Since 2014, the EU has progressively imposed sanctions on Russia in response to the war in Ukraine. Following the Russian invasion into Ukraine in February 2022 and the ongoing military aggression, more comprehensive and robust sanctions have been imposed by the EU in eleven sanctions packages against Russia on 23 February, 25 February, 28 February/2 March, 15 March, 8 April, 3 June,21 July, 6 October, 16 December 2022, 25 February and 23 June 2023.
The measures include:
- individual sanctions (asset freezes, prohibition to provide funds or economic resources);
- economic sanctions (restrictions on exports, imports, transit and the provision of services);
- price cap on Russian oil;
- media sanctions;
- anti-circumvention measures.
The basic legal acts are Council Regulation (EU) No 269/2014 (regarding individual sanctions) and Council Regulation (EU) No 833/2014 (all other sanctions), as amended by each sanctions package.
In addition, the EU has stopped treating Russia as a Most-Favoured-Nation within the WTO framework as of 15 March 2022. For the time being the EU decided not to increase import tariffs, but this could change in the future.
Individual Sanctions (Asset freeze and prohibition to provide funds or eco-nomic resources)
The EU has by now designated almost 1,800 individuals and legal entities, including:
- Approx. 1,550 individuals, including top political representatives such as Vladimir Putin and Sergey Lavrov, members of the Russian State Duma, the Russian National Security Council and the Russian military, propagandists, political parties, media holdings as well as wealthy individuals and businesspeople (among them “oligarchs”) and their relatives and individuals considered to be responsible for atrocities committed in Bucha and Mariupol, missile strikes against civilians and critical infrastructure, kidnappings and subsequent illegal adoptions of Ukrainian children, recruitment of Syrian mercenaries to fight in Ukraine, members of the proxy governments of the illegally annexed Ukraine regions, facilitation of circumvention or for operating in the Russian IT-sector with a license administered by the Federal Security Service of the Russian Federation (FSB), as well as
- Approx. 250 legal entities including 15 banks – Alfa Bank, Bank Rossiya, CMR Bank, Credit Bank of Moscow, Far Eastern Bank, MRB Bank Novikombank, Otkritie FC Bank, Promsvyazbank, Rosbank, Sberbank, Sovcombank, Tinkoff Bank, VEB/Vnesheconombank and VTB Bank.
The designated individuals are subject to:
- Travel ban preventing them from entering or transiting through the EU
- Asset freeze
- Prohibition on providing funds or economic resources.
The designated legal entities are subject to:
- Asset freeze
- Prohibition on providing funds or economic resources.
The European Commission takes the view that the asset freeze and the prohibition on providing funds or economic resources apply not only to the individuals and legal entities actually designated, but also to all entities owned or controlled by such designated persons, unless it can be demonstrated that the respective economic resources or funds are outside the control of the designated person, and/or that the funds or economic resources provided would in fact not reach or benefit the designated person.
In practice, this essentially means that EU companies may no longer deal with designated individuals or entities and the entities owned or controlled by them.
Economic Sanctions
The EU has imposed various types of economic sanctions, such as:
- Restrictions on the export of goods and technologies
- Restrictions on imports of certain goods
- Restrictions on providing financing or financial assistance or otherwise on access to the EU capital markets
- SWIFT ban on certain Russian banks
- Prohibitions on providing rating or certain consultancy and advisory services (advertising, architecture, auditing, bookkeeping, engineering, IT, legal, management, marketing, PR, tax)
- Prohibitions on transactions with the Russian Central Bank
- Prohibitions on public financing or investment in Russia
- Prohibitions on investment/contribution to projects co-financed by the Russian Direct Investment Fund
- Prohibition on providing certain services in the transport and logistics sectors (e.g. ban on road transport in the EU for Russian trucks, trailers and semi trailers, restriction or access to EU airspace and EU ports)
- Prohibitions on the provision of banknotes denominated in any official currency of EU Member States to Russia
- Prohibitions on new investments in the Russian energy sector and Russian quarrying and mining sectors.
These sanctions apply to various industry sectors, as described in more detail below.
General restrictions on trade in goods and technologies
The EU imposed restrictive measures regarding export and imports of various goods and technologies. Typically, these restrictive measures include prohibitions on
- providing technical assistance, brokering services or other services or
- providing financing and financial assistance
- selling, licensing, transferring referring IP rights and trade secrets
in relation to these goods and technologies.
Areas such as food, agriculture, health and pharmaceuticals remain mostly excluded from the sanctions. Additional restrictions exist for individual sectors such as energy, quarrying or mining, transport or financial services (see below in the sector segments):
- Export restrictions: Prohibition to sell, supply, transfer or export to Russia, or for use in Russia:
- dual-use goods and technology (as listed in Annex I Dual-Use Regulation);
- firearms and ammunitions (as listed in Annex I Reg. 258/2012 and in Annex XXXV Reg. 833/2014)
- specific goods and technologies for oil exploration (as listed in Annex II Reg. 833/2014) or suited for oil refining and liquefaction (as listed in Annex X Reg. 833/2014)
- high-tech goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector (as listed in Annex VII Reg. 833/2014)
- industrial goods and technology of a great variety which could contribute to the enhancement of Russian’s industrial capacities (as listed in Annex XXIII Reg. 833/2014)
- luxury goods with values from EUR 300 (as listed in Annex XVIII Reg. 833/2014).
- Import restrictions: Prohibition to purchase, import, or transfer (partially: transport) certain goods and technologies into the EU if they originate in Russia or are exported from Russia:
- iron and steel products (as listed in Annex XVII Reg. 833/2014)
- goods of various types including cements, rubber products, wood, spirits, liquor, high-end seafood, petroleum products, bitumen, asphalt, synthetic rubber etc. which generate significant revenues for Russia (as listed in Annex XXI Reg. 833/2014)
- gold and jewellery products (as listed in Annex XXVI and XXVII Reg. 833/2014).
- Transit restrictions: Prohibition to transit certain goods and technologies through the territory of Russia regardless of the final destination to mitigate circumvention risks
- firearms and ammunitions (as listed in Annex I Reg. 258/2012 and in Annex XXXV Reg. 833/2014)
- dual-use goods and technology (as listed in Annex I Dual-Use Regulation)
- high-tech goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector (as listed in Annex VII Reg. 833/2014)
The EU further imposed a general transaction prohibition with listed entities (in Annex XIX Reg. 833/2014) which prohibits entering into any transaction with these entities, entities owned more than 50% by listed entities or acting on their behalf or at their direction.
The EU imposed a general prohibition of Russian nationals and entities in procurement contracts in the EU.
For some prohibitions winding-down periods are foreseen. Also, for some restrictions, exemptions or authorisations are available, mostly depending on the intended use (e.g. medical or humanitarian purposes).
Energy Sector and Mining or Quarrying Sectors
In the energy sector as well as the mining or quarrying sectors the EU imposed restrictive measures regarding export, import and investments.
- Prohibition to sell, supply, transfer or export to Russia, or for use in Russia, goods and technologies in the oil exploration, oil refining sector and gas liquefaction sectors (as listed in Annex II Reg. 833/2014), including prohibition to provide technical assistance, brokering services or other services or financing and financial assistance or selling, licensing, transferring referring related IP rights and trade secrets.
- Prohibition to purchase, import or transfer crude oil or petroleum products (as listed in Annex XXV Reg. 833/2014) originating in or exported from Russia, subject to certain exceptions.
- Prohibition to newly invest in the Russian energy sector and to provide investment services directly related thereto
- Price cap on Russian oil, inter alia for crude oil at $ 60 per barrel
- Prohibition to newly invest in the Russian mining or quarrying sectors and to provide investment services directly related thereto
- Prohibition to provide gas storage capacity to Russian persons in the EU
Financial services/business services
In the financial services/business service sectors, the EU imposed restrictive measures regarding the provision of financial services and access to EU capital markets, as well as bans on providing SWIFT services to certain banks and restrictions on providing rating services and certain professional services.
- Prohibition to purchase, sell or deal with securities issued by certain Russian banks, the Russian Central banks and certain entities (as listed in Annexes III, V, VI, XII, XIII Reg. 833/2014), or to provide investment services for or assistance in the issuance of these securities.
- Prohibition to make or be part of any arrangement to make new loans to certain Russian banks, the Russian Central banks and certain entities (as listed in Annexes III, V, VI, XII, XIII Reg. 833/2014).
- Prohibition to provide public financing or financial assistance for trade with, or investment in, Russia.
- Prohibition to invest, participate or otherwise contribute to projects co-financed by the Russian Direct Investment Fund.
- Prohibition to sell, supply, transfer or export banknotes denominated in any official currency of a Member State to Russia or for use in Russia.
- Prohibition to sell transferable securities or UCITS providing exposure to such securities to Russian persons
- Prohibition to accept deposits from Russian persons/persons residing in Russia, if total value of deposits exceeds EUR 100,000.
- Prohibition to provide crypto-asset wallet, account or custody services to Russian nationals or natural persons residing in Russia or any legal person, entity or body established in Russia.
- Prohibition to provide rating services to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia.
- Prohibition to provide professional services to the Russian government, as well as to legal persons, entities or bodies established in Russia, in particular certain
- consultancy services such as accounting, auditing (including statutory audit), bookkeeping and tax consulting services, business and management consulting, and public relations services;
- architectural and engineering services, non-contentious legal advisory services and IT consultancy services;
- market research and public opinion polling services, technical testing and analysis services and advertising services.
- Prohibition to act as, or arrange for another person to act as, a trustee, nominee shareholder, director, secretary or a similar position, for a trust or similar legal arrangement, where the trustor or beneficiary is Russian.
- Prohibition to hold any posts in the governing bodies of any legal person, entity or body referred to in Annex XIX Reg. 833/2014, of entities owned more than 50% by such entities or of entities acting on their behalf or at their direction.
- SWIFT ban for the following banks:
- Bank Rossiya
- Credit Bank of Moscow
- Novikombank
- Otkritie FC Bank
- Promsvyazbank
- Rosselkhozbank JSC
- SberBank
- Sovcombamk
- VEB/Vnesheconombank
- VTB Bank.
Russian nationals or persons residing in Russia, with the exception of nationals of EU, EEA and Switzerland, are prohibited from holding any posts in the governing bodies of the owners or operators of certain critical EU infrastructures as of 27 March 2023.
Transport Sector/Aviation/Maritime
In the transport sector the EU imposed restrictive measures regarding export, provision of insurance services, access to airspace/ports and provision of services.
- Prohibition to sell, supply, transfer or export to Russia, or for use in Russia, goods and technologies suited for use in aviation or airspace and of jet fuel and additives (as listed in Annexes XI and XX Reg. 833/2014), including prohibitions to transit these through the territory of Russia provide technical assistance, brokering services or other services or financing and financial assistance.
- Prohibition to sell, supply, transfer or export to Russia, or for use in Russia, maritime navigation goods and technology (as listed in Annex XVI Reg. 833/2014), including prohibition to provide technical assistance, brokering services or other services or financing and financial assistance.
- Prohibition to provide insurance or reinsurance services in relation to Russian aircraft or spacecraft or parts thereof.
- Closure of EU airspace to all Russian-owned and Russian-registered aircraft.
- Closure of EU ports to Russian vessels.
- Prohibition to provide access to EU ports and locks to any vessel irrespective of their flag suspected for performing ship-to-ship transfers suspectedly in breach of import restrictions in the oil sector, for not notifying the authorities of ship-to-ship transfers timely or for manipulating the navigation tracking system
- Prohibition on Russian road transport operators to transport goods by road and full ban of Russian (semi-)trailers within the EU
- Pre-flight notification obligation for non-scheduled flights between Russia and the Union (direct or via a third country).
Media Sanctions
The EU suspended the broadcasting activities in the EU of multiple Russian media outlets – including Sputnik, Russia Today, Rossiya RTR / RTR Planeta, Rossiya 24 / Russia 24, Rossiya 1, TV Centre International, NTV/NTV Mir, REN TV and Pervyi Kanal – via cable, satellite, IPTV, platforms, websites and apps. All relevant licences, authorisations and distribution arrangements are suspended. The advertising of products or services on sanctioned outlets has also been prohibited.
Anti-circumvention measures
A novel circumvention tool allows the EU to restrict the sale, supply, transfer or export of goods and technology whose export to Russia is already prohibited – mostly battlefield products and technologies – to third countries that are expected to be used for circumvention. The respective goods and technologies will be listed in Annex XXXIII Reg. 833/2014 according to CN codes and indicate the affected third country separately for each good.
For the time being Annex XXXIII Reg. 833/2014 remains empty and the EU has vowed to use this new tool only as a measure of last resort. Decisions to include a country in that Annex require a unanimous decision by the Council, so it remains to be seen how quickly countries will be added to the Annex.
Restriction of trade with the regions of Crimea, Sevastopol, Donetsk, Luhansk and Zaporizhzhia
The EU also has imposed restrictions on dealing with the non-government controlled areas of Crimea, Sevastopol, Donetsk, Luhansk, Kherson and Zaporizhzhia by Council Regulation (EU) 2022/263. The restrictions are much like the restrictions the EU has imposed on Crimea and Sevastopol since 2014 in Council Regulation (EU) No 692/2014:
- The EU has imposed a general import ban on any goods originating in the regions of Crimea, Sevastopol, Donetsk and Luhansk. Financing or financial support, insurance or reinsurance relating to the import of such goods is equally prohibited.
- The EU has imposed an export ban of certain listed goods from the transport, telecommunications and energy sectors, or the prospecting, exploration and production of oil, gas and mineral resources in the regions of Crimea, Sevastopol, Donetsk and Luhansk. Technical assistance, brokering or financing or financial assistance regarding these goods are equally prohibited.
- The EU has imposed certain investment prohibitions, e.g. regarding the acquisition of real estate, (shares of) companies or regarding the creation of joint ventures in the regions of Crimea, Sevastopol, Donetsk and Luhansk.
- The EU has imposed a prohibition to provide services directly related to tourism activities in the regions of Crimea, Sevastopol, Donetsk and Luhansk.
Exemptions are available under certain circumstances.
Restrictions on trade with Belarus
In response to the involvement of Belarus in the Russian invasion into Ukraine the EU has also substantially widened the economic sanctions imposed on Belarus by Council Regulation (EC) No 765/2006. The sanctions include:
- individual sanctions against 195 individuals and 35 entities (asset freeze, prohibition to provide funds or economic resources, travel ban)
- economic sanctions (restrictions on exports and imports and the provision of services)
- a SWIFT ban for five Belarusian banks
- a prohibition on transactions with the Central Bank of Belarus
- limits on the financial inflows from Belarus to the EU
- a prohibition on the provision of euro-denominated banknotes to Belarus.
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