E.U. Response to Ukraine Crisis
23 FEBRUARY 2022
On 23 February 2022, the EU implemented a new round of sanctions in response to the recognition by Russia of the non-government-controlled areas of Donetsk and Luhansk in Ukraine as independent entities, and the deployment of Russian troops in those regions. Overall, the package of measures severely curtails the ability of EU persons to conduct business involving prominent Russian banks, members of the Russian Government, and the regions of Donetsk and Luhansk. The measures include:
- sanctions against the 336 members of the Russian parliament who voted in favour of the recognition of the separatist regions of Luhansk ad Donetsk
- sanctions against 27 individuals and entities over their actions against territorial integrity, sovereignty and independence of Ukraine
- restrictions on economic relations with the non-government-controlled areas of Donetsk and Luhansk
- restrictions Russia's access the EU’s capital and financial markets and services
Those designated include members of the Russian government; banks and business persons/oligarchs supporting financially or materially Russian operations in Donetsk and Luhansk, or benefitting from them; senior military officers, who played a role in the invasion and destabilisation actions; and individuals alleged to be responsible for leading a disinformation war against Ukraine. Restrictive measures include an asset freeze and a prohibition from making funds available to the listed individuals and entities. In addition, a travel ban applicable to the listed persons prevents these from entering or transiting through EU territory.
Measures targeting Luhansk and Donetsk specifically include an import ban on goods from those areas, restrictions on trade and investments related to certain economic sectors, a prohibition to supply tourism services, and an export ban for certain goods and technologies.
As of 25 February, the EU has promised a further set of sanctions against Russia covering the financial sector, the energy and transport sectors, dual-use goods as well as export control and export financing, visa policy, additional listings of Russian individuals and new listing criteria. Details to follow.
EU Implementing Regulation 2022/260
Pursuant to EU Implementing Regulation 2022/260 of 23 February 2022, 22 individuals and 4 entities were added to the list of persons, entities and bodies subject to restrictive measures as set out in Annex I to Regulation (EU) No 269/2014. Included in this list are:
- Internet Research Agency
- Bank Rossiya
EU Implementing Regulation 2022/261
Pursuant to EU Implementing Regulation 2022/261 of 23 February 2022 all 336 members of the Russian State Duma were designated and subject to the restrictive measures as set out in Annex I to Regulation (EU) No 269/2014
EU Implementing Regulation 2022/262
Pursuant to EU Implementing Regulation 2022/262 23 February 2022 further measures include sectoral prohibitions aimed at curtailing Russia's access the EU’s capital and financial markets, the purpose of which is to limit Russia’s ability to finance its military operations. These measures extend existing sanctions under EU Regulation 833/2014 which had already imposed restrictions against the sale, supply, transfer or export of dual-use goods and technology to any person, entity or body in Russia or for use in Russia, if those items are for military use or for military end-users
sale of such goods and technology to specified legal persons in Russia and prohibits the provision of technical assistance and other related services as well as financing and financial assistance related to such goods and technology
EU Regulation 833/2014 also:
- requires operators to obtain a prior authorisation for the sale, supply, transfer or export of certain technologies for the oil industry in Russia and prohibits the provision of associated services necessary for deep-water oil exploration and production, arctic oil exploration and production or shale oil projects in Russia, including its Exclusive Economic Zone and Continental Shelf
- prohibits the provision of technical assistance related to the goods and technology listed in the Common Military List of the European Union or related to the provision, manufacture,
- maintenance and use of such goods
- imposes restrictions on access to the capital market for certain Russian financial institutions
Under EU Regulation 2022/262 additional measures have been implemented under which it is prohibited to:
- directly or indirectly purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments issued after 9 March 2022 by:
- Russia and its government; or
- the Central Bank of Russia; or
- a legal person, entity or body acting on behalf or at the direction of the entity referred to in point (b).
- directly or indirectly make or be part of any arrangement to make any new loans or credit to any of those persons after 23 February 2022.
The prohibitions do not apply to drawdown or disbursements made under a contract concluded before 23 February 2022.
Under EU Regulation 2022/263 dated 23 February 2022, additional measures were introduced including wide-ranging prohibitions including:
- restrictions on import of goods originating in the non-government controlled areas of Donetsk and Luhansk and on the provision, directly or indirectly, of financing or financial assistance, as well as insurance and reinsurance, related to the import of such goods, with the exception of goods having been granted a certificate of origin by the Government of Ukraine, and subject to an exemption for the execution until 24 May 2022 of trade contracts concluded before 23 February 2022 or ancillary contracts necessary for the execution of such contracts.
- trade in goods and technology for use in certain sectors in the non-government controlled areas of Donetsk and Luhansk, and services in the sectors of transport, telecommunications, energy or the prospecting, exploration and production of oil, gas and mineral resources, as well as services related to tourism activities in the non-government controlled areas of Donetsk and Luhansk. Prohibitions extend to technical assistance or brokering services, and financing or financial assistance related to such goods and technology, subject to an exemption for the execution until 24 August 2022 of an obligation under contracts concluded before 23 February 2022, or ancillary contracts necessary for the execution of such contracts.
- technical assistance, or brokering, construction or engineering services directly relating to infrastructure in the sectors outlined above subject, to an exemption for the execution until 24 August 2022 of an obligation under contracts concluded before 23 February 2022, or ancillary contracts necessary for the execution of such contracts..
- services directly related to tourism activities, subject to an exemption for the execution until 24 August 2022 of an obligation under contracts concluded before 23 February 2022, or ancillary contracts necessary for the execution of such contracts.
25 FEBRUARY 2022
The EU imposed asset freeze sanctions on Russia's President Vladimir Putin and Minister of Foreign Affairs Sergey Lavrov. In addition, under Council Decision (CFSP) 2022/331, the EU imposed sanction on the members of the National Security Council who supported Russia's immediate recognition of the two self-proclaimed republics Donetsk and Luhansk. In addition, also added were persons identified as having facilitated the Russian military aggression from Belarus, as well as those members of the State Duma (to the extent not already sanctioned) who ratified the government decisions of the 'Treaty of Friendship, Cooperation and Mutual Assistance between the Russian Federation and the Donetsk People's Republic and between the Russian Federation and the Luhansk People's Republic'.
EU investment sanctions may also affect dealings with shipping entities including the owner/operator of the port of Novorrosisk under the following provisions:
It shall be prohibited to directly or indirectly purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments, issued after 12 April 2022 by:
(a) a legal person, entity or body established in Russia, which is publicly controlled or with over 50 % public ownership and in which Russia, its Government or Central Bank has the right to participate in profits or with which Russia, its Government or Central Bank has other substantial economic relationships, as listed in Annex VI;
(b) a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex VI; or
(c) a legal person, entity or body acting on behalf or at the direction of an entity referred to in point (a) or (b) of this paragraph.
Novorossiysk Commercial Sea Port
Rostec (Russian Technologies State Corporation)
JSC PO Sevmash
United Shipbuilding Corporation
This is not an asset-freeze designation, and applies only to limited activities involving investments. However, depending on the language used this may activate some c/p sanctions clauses.