E.U. Russia Sanctions Update

EU-UKRAINE SANCTIONS UPDATE

26 FEBRUARY 2022

On 26 February 2021, a number of countries including the US, UK, France, Germany, and Italy released a coordinated statement outlining their commitment to further sanctions measures in response to the Ukraine conflict. Those measures are likely to include:

Removal of certain Russian banks from the SWIFT messaging system.
Restrictive measures to prevent the Russian Central Bank from deploying its international reserves to counteract the impact of sanctions.
Targeting individuals and entities determined to be facilitating the invasion of Ukraine, which will include limiting “golden passport” facilities which enable wealthy Russians to gain citizenship and access to financial systems outside of Russia.

Further details are awaited.

28 FEBRUARY 2022

Pursuant to Council Decision (CFSP) 2022/327 & Council Regulation (EU) 2022/328, the EU implemented the following package of measures:

Expansion of existing restrictions under EU Regulation 833/2014 in respect of dual-use goods and technology to or for use in Russia, and goods and technology which might contribute to Russia’s military and technological enhancement, or the development of the defence and security sector;
Expansion of financial restrictions on access by certain Russian entities to EU capital markets;
Prohibition on the provision of services in relation to shares of Russian state-owned entities on EU trading platforms;
Prohibition on the acceptance of deposits from Russian nationals and residents or entities established in Russia exceeding €100,000;
Prohibition on the provision of services by EU central securities depositories and the sale of euro-denominated securities to Russian people/entities.

Of particular note are the provisions which affect use of ports and related facilities at certain Russian ports. Article 5 4 provides that:

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 XIII; or

(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 Annex XIII; 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.

Specifically listed in Annex XIII and therefore subject to these restrictions are:

Almaz-Antey; Kamaz; Novorossiysk Commercial Sea Port; Rostec (Russian Technologies State Corporation); Russian Railways; JSC PO Sevmash; Sovcomflot; and United Shipbuilding Corporation.

Novorossiysk Commercial Sea Port (NCSP) is reported to be the largest port operator in Russia, and that NCSP Group operates terminals at ports of Novorossiysk (Black Sea), Primorsk and Kaliningrad (Baltic Sea) - https://nmtp.info/en/ - and NCSP Group includes 9 stevedoring companies. Among them is the largest stevedoring company in Russia which is also named Novorossiysk Commercial Sea Port (Public Joint Stock Company "Novorossiysk Commercial Sea Port" or PJSC NCSP) - https://nmtp.info/en/holding/about/company_structure/. At the time of writing it is unclear whether these restrictions are imposed on the whole NCSP Group or only one of its stevedoring companies, PJSC NCSP (Public Joint Stock Company "Novorossiysk Commercial Sea Port").

The EU also adopted a ban on any transactions with the Central Bank of Russia. Council Decision (CFSP) 2022/335.