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EU-Russia Sanctions Update 17 March 2022


9 MARCH 2022

On 9 March 2022 the EU Commission adopted new measures imposing restrictive measures on 160 individuals and more closely aligning sanctions applicable to Russia and Belarus.

For Belarus, the measures introduce SWIFT prohibitions similar to those in the Russia regime, and clarifying that crypto assets fall under the scope of “transferable securities”. The agreed measures would:

  • Restrict the provision of SWIFT services to Belagroprombank, Bank Dabrabyt, and the Development Bank of the Republic of Belarus, as well as their Belarusian subsidiaries.
  • Prohibit transactions with the Central Bank of Belarus related to the management of reserves or assets, and the provision of public financing for trade with and investment in Belarus.
  • Prohibit the listing and provision of services in relation to shares of Belarus state-owned entities on EU trading venues as of 12 April 2022.
  • Significantly limit the financial inflows from Belarus to the EU, by prohibiting the acceptance of deposits exceeding €100.000 from Belarusian nationals or residents, the holding of accounts of Belarusian clients by the EU central securities depositories, as well as the selling of euro-denominated securities to Belarusian clients.
  • Prohibit the provision of euro denominated banknotes to Belarus.

For Russia, the amendments introduce new restrictions on the export of maritime navigation and radio communication technology, adds Russian Maritime Register of Shipping to the list of state-owned enterprises subject to financing limitations and introduces a prior information sharing provision for exports of maritime safety equipment.

The EU also confirmed that loans and credit can be provided by any means, including crypto assets, as well as further clarified the notion of “transferable securities”, so as to clearly include crypto-assets, and thus ensure the proper implementation of the restrictions in place.

Furthermore, an additional 160 individuals have been listed in respect of actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine.

The listed individuals include:

  • 14 oligarchs and prominent businesspeople involved in key economic sectors providing a substantial source of revenue to the Russian Federation, notably in the metallurgical, agriculture, pharmaceutical, telecom and digital industries, as well as their family members.
  • 146 members of the Russian Federation Council, who ratified the Russian Government decisions to recognise the autonomous regions of Donetsk and Luhansk. 

15 MARCH 2022

On 15 March 2022 the EU adopted a fourth package of sanctions in response to Russia’s military aggression against Ukraine.   

The EU has designated 15 individuals including Russian oligarchs and 9 entities operating in the Russian aviation, military, shipbuilding and machine building sectors, to the EU sanctions list (Council Implementing Regulation (EU) 2022/427). 

The designated entities include: Rosneft Aero; JSC Rosoboronexport; JSC NPO High Precision Systems; JSC Kurganmashzavod; JSC Russian Helicopters; PJSC United Aircraft Corporation; JSC United Shipbuilding Corporation; JSC Research and Production Corporation Uralvagonzavod, and JSC Zelenodolsk Shipyard (A. M. Gorky Zelenodolsk Plant). 

Where an individual is listed, it is advisable to conduct an ownership and control analysis to establish any impact on a linked company with which they are transacting.  The Commission Opinion of 8th June 2021 is helpful in identifying the factors to take into account and the approach to be taken. 

The other measures (Council Regulation (EU) 2022/428 amending EU Regulation no. 833/2014) include:  

  • Prohibition on the sale, supply, transfer or export of equipment or technology (whether or not originating in the EU) which is listed in Annex II to a person or entity in Russia or for use in Russia.  Annex II includes certain goods and technology suited to certain categories of exploration and production projects. It is also prohibited to provide technical assistance or financial assistance (which is defined to include insurance or reinsurance) in respect of these activities. However, this ban does not apply to the transport of fossil fuels, in particular coal, oil and natural gas from or through Russia into the EU. There is an exemption until 17 September 2022 for the performance of contracts concluded before 16 March 2022 provided that the competent authority of the EU member state has been given five working days prior notice.  
  • Ban on new investments in the Russian energy sector, which includes creating any new joint venture with an entity incorporated or constituted under Russian law or any other third country. 
  • Ban on the import or transport of iron and steel products listed in Annex XVII into the EU if they originate in Russia or have been exported from Russia. This includes a ban on providing insurance or reinsurance. However, there is an exemption until 17 June 2022 for the performance of contracts concluded before 16 March 2022.  
  • Prohibition on transactions with certain state-owned Russian companies listed in Annex XIX.  There is an exemption until 15 May 2022 for performance of contracts concluded before 16 March 2022. This ban does not apply to:  
  1. transactions which are strictly necessary for the purchase, import or transport of fossil fuels, in particular, coal, oil and natural gas, as well as titanium, aluminium, copper, nickel, palladium and iron ore from or through Russia into the EU; or to
  2. transactions related to energy projects outside Russia in which the companies listed in Annex XIX is a minority shareholder.
  • Prohibition from 15 April 2022 on the provision of credit rating services or providing access to any subscription services in relation to credit rating activities to Russian clients.
  • Prohibition on the sale, supply, transfer or export directly or indirectly of luxury goods as listed in Annex XVIII from the EU to Russia.

Many of the above restrictions outlined above include corresponding prohibitions against the provision of insurance and reinsurance. As a consequence, even if a Member is not directly impacted by the Regulation (because, for example, they are domiciled outside the EU), the Club may not be able to provide cover for engaging in these activities.