Blog: Russian sanctions update

Sanctions against Russia have been in the headlines for many months now and are continuously evolving so we thought we’d give you a bullet-point overview of the situation as regards the EU sanctions regime against Russia. The situation between Russia and the West doesn’t seem to be getting much better and the EU’s sanctions are scalable – will things end up with near country-wide sanctions?

The latest EU sanctions against Russia include:

• Further restrictions on access to EU capital markets, a ban on EU nationals and businesses providing loans to several major Russian state-owned banks, new restrictions on trade in bonds, equity or similar financial instruments (issued by the same banks), and, further restrictions on several major Russian defence and energy companies. More individuals are now subject to a travel ban and asset freeze; the total now standing at 119 and 23 entities.

These recent sanctions add to the following:

• An embargo on the trade, import and export of arms and related material from/to Russia, which covers all items on the EU Common Military List;
• A prohibition on providing technical assistance, financing or financial assistance related to goods and technology listed in the EU Common Military List, including any sale, supply, transfer or export of these items, to any person in Russia or for use in Russia;
• A prohibition on selling, supplying, transferring or exporting dual-use items to any person in Russia where these items are or may be intended for military use or for a military end-user. This also applies to providing technical assistance, brokering services, financing or financial assistance related to these dual-use items. This prohibition does not cover exports of dual-use items, including for aeronautics and for the space industry, for non-military use or for a non-military end-user;
• Any sale, supply, transfer or export of listed energy (oil and gas) related equipment and technology, whether or not it comes from the EU, to any person in Russia or any other country is subject to prior authorisation by EU Member States if this equipment or technology is for use in Russia. Export authorisations will not be granted if the concerned equipment and technology are destined for deep-water oil exploration and production, Arctic oil exploration and production or shale oil projects in Russia;
• A prohibition on purchasing, selling, providing brokering services or assistance in view of transferable securities (such as shares, bonds) and money-market instruments (such as treasury bills, certificates of deposit) with a maturity exceeding 90 days, issued after the entry into force of the EU-Russia sanction regime by listed (major) state-owned Russian banks, development banks, institutions, their subsidiaries and those acting on their behalf;

Restrictive measures in all EU Member States also apply, meaning that those affected by the measures should implement adequate internal compliance measures and checks in relation to any existing and future contracts, transactions, shipments, dealings and/or agreements with parties in Russia and/or parties in other countries dealing with Russia in order to ascertain that the restrictive measures imposed by the EU against Russia are being fully complied with:

• within the EU;
• on board any aircraft or any vessel under the jurisdiction of an EU Member State;
• to any person inside or outside the EU who is a national of an EU Member State;
• to any legal person, entity or body, inside or outside the EU, that is incorporated or constituted under the law of an EU Member State; and,
• to any legal person, entity or body in respect of any business done in whole or in part within the EU.

Clearly the situation with sanctions is fluid and up-to-date advice is needed for each specific circumstance. Cordery has experience of advising on sanctions issues and we’re happy to give up to the minute specific advice.

 

André Bywater is a commercial lawyer with Cordery in London where he focuses on regulatory compliance, processes and investigations.