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EU extends sectoral sanctions against Russia

On 1 July 2016, the EU Council extended its economic sanctions against Russia and certain sectors of its economy until 31 January 2017 (Decision 2016/1071).

The European Union first imposed the sectoral sanctions against Russia on 31 July 2014 in connection with Russia’s perceived actions in the conflict in Ukraine. In September 2014, the sanctions were extended to include the financial, energy and defence sectors, as well as the importation and exportation of dual-use goods.

On 19 March 2015, the European Council linked the duration of the sanctions to the full implementation of the Minsk Agreements, such implementation being at the time expected to take place by 31 December 2015.

In view of the failure to fully implement the Minsk Agreements in due course, the European Council has already twice further extended the economic sanctions, initially on 22 June 2015 until 31 January 2016 and subsequently on 21 December 2015, until 31 July 2016. The latest extension postpones the expiry of these restrictive measures to 31 January 2017.

Accordingly, the following restrictions continue to apply:

  • limited access to the EU’s primary and secondary capital markets for five major Russian state-owned financial institutions and their subsidiaries established outside the EU, as well as for three major Russian energy and three defence companies;
  •  prohibition on importing and exporting weapons;
  • prohibition on exporting dual-use goods for military use; and
  • prohibition on Russia’s access to certain technologies and services that may be used for oil exploration and production.

Status of individual sanctions against specific citizens and organisations

Individual property sanctions and travel-related bans against 146 Russian and Ukrainian citizens, as well as 37 companies and organisations whose assets are frozen in the EU, are presently in force until 15 September 2016. At the time of writing, no decision has been taken with regard to the extension of these sanctions.

Sanctions against Crimea

On 17 June 2016, restrictions imposed on Crimea and Sevastopol were extended until 23 June 2017. Accordingly, it is still prohibited to import into the EU, any goods produced in Crimea and Sevastopol, as well as to directly or indirectly finance or insure such goods. There is an exception in respect of goods that have the relevant certificate and proof of origin issued by the Ukrainian authorities.

Russia’s counter-sanctions

The prolongation of EU sanctions resulted in Russia’s extension, until the end of 2017, of its restrictions on importation of certain agricultural products, raw materials and foodstuffs from the EU, the United States and other countries that imposed sanctions on Russia.

Conversely, the sanctions against Turkey have been partially lifted by a Decree of the President of Russia on 30 June 2016. The prohibition on charter flights between Russian and Turkey has been lifted and Russia is no longer advising its citizens not to travel to Turkey. Negotiations are also underway with a view to improving economic relations between the two countries.

Authors

Heidemann Thomas
Dr. Thomas Heidemann
Partner
Moscow