Sanctions update 14 October

Sanctions updates of 25 February, 3 March, 11 March, 16 March , 14 April and June 8 and 22 July 

EU adopts eighth sanctions package

On 6 October 2022, the EU adopted a new, eighth sanctions package in light of Russia’s escalating war of aggression against Ukraine and the illegal annexation of Ukraine’s Donetsk, Luhansk, Zaporizhzhia and Kherson regions. In short, the eighth sanctions package includes the following updates:

Export restrictions

• The list of restricted items which might contribute to Russia’s military, industrial and technological enhancement, as well as its ability to develop its defense and security sector, has been expanded. The expanded list inter alia includes coal, certain electronic components (found in Russian weapons) and additional chemicals and goods that can be used for capital punishment, torture or other cruel, inhuman or degrading treatment.
  
  
• A prohibition on the sale, supply, transfer or export of listed civilian firearms, their parts and essential components and ammunition, military vehicles and equipment, paramilitary equipment and spare parts.
  
  
• Restrictions on the sale, supply, transfer or export of additional goods used in the aviation sector.

Import restrictions

• Extending the import restrictions on finished and semi-finished steel products that either originate in Russia or have been exported from Russia. The sanctions package also prohibits import of additional items that generate significant revenues for Russia, including items such as wood pulp and paper, cosmetics, certain elements used in the jewelry industry, cigarettes, textiles, footwear, certain machinery and chemical items.

Additional targets of asset freeze

• The EU has added around 30 persons and seven entities, inter alia targeting those involved in the sham “referenda” (e.g. the Central Election Commission of Russia), representatives of the defense sector and well-known individuals spreading disinformation about the war. In total, 1236 individuals and 115 legal entities are listed.

Services

• Bans the provision of crypto-asset wallet, account or custody services to Russian persons, irrespective of the amount of the wallet (previously, up to EUR 10,000 was allowed).
  
  
• Widens the scope of services that no longer can be provided to the government of Russia or legal persons established in Russia, including inter alia services relating to IT consultancy, legal advisory, engineering and architecture.

• • IT consultancy covers services relating to inter alia development and implementation of software and the installation of computer hardware.
    
    
  • Legal advisory covers inter alia the provision of legal advice to customers in commercial transactions involving the application or interpretation of law. It does not include legal advisory in the context of legal representation services, such as in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings.
    
    
  • Services relating to engineering and architecture inter alia covers urban planning and landscape architectural services and engineering-related scientific and technical consulting services.

Russian state-owned or controlled entities

• Bans EU nationals from holding posts on governing bodies of certain Russian state-owned or controlled legal persons, entities or bodies.
  
  
• Adds the Russian Maritime Register of Shipping to the list of Russian state-owned or controlled entities subject to a transaction ban. The port access and lock ban in the EU is also extended to vessels certified by the Russian Maritime Register of Shipping.

Geographical scopes

• Extend the geographical scope of the restrictive measures introduced on 23 February 2022 to also cover the non-controlled areas of Zaporizhzhia and Kherson.

Oil price cap

• Implements a ‘price cap derogation’ related to maritime transport which allows operators in the EU to undertake and support maritime transport of Russian crude oil and petroleum products to third countries, provided its price remains under a pre-established price cap. For crude oil, the price cap would take effect after 5 December 2022, and for refined petroleum products after 5 February 2023. Theses sanctions are aligned with US sanctions and the US sanctions authority, OFAC, has issued preliminary guidance as to how companies should act to ensure compliance.
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Listing criteria

• Broadens the listing criteria, on which specific designations may be based, to include those who facilitate the circumvention of EU sanctions.
  Companies (potentially) subject to EU sanctions jurisdiction should assess whether the amendments and clarifications included in the eighth sanctions package impact their business activities and compliance obligations.

The relevant legislation can be found here>>>

Guidance from the EU Commission as to the interpretation of the sanctions against Russia can be found here>>>