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The new round of sanctions against Russia and Belarus entered into force on 3 June 2022.
The new EU sanctions are set out in five different regulations accessible here, here, here, here and here.
Regulation 2022/879[1] introduces a ban on certain types of oil and oil related products. Under the new regulation, it is prohibited to purchase, import or transfer, directly or indirectly, crude oil or petroleum products, as listed in Annex XXV of the regulation, if they originate in Russia or are exported from Russia. The EU member states Bulgaria, Croatia, and Czechia will benefit from specific derogations for a limited period of time, due to their reliance on pipeline dependency on Russian oil.
Regulation 2022/879 and regulation 2022/877[2] further removes three Russian (including Russia’s largest bank Sberbank[3]) and one Belarussian bank from the SWIFT system respectively. The four banks are:
Regulation 2022/879 includes a new prohibition on providing, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services to the Government of Russia or legal persons, entities or bodies established in Russia.
In addition to a general wind-down period until 5 July 2022 for services that are strictly necessary for the termination by 5 July 2022 of contracts which are no longer permitted and that have been concluded before 4 June 2022, or of ancillary contracts necessary for the execution of such contracts, there are certain specific exceptions to the prohibition.
First of all, the prohibition shall not apply to the provision of services that are strictly necessary for the exercise of the right of defense in judicial proceedings and the right to an effective legal remedy. Further, the prohibition shall not apply to the provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a member state.
Regulation 2022/879 also introduces measures to suspend the broadcasting activities of certain media outlets operating in the EU or directed at the EU under the permanent direct or indirect control of the leadership of the Russian Federation. Accordingly, Annex XV of the regulation is expanded with three entities.
Further, Regulation 2022/879 increases the list of persons connected to Russia’s defence and industrial base, on whom are imposed tighter export restrictions regarding dual-use goods and technologies as well as goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector. The new export bans on technology are primarily concerned with chemicals that can be used to produce chemical weapons. This is done by way of expanding Annex I on persons related to Russia’s defence and industry and Annex VII regarding export restrictions on technology.
Regulation 2022/877 implements similar measures for Belarus regarding persons connected to Belarus’ defence and industrial base.
Finally, regulation 2022/876[4] and regulation 2022/878[5] impose asset freezes on additional individuals and entities in relation to Belarus and Russia. The new listings include political, propaganda and business figures, individuals with close ties to the Kremlin and family members of previously designated persons[6].
On 3 May 2022 (prior to the latest sanctions package being put in place), the EU adopted Regulation (EU) 2022/699[7], which removes Russia as a destination eligible for general export authorisations under export control legislation. General export authorisations are export authorisations that generally allow the export of several or a large number of items to an unlimited number of recipients. General export authorisations greatly reduce time and effort that are required to export or transfer certain dual-use items. In addition to the general restrictions on exports of dual-use items to Russia, removing Russia from general export authorisations will likely impact the export and transfer of such items to Russia from the EU.
The scope of applicable sanctions targeting Russia has again been extended and Danish companies should ensure that their sanctions compliance programs, policies, screening processes and payment processes are updated to ensure that the newly enacted sanctions are appropriately addressed.
We recommend that Danish companies conduct a re-screening in regards to products and all business partners in light of the new extensive sanctions and designations of individuals.
We further recommend to closely monitor the situation in order to ensure compliance with potential new restrictions which may be imposed at short notice.
Gorrissen Federspiel closely follows the developments of sanctions against Russia and we can assist with the interpretation of and compliance with the applicable sanctions, as well as implementation of measures to ensure that sanctions are observed. If you have any questions, please contact a member of our CSR and Compliance team.
For more information on the previous EU sanctions packages, please see Gorrissen Federspiel’s newsletter of 11 April 2022, Gorrissen Federspiel’s newsletter of 16 March 2022, Gorrissen Federspiel’s newsletter of 10 March 2022, Gorrissen Federspiel’s newsletter of 2 March 2022, Gorrissen Federspiel’s newsletter of 28 February 2022 and Gorrissen Federspiel’s newsletter of 24 February 2022.
[1] Council Regulation (EU) 2022/879 of 3 June 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine
[2] Council Regulation (EU) 2022/877 of 3 June 2022 amending Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine
[3] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2802
[4] Council Implementing Regulation (EU) 2022/876 of 3 June 2022 implementing Article 8a(1) of Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine
[5] Council Implementing Regulation (EU) 2022/878 of 3 June 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine
[6] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2802
[7] Commission Delegated Regulation (EU) 2022/699 of 3 May 2022 amending Regulation (EU) 2021/821 of the European Parliament and of the Council by removing Russia as a destination from the scope of Union general export authorisations