switzerland, in addition to the EU citizens and residents
- Prohibition to sell euro-denominated transferable securities issued after 12 April 2022 (regardless of their maturity) or units in collective investment undertakings providing exposure to such securities to Russian nationals, residents, or operators established in Russia.
Covered Parties 2 currently include: Sberbank; VTB Bank; Gazprombank; VEB; Rosselkhozbank; Alfa-Bank; Bank Otkritie; Rossiya Bank; Promsvyazbank; OPK Oboronprom; United Aircraft Corporation; UralVagonZavod; Rosneft; Transneft; Gazprom Neft; Almaz-Antey; Kamaz; Novorossiysk Commercial Sea Port; Rostec (Russian Technologies State Corporation); Russian Railways; JSC PO Sevmash; Sovcomflot; and United Shipbuilding Corporation.
On 28 February 2022, the EU imposed a prohibition on transactions related to the management of reserves or assets of Central Bank of Russia, including transactions with persons acting on its behalf, or at its direction, such as the Russian National Wealth Fund. EU competent authorities may authorise transactions “strictly necessary to ensure the financial stability” of the EU or the EU Member State concerned.
On 2 March 2022, the EU introduced further restrictions, including:
- Prohibition, as of 12 March 2022, to provide specialised financial messaging services used to exchange financial data (i.e., SWIFT) to certain Russian banks and entities established in Russia owned 50% or more, directly or indirectly, by such banks. The list of excluded banks includes: Bank Otkritie; Novikombank; Promsvyazbank; Bank Rossiya; Sovcombank; VNESHECONOMBANK (VEB); and VTB Bank. On 3 June 2022, the list was expanded to cover, as of 14 June 2022: Sberbank; Credit Bank of Moscow; Joint Stock Company Russian Agricultural Bank; and JSC Rosselkhozbank.
- Prohibition to sell, supply, transfer, or export euro-denominated banknotes (i) to Russia; (ii) to any person in Russia, including the Russian Government and the Central Bank of Russia; or (iii) for use in Russia.
- Prohibition to invest, participate, or otherwise contribute to projects co-financed by the Russian Direct Investment Fund.
On 15 March 2022, the EU introduced further financial restrictions, including:
- Prohibition to acquire any new or to extend any existing participation in, create any new joint venture with, grant or be part of any arrangement to grant any new loan or credit or otherwise provide financing to, or provide investment services in connection thereto, any operators in the energy sector in Russia, except if (a) concerning an operator that is owned by an EU business; or (b) necessary for ensuring critical energy supply in the EU or the transport of fossil fuels to the EU.
- Prohibition, as of 15 April 2022, to provide credit-rating services, as well as to provide access to subscription services in relation to credit-rating activities, to Russian nationals, residents, or operators established in Russia.
On 8 April 2022, the EU introduced further restrictions, including:
- Prohibition to award or continue the execution of certain public or concession contracts to or with (i) Russian nationals or operators established in Russia; (ii) operators directly or indirectly owned for more than 50% by persons under (i); or (iii) operators acting on behalf or at the direction of persons under (i) or (ii).
- Prohibition to provide, directly or indirectly, support, including financing and financial assistance or any other benefit, under certain EU, Euratom or Member State programmes or contracts to operators established in Russia with over 50% public ownership or public control.
Certain exceptions apply to allow public or concession contracts or support under EU, Euratom or Member State programmes or contracts relating to, among others, radioactive waste management, fuel supply, civil nuclear facilities, environmental radiation monitoring, or intergovernmental cooperation in space programmes.
The EU further prohibited to (a) register; (b) provide a registered office, business, or administrative address to; (c) provide management services to; or (d) act or arrange for others to act as trustee, nominee shareholder, director, secretary, or a similar position for a trust or any similar legal arrangement having as a trustor or a beneficiary (i) Russian nationals, residents, or operators established in Russia; (ii) operators owned 50% or more, directly or indirectly, by persons under (i); (iii) operators controlled by persons under (i) or (ii); or (iv) operators acting on behalf or at the direction of persons under (i) to (iii). On 3 June 2022, the EU clarified that the restriction in point (d) will apply as of 5 July, and that operations necessary to terminate contracts concluded before 9 April 2022 will be allowed until 5 July 2022 (with the possibility for parties to seek an authorisation to continue such operations until 5 September 2022). These prohibitions do not apply when the trustor or beneficiary is a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area, or in Switzerland.
The EU also expanded some of the existing restrictions introduced since 25 February 2022 (see above), including by extending the prohibitions on deposits and euro-denominated transferable securities to (a) provide crypto-asset wallet, account, or custody services to Russian nationals, residents, or operators established in Russia regardless of the assets’ total value (before 6 October 2022, the prohibition applied only to assets exceeding EUR 10,000); (b) sell transferable securities denominated in any official currency of a Member State issued after 12 April 2022 or units in collective investment undertakings providing exposure to such securities; and (c) sell, supply, transfer, or export banknotes denominated in any official currency of a Member State.
On 3 June 2022, the EU prohibited to, directly or indirectly, provide accounting, auditing, bookkeeping, tax consulting services, business and management consulting, or public relations services to the Russian Government or persons established in Russia. On 6 October 2022, the EU further prohibited the direct or indirect provision of:
- IT consultancy (covering consultancy services related to the installation of computer hardware, including assistance services to the clients in the installation of computer hardware (i.e., physical equipment) and computer networks, and software implementation services, including all services involving consultancy services on, development of and implementation of software);
- legal advisory (covering the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law; participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties; and preparation, execution and verification of legal documents; and excluding any representation, advice, preparation of documents or verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings); and
- architecture and engineering services (covering both architectural and engineering services as well as integrated engineering services, urban planning and landscape architectural services and engineering-related scientific and technical consulting services)
- to the government of Russia or legal persons established in Russia. The prohibition does not apply to the provision of covered services (a) intended for the exclusive use of persons established in Russia that are owned, or solely or jointly controlled, by an entity or other legal person incorporated or constituted in the European Union, European Economic Area, Switzerland, the United States, Japan, the United Kingdom, and South Korea; (b) necessary for the termination by 8 January 2023 of contracts concluded before 7 October 2022 for IT, consultancy, legal advisory, architecture, and engineering services (a similar exception was put in place to wind-down services prohibited by the 3 June 2022 package, the period of which ended on 5 July 2022), or of ancillary contracts necessary for the execution of such contracts; (c) necessary for the exercise of the right of defence in judicial proceedings or the right to an effective legal remedy; or (d) necessary for the addressing of public health emergencies. The prohibition also does not apply to software updates for non-military use/end users, which are permitted by other relevant provisions of the sanctions regulations. In addition, competent authorities of EU Member States could authorise the otherwise-prohibited provision of services with respect to (a) ensuring critical energy supply; (b) ensuring the continuous operation of critical health and safety infrastructures, software, and hardware; (c) operations in connection with the nuclear civil capabilities; and (d) the provision of certain electronic communication services.
On 21 July 2022, the EU introduced additional financial restrictions and authorisation requirements, including:
- Prohibition to accept deposits exceeding EUR 100,000 from legal persons established outside the EU which are directly or indirectly owned 50% or more by Russian nationals or natural persons residing in Russia.
- An authorisation is now required for accepting deposits necessary for non-prohibited cross-border trade in goods and services between the EU and Russia. Previously, such deposits were exempted from the prohibitions.
Aviation restrictions
On 28 February 2022, the EU imposed a prohibition on aircrafts operated by Russian air carriers, Russian-registered aircrafts, and non-Russian-registered aircrafts that are owned, chartered, or controlled by a Russian person, to land in, take off from, or overfly the territory of the EU, except in case of emergency landing or overflight. A network manager is appointed to coordinate and ensure effective implementation of this prohibition across the EU.
Broadcasting restrictions
On 2 March 2022, the EU introduced a prohibition to broadcast, or to enable, facilitate or otherwise contribute to broadcast, any content by certain Russian media companies, including through transmission or distribution by any means, such as cable, satellite, IP-TV, internet service providers, or internet video-sharing platforms or applications, whether new or pre-installed. The EU further suspended all broadcasting licences, authorisations, transmission, and distribution arrangements with such Russian media companies.
On 3 June 2022, the EU additionally prohibited to advertise products or services in any content produced or broadcast by these restricted Russian media companies.
The list of affected Russian media companies, as last expanded on 3 June 2022, includes: RT- Russia Today English; RT- Russia Today UK; RT - Russia Today Germany; RT - Russia Today France; RT- Russia Today Spanish; Sputnik; Rossiya RTR/RTR Planeta; Rossiya 24/Russia 24; and TV Centre International.
Oil and energy restrictions
On 25 February and 15 March 2022, the EU prohibited to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Russia certain goods and technologies for use in, respectively, oil refining or the energy sector; and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services. The list of restricted goods and technologies for use in oil refining was further expanded on 8 April 2022, and further amended on 21 July 2022.
On 8 April 2022, the EU prohibited to, directly or indirectly, (a) purchase, import, or transfer into the EU coal and other fossil fuels originating in or exported from Russia; and (b) provide related services, including but not limited to, technical assistance, financial assistance, and brokering services.
On 3 June 2022, the EU expanded the import ban to certain crude oil and petroleum products originating in or exported from Russia, primarily targeting seaborne crude oil and petroleum. Specifically, it is prohibited to, directly or indirectly:
- Purchase, import, or transfer into the EU crude oil and petroleum products originating in or exported from Russia, and provide related services, including but not limited to, technical assistance, financial assistance, and brokering services.
- Provide technical assistance, brokering services, financing, or financial assistance, related to the transport, including through ship-to-ship transfers, to third countries of crude oil or petroleum products originating in or exported from Russia.
Various exceptions may apply to allow, among others:
- The execution of contracts and the payment of insurance claims for contracts concluded before 4 June 2022 which runs until (a) 5 December 2022 for crude oil obtained from bituminous minerals (falling under CN 2709 00), and (b) until 5 February 2023 for non-crude oil obtained from bituminous minerals (falling under CN 2710). The same deadlines apply to the payment of insurance claims on the basis of insurance contracts concluded before 4 June 2022 and provided that the insurance coverage has ceased by the relevant date. Ancillary contracts necessary for the execution of the sales contracts are permitted during these periods.
- Transactions relating to products that originate in a third country, are owned by a non-Russian company, and are only being loaded in, departing from, or transiting through Russia as well as ancillary services in relation to such transport.
- The provision of pilot services necessary for reasons of maritime safety.
Additional exceptions may apply as regards certain EU Member States. Crude oil delivered by pipeline from Russia into the EU is generally excluded from this prohibition.
Oil price cap
In light of the G7 announcement, on 6 October 2022, the EU has introduced a legal basis for introducing a price cap on Russian crude oil and petroleum products. The mechanism of the price cap rests upon a prohibition (a) to transport, including through ship-to-ship transfers, to third countries crude oil (as of 5 December 2022) and other petroleum products (as of 5 February 2023) obtained from bituminous minerals; and (b) to provide technical assistance, brokering services or financing or financial assistance, related to the maritime transport to third countries of crude oil or petroleum products. The exact price levels and the date of entry into force of the price cap has, at the date of publishing, not yet been formalised.
Once the price cap is set, the above-mentioned transportation services prohibition will not apply for a period of 90 days, to the transport of certain crude oil and petroleum products, provided that (a) the transport is based on a contract concluded before the date of the price cap enters into force; and (b) the purchase price per barrel did not exceed the price cap on the date of conclusion of that contract. Further, the prohibitions will not apply with respect to specific projects (currently only with respect to crude oil originating in the Sakhalin-2 Project destined to Japan, and for the limited period between 5 December 2022 and 5 June 2023). Finally, these prohibitions will not apply, as of 5 December 2022, with respect to crude oil falling under CN code 2709 00, and as of 5 February 2023, with respect to petroleum products falling under CN code 2710, originating in or exported from Russia, provided that the purchase price per barrel of such products does not exceed the established price cap.
Finally, if a vessel under the flag of a third country transports Russian crude oil or petroleum products purchased at a price above the price cap, it will be prohibited to provide technical assistance, brokering services, financing or financial assistance, including insurance, related to any transport in the future by that vessel of crude oil or petroleum products.
Sanctions Against Belarus
On 2 March 2022, the EU adopted new sanctions against Belarus in response to Belarus’ involvement in the Russian aggression against Ukraine. These sanctions entail broad trade restrictions:
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Belarus dual-use goods and technology listed on Annex I of EU Dual-Use Regulation 2021/821; and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services.
- Prohibition to, directly or indirectly, (a) sell, supply, transfer, or export to or for use in Belarus certain goods and technology that might contribute to Belarus’ technological enhancement of its defence and security sector (e.g., microprocessors, storage integrated circuits, electronic beam systems, digital computers, telecom and radio equipment, information security software and equipment, semiconductor lasers, diesel engines, and tractors), as well as certain machinery (e.g., turbines, engines, pumps, and centrifuges); and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services.
- Prohibition to, directly or indirectly, (a) import certain wood, cement, iron and steel, and rubber products originating in or exported from Belarus; and (b) provide related services, including, but not limited to, technical assistance, financial assistance, and brokering services.
The EU provided various exceptions to allow certain categories of exports: humanitarian purposes, health emergencies, medical and pharmaceutical purposes, temporary export for use by news media, software updates, consumer communication devices, cybersecurity and information security purposes for non-governmental bodies, EU-Belarus cooperation in civilian matters, intergovernmental cooperation in space programmes, civil nuclear operations and cooperation, maritime safety, civilian telecommunication networks (including the provision of internet services), exclusive use for Belarusian entities owned or controlled by EU or partner country parents, and diplomatic use.
Contracts concluded before the imposition of these sanctions can be performed subject to certain conditions: (a) contracts for the sale and export of restricted goods and technology can be performed if concluded before 3 March 2022 and exemption is requested before 1 May 2022; and (b) contracts for the import of restricted goods can be performed until 4 June 2022 if concluded before 2 March 2022.
EU Member States will not grant any exemptions for goods and technology intended for the Belarus Ministry of Defence and, as of 3 June 2022, 24 other restricted military end-users.
On 9 March 2022, the EU adopted additional sectoral sanctions affecting a wide range of financial dealings with Belarus and Belarusian persons:
- Prohibition, as of 20 March 2022, to provide specialised financial messaging services used to exchange financial data (i.e., SWIFT) to certain Belarusian banks and entities owned 50% or more, directly or indirectly, by such banks. The list of excluded banks included: Belagroprombank; Bank Dabrabyt; and Development Bank of the Republic of Belarus. On 3 June 2022, the list was expanded to cover, as of 14 June 2022, Belinvestbank (Belarusian Bank for Development and Reconstruction).
- Prohibition on transactions related to the management of reserves or assets of the Central Bank of Belarus, including transactions with persons acting on its behalf, or at its direction. EU competent authorities may authorise transactions “strictly necessary to ensure the financial stability” of the EU or the EU Member State concerned.
- Prohibition to list and provide services as of 12 April 2022 on trading venues registered or recognised in the EU for the transferable securities of operators established in Belarus that have over 50% public ownership.
- Prohibition to provide public financing or financial assistance for trade with, or investment in, Belarus.
- Prohibition to accept deposits exceeding EUR €100,000 in the aggregate per credit institution from Belarusian nationals or residents or operators established in Belarus.
- Mandatory reporting by 27 May 2022 by EU credit institutions to EU competent authorities of deposits exceeding EUR €100,000 held by Belarusian nationals, residents, or operators established in Belarus, and subsequent reporting every year.
- Mandatory reporting by 27 May 2022 by EU credit institutions to EU competent authorities of deposits exceeding EUR €100,000 held by Belarusian nationals residing in Belarus who have acquired the citizenship of a Member State or residence rights in an EU Member State through investor citizenship or residence schemes (golden passports).
- Prohibition on EU central securities depositories to provide services for transferable securities issued after 12 April 2022 (regardless their maturity) to Belarusian nationals or residents or operators established in Belarus.
- Prohibition to sell euro-denominated transferable securities issued after 12 April 2022 (regardless their maturity) or units in collective investment undertakings providing exposure to such securities to Belarusian nationals or residents or operators established in Belarus.
- Prohibition to sell, supply, transfer, or export euro-denominated banknotes (i) to Belarus; (ii) to any person in Belarus, including the Belarusian Government and the Central Bank of Belarus; or (iii) for use in Belarus.
On 8 April 2022, the EU further prohibited any road transport undertaking established in Belarus to transport, including in transit, goods by road within the EU. Certain exceptions apply to allow certain categories of transport, including for humanitarian purposes or for purchase, import, or transport into the EU of, among others, natural gas and oil, medical and pharmaceutical products, and agricultural and food products.