Germany: Sanctions On Russia – Restrictions On Access To Capital Markets

The EU has - as announced for several weeks in political debates - intensified the economic sanctions against Russia as from 1 August 2014. In this context, several EU Council regulations have recently been issued.

Through these regulations, the sanctions will take on a new dimension against Russia and will affect a great number of established business relationships between enterprises in the EU and Germany, respectively, and Russian business partners.

Whereas the measures of the EU were initially aimed at freezing funds and economic resources of certain natural and legal persons, entities and bodies and restricting certain investments (Council Regulation (EU) No 269/2014 of 17 March 2014 and implementing Council Regulation (EU) No 810/2014 of 25 July 2014), another set of far-reaching restrictive measures is now being implemented. The aim of the following Regulation is, among others, to restrict the access to capital markets for certain financial institutions:

Taking into account the format of a newsletter, the following is designed to provide a brief overview of the key provisions of the Regulation.

Among the "Sanctions Regulations" which have recently been adopted, Regulation 833/2014 is presumably one of the economically most relevant ones to German and European enterprises. 

1. Council Regulation (EU) No 833/2014

This Regulation relates to measures taken as from 1 August 2014 and does not, within the scope of Article 5 relevant for capital markets, cover transactions entered into before this date.

1.1 Article 5 prohibits "to directly or indirectly purchase, sell, provide brokering or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments with a maturity exceeding 90 days, issued after 1 August 2014" if these securities or instruments have been issued by certain persons or bodies.

1.1.1 The prohibition primarily relates to securities and money-market instruments issued by the banks listed in Annex III of the Regulation, namely Sberbank, VTB Bank, Gazprombank, Vnesheconombank (Veb) und Rosselkhozbank.

1.1.2 In addition, securities and money-market instruments issued by legal persons, entities or bodies established outside the European Union and whose proprietary rights are owned for more than 50 % by a bank mentioned above shall also be subject to the prohibition.

1.1.3 Finally, the prohibition also relates to such issuers acting on behalf, or at the direction of, banks as referred to in 1.1.1 above or persons, entities or bodies referred to in in 1.1.2 above.

1.2 The prohibition relates to securities and money-market instruments.

1.2.1 "Transferable securities" within the meaning of the Regulation are those classes of securities which are negotiable on the capital market, such as

  1. shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares,
  2. bonds or other forms of securitized debt, including depositary receipts in respect of such securities, as well as any
  3. any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement.

1.2.2 "Money-market instruments" shall mean those classes of instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers.

1.2.3 Instruments of payment shall not qualify as "transferable securities" and "money-market instruments" and are, thus, explicitly excluded from the restrictions.

1.3 In addition to the purchase and sale of certain securities and money-market instruments, Article 5 of the Regulation also prohibits to provide brokering or assistance in the issuance of, or otherwise deal with such securities or instruments. In this context, please note that the German version of the Council Regulation deviates from other language versions (e.g. the English, French and of Spanish version) as it does not refer to "brokering" but to "brokering services" (which has a different meaning according to its definition). However, in light of various other language versions of the Council Regulation (e.g. the English, French and Spanish versions which clearly refer to "brokering", "courtage", "intermediaciòn"), there are good arguments to interpret the German language accordingly and to see this point a mere drafting or translation error.

"Brokering" shall mean the following services and activities:

  1. reception and transmission of orders in relation to one or more financial instruments,
  2. execution of orders on behalf of clients,
  3. dealing on own account,
  4. portfolio management,
  5. investment advice,
  6. underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis or without a firm commitment basis,
  7. any other service in relation to the admission to trading on a regulated market or trading on a multilateral trading facility.

The above clearly shows the aim to avoid or restrict to the farthest possible extent the access to the capital market for the relevant financial institutions.

1.4 From now on, prior to exercising any activity in connection with securities and money-market instruments it will be essential to check whether

  1. the issuer is a bank expressly listed in Annex III of the Regulation, and
  2. the contemplated activity or transaction is prohibited due to the shareholding structure or the capacity in which the issuer acts or appears. 

2. Financial services of bodies not stated in Article 5 Annex III

Financial services with or of institutes not stated in Article 5 in connection with Annex III do not fall in the scope of application of the Council Regulation and are therefore generally still permitted.

2.1 However, it should be ensured that the relevant (generally permitted) financial service is not provided in connection with other services or transactions which are subject to other provisions of Regulation 833/2014 (or other EU sanctions regulations).

2.1.1 For example, according to Article 4 (1) b) of the Regulation 833/2014 it is prohibited to provide, directly or indirectly, financing or financial assistance related to the goods and technology listed in the Common Military List, including in particular grants, loans and export credit insurance, for any sale, supply, transfer or export of such items, or for any provision of related technical assistance to any natural or legal person, entity or body in Russia or for use in Russia. Even if not expressly stated, the prohibition could also include all types of avals to be granted for advance payments, fulfillment, "Good Performance" or warranty claims for the benefit of clients or suppliers.

2.1.2 The same applies to the direct or indirect financing of dual-use goods and technology, i.e. such items which are or may be intended, in their entirety or in part, for military us or a military end-user. The inclusion of such goods and technologies may have a substantial impact, since a wide range of goods could be affected (from machine-tools through chemicals to electronic semiconductors etc.).

2.2 Any contemplated financing transaction or activity having a direct or indirect connection to Russia, including such financing transaction or activity which is generally not prohibited under Article 5, needs to be examined with the greatest possible care.

2.3 According to Section 18 (1) Foreign Trade and Payments Act (Außenwirtschaftsgesetz – AWG), violations of these prohibitions constitute a criminal offence which may be punished with a prison sentence from three months to five years. According to Section 73 et seq. of the German Criminal Code (Strafgesetzbuch, StGB), the court may order the confiscation of what was obtained (e.g. proceeds) in connection with the crime. 

2.4 Pursuant to Article 10 of the Regulation 833/2014, actions by natural or legal persons, entities or bodies shall not give rise to liability of any kind on their part, if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in the Regulation. It remains to be seen to what extent an investigation duty exists in order to eliminate the existence of such reasonable cause and to exclude any such liability. However, in light of the reinforced measures recently taken by the EU, it can be expected that an increased examination standard is to be applied. To ensure that the criterion "no reasonable cause to suspect" is fulfilled, each relevant transaction and activity must be checked in respect of the existence of such "reasonable" causes. The examination and its result should be properly documented.

2.5 In addition, Sections 30, 130 of the Administrative Offences Act (Ordnungswidrigkeitengesetz - OWiG) remain to be mentioned. If, for example, a corporate body of a legal person, a partner of authorized to represent the relevant partnership having legal capacity, an authorized representative with full power of attorney (Generalbevollmächtigter), a holder of a registered power of attorney (Prokurist) or certain other persons authorized to manage the operations of a company have breached the prohibitions under the Regulation, an administrative fine may also be imposed on the company (see Section 30 OWiG). In case an employee not listed in Section 30 OWiG has committed any such crime or administrative offence, Section 130 OWiG applies. This means that, in addition to the acting person, an administrative fine may also be imposed on the holder of the undertaking or enterprise. Also in such case, the company may (in application of Section 30 OWiG) be subject to an administrative fine. In both cases (Section 30, 130 OWiG), the level of fines set forth (depending on the case, up to EUR 500.000,- or up to EUR 10 million) must be considered. Though, according to Section 17 para (4) OWiG the administrative fine shall exceed the economic benefit the offender has obtained by committing the administrative offence. Therefore, in such cases, the maximum amounts as defined by law are not relevant and may considerably be exceeded.

3. Amended Council Regulation (EU) No 269/2014

In this context we would like to point out that Council Regulation (EU) No 269/2014 concerning restrictive measures in view of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine has been again amended and extended by Council Regulation (EU) No 811/2014 of 25 July 2014 as well as by implementing Council Regulation (EU) No 810/2014 of 25 July 2014 and (EU) No 826/2014 of 30 July 2014. The Regulation provides for the freezing of funds of certain persons and entities and restrictions on certain investments as a response to the illegal annexation of Crimea and Sevastopol. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.