Recently, the EU has adopted its sixth Russia-related sanctions package, the UK and US have introduced additional sanctions against Russia and Russia has announced developments to its countermeasures.
This article has been prepared to indicate the main points of the said sanctions and developments mentioned above.
The EU adopted its sixth package of economic and individual sanctions targeting both Russia and Belarus.
The agreed package includes a series of measures as follows;
- Oil and petroleum import restrictions:
- The EU will prohibit the purchase, import or transfer of crude oil and certain petroleum products originating in Russia or exported from Russia into the EU. (as listed in Annex XXV to Council Regulation (EU9 833/2014)
- In addition, there are more restrictions on the direct or indirect provision of related services, such as technical and financial assistance.
- These import restrictions will apply over time and take approximately six months for crude oil and eight months for other refined petroleum products.
- Furthermore, certain exceptions and derogations are allowed, although some temporarily, for instance, related to prior contracts and imports into certain member states. Temporary exceptions may be allowed for imports of crude oil by pipeline into the EU member states that, due to their location, have a specific dependence on Russian supplies and have no practical alternative options. This will also benefit Bulgaria and Russia from temporary derogations regarding the import of Russian seaborne crude oil and vacuum gas oil.
- Oil transport services:
- The EU operators will be prohibited from insuring and financing the transport, specifically through maritime routes, of oil to third countries, after a wind-down period of six months. Since EU operators are essential providers of such services, it will be difficult for Russia to export its crude oil and petroleum products to the rest of the world.
- The EU will prohibit the import of seaborne crude oil from Russia and allow a transitory period of six months for existing contracts and spot transactions to adjust the global markets. The EU will also prohibit the import from Russia of refined petroleum products after a transitory period of 8 months for existing contracts and spot transactions. Imports by pipeline remain permitted for the time being. After a transitory period of eight months, the Member States importing Russian crude and petroleum products via pipeline will be unable to resell these products to the other Member States or third countries. This is to secure a level playing field between the Member States.
- Bulgaria, Croatia and Czechia will benefit from specific derogations for a limited time, allowing them to develop alternative supply routes.
- The majority of Russian oil delivered to the EU is seaborne. These restrictions will impact nearly 90% of Russian oil imports to Europe by the end of the year and reduce Russia's trade profits.
- Export restrictions:
- The EU expanded the list of natural, legal persons and entities associated with Russia's military-industrial complex, concerned by export restrictions, including both Russian and Belarusian entities, regarding various sectors such as dual-use goods and technology, electronics, communications, weapons, shipyards, engineering and scientific research.
- Moreover, the EU will expand the listed products under the prohibition on imports of goods that generate significant profit for Russia.
- In addition, the EU will expand the list of goods and technology, which may contribute to the technological enhancement of Russia's defence and security sector. This will include 80 chemicals which can be used to produce chemical weapons.
- Services restrictions:
- The provision of certain financial- business services such as bookkeeping, auditing, tax consulting services, accounting services, business and management consulting, public relations and consultancy services and cloud services to the Russian Government and Russian companies as well as to legal persons, entities or bodies established in Russia is prohibited.
- This will prevent the Russian government and companies from benefitting from European services that facilitate their businesses.
- There are some exceptions, including those relating to humanitarian purposes and civil society, prior contracts and services necessary for exercising the right of defence in judicial proceedings.
- De- SWIFT restrictions:
- The EU extended the existing prohibition on the provision of specialised financial messaging services (SWIFT) to three additional Russian credit institutions and Russia's largest bank Sberbank, Credit Bank of Moscow and Agricultural Bank, as well as one Belarusian financial institution, the Belarusian Bank For Development And Reconstruction.
- These banks have been removed from SWIFT, which is critical for the Russian financial system and Putin's ability to further wage war. It will further the isolation of the Russian financial sector from the global system.
- Asset freezes, Listing of Individuals and Entities:
- The EU sanctioned additional individuals and entities, including 65 individuals and 18 entities; those responsible for the atrocities committed by Russian troops in Bucha and Mariupol, individuals supporting the war, leading businesspersons and family members of listed oligarchs and Kremlin officials, as well as entities involved in the military sector, manufacturing equipment and software used during Russia's aggression against Ukraine.
- Broadcasting Suspension:
- The EU suspended the broadcasting activities in the EU of three more Russian state-owned outlets: Rossiya RTR/ RTR Planeta, Rossiya 24/ Russia 24 and TV Centre International.
- This sanction will not target the freedom of opinion, including specific safeguards for freedom of expression and journalistic activities.
- The measures also will not prevent those sanctioned media outlets and their staff from carrying out other activities in the EU other than broadcasting, such as research and interviews.
All the relevant links and the bibliography are:
- The UK has also added several Russia- related designated individuals and entities, including the family members, close associates and employees of oligarchs, to the freezing of asset sanctions list of its Russia financial sanctions regime.
- The UK announced prohibitions on certain goods imported into the UK, including Northern Ireland, that have originated in or been consigned from the territory covered by the Russian Federation and non-government-controlled Ukrainian territory, of goods such as silver and wood products and higher-end products.
- The UK Government set out the licensing process for traders to import goods, such as iron, steel, revenue-generating goods and silver, which are subject to trade prohibitions. (The Notice to Importers 2953: Russia import sanctions, Updated 23 June 2022, The Department for International Trade of UK Gov.)
- The UK Government announced additional trade sanctions against Russia by expanding the listed products facing bans and increasing tariffs. By these new sanctions, the UK will be imposing tariffs and prohibitions on over £1bn of Russian goods.
- The UK Russia (Sanctions) (EU Exit) (Amendment) (No. 9) Regulations entered into force on 29 April 2022. The UK will be imposing new trade restrictions with the amendment requiring:
- Social media services, including video-sharing platforms, to adopt suitable measures to prevent content created, uploaded or shared on the service by designated persons or entities (e.g., Russia's major state-owned media outlets) from being encountered by a UK-based user.
- Internet access services, as well as broadband providers, to adopt suitable measures to prevent UK-based users from accessing websites provided by designated persons or entities.
- App stores to adopt suitable measures to prevent UK-based users from downloading or accessing an application provided by designated persons or entities.
- This regulation permits the Secretary of State to designate the persons to whom these restrictions will apply.
- An explanatory memorandum of these measures entered into force on 4 May 2022. On the same day, The UK also announced a ban on services exports to Russia, cutting off UK services, including management consulting, accounting and public relations.
- Furthermore, the UK has now sanctioned over 1600 individuals and entities.
- The UK announced a new package of sanctions on Russian and Belarusian regimes targeting £1.7 billion in trade on goods on 9 May 2022.
- The export bans worth more than £250 million target Russia's manufacturing and heavy machinery sectors.
- The import tariffs on products worth £1.4 billion, including platinum and palladium.
- Further, the UK agrees with the EU on a ban relating to the insurance of ships carrying Russian oil.
- Finally, on 8 June 2022, the UK issued guidance for "Trading under sanctions with Russia" regarding what import and export restrictions apply due to sanctions for UK companies when trading with Russia, including trade sanctions, import/export bans and licensing, tariffs on Russian and Belarusian goods, financial sanctions, "getting paid" and transport sanctions.
- On 15 June 2022, the UK issued updated guidance on enforcement and monetary penalties for breaches of financial sanctions to reflect the Economic Crime (Transparency and Enforcement) Act 2022 (Commencement No. 2 and Saving Provision) Regulations.
All the relevant links and the bibliography are:
- On May 8, 2022, the US Department of the Treasury's Office of Foreign Assets Control (OFAC) announced new designated individuals and entities, including Financial Executives, Weapons Manufacturers, and State- Controlled Television Stations, which are critical to Russia's ability to wage war against Ukraine. These designations are as follows:
- The board members of two of Russia's most important banks, a Russian state-owned bank and 10 of its subsidiaries, first, Senior Executives of Russia's Largest Bank, Sberbank and its' 8 other current and recent members of the Executive Board, second, the board members of prominent Russian Bank Gazprombank (GPB) and its 27 members of GPB's Board of Directors and, last, Joint Stock Company Moscow Industrial Bank and its' 10 subsidiaries under Executive Order (E.O. )14024 were designated by OFAC.
- Limited Liability Company Promtekhnologiya, a Russian state-supported defence entity and weapons manufacturer, was designated by OFAC.
- Three of Russia's Top State-Owned Television Stations, which are ''Joint Stock Company Channel One Russia, Television Station Russia-1, and Joint Stock Company NTV Broadcasting Company'' were designated by OFAC under E.O. 14024.
- Moreover, OFAC issued a determination under E.O. 14071 that accounting, trust and corporate formation, and management consulting services are subject to a prohibition on the exportation, reexportation, sale, or supply, directly or indirectly, from the US, or by a US person, where located, to any person located in Russian Federation. This determination took effect on June 7, 2022.
- Further, OFAC issued a determination under E.O. 14024 that the accounting, trust and corporate information and management consulting services sectors of the Russian Federation economy are subject to sanctions allowing the imposition of sanctions on any individual or entity identified to operate or have operated in one of those sectors.
- The US Department of State targeted Russia's financial, defence, and marine sectors and promoting accountability for Russian and Belarusian Military officials by designating the Ministry of Defense's shipping company and six other maritime shipping companies, 69 vessels as blocked property and Fertoing, a marine engineering company, will also be blocked from accessing critical US technologies.
- The US Department of State imposed visa restrictions on over 2,600 Russian and Belarusian military officials. The restrictions included individuals who reportedly were in Russian military activities in Bucha and Russian military officials, and Russian-backed and Russian- installed purported authorities who have been involved in human rights abuses, violations of international humanitarian law, or public corruption in Ukraine.
- The US Department of State targeted additional Russian oligarchs and elites close to Putin, including God Nisanov, Maria Zakharova, and Alexey Mordashov.
- The Department of Treasury targeted Russian government officials and business leaders, luxury property of elites, luxury asset management and service companies, including Sergei Roldugin and his family members, yacht brokerages such as Imperial Yachts and its CEO and the President of United Aircraft.
- The Department of Commerce restricted the ability of the Russian military to obtain technologies and other items from the US and derived from specific US technology or software, including 71 parties located in Russia and Belarus to the Entity list.
- In conclusion, the US has added 1,000 parties to the Department of Treasury's SDN and over 300 parties to Commerce's Entity List.
All the relevant links and the bibliography are:
- Since 28 February 2022, the Russian President ('President') has signed numerous Decrees on special countermeasures in relation with the unfriendly actions of certain foreign states and international organizations that have imposed sanctions on Russian persons and entities to comply with the US, UK, and EU and other sanctions regimes against Russia and Belarus.
- On 3 May 2022, the President signed Decree No. 252 (Decree 6), ''Executive Order on Imposing Retaliatory Special Economic Measures in connection with the Unfriendly Actions of Certain Foreign States and International Organisations''. The purpose of this Decree is to protect the national interests of the Russian Federation in response to these unfriendly actions.
- Starting on the day Decree 6 comes into force, federal and regional government authorities, other government authorities, local self-government bodies, and organizations and individuals under the jurisdiction of the Russian Federation shall operate on the premise that special economic measures are to be applied to specific legal entities, individuals and organizations under their control.
- The Decree 6 imposes a ban not only on governmental officials at all levels but also on organizations and individuals under the jurisdiction of the Russian Federation, implementing agreements (including foreign trade contracts) with legal entities, individuals and organizations under their control, subject to the special economic measures, and on executing obligations under existing agreements (including foreign trade contracts) to individuals, within the span of the sanctions, in cases where these obligations are not fulfilled or partially fulfilled.
- The Decree 6 imposes bans on conducting any financial operations whose beneficiaries are persons or entities within the span of the sanctions.
- The Decree 6 also prohibits exporting goods or raw materials manufactured or extracted in Russia when delivered to individuals, under the sanctions, or by individuals, under the sanctions, to other individuals or entities.
- On 11 May 2022, the Russian Government adopted Governmental Decree No.851, in accordance with the prohibitions of the Decree 6 establishes:
- a list of sanctioned persons – 31 legal entities from Germany, France and other Europen countries and former European subsidiaries of Gazprom as well as from the USA and Singapore;
- additional criterias for transactions which are banned from being performed with the sanctioned entities are first, transactions involving the entry into Russian ports of vessels owned and/or chartered by, in the interest of, for or on behalf of sanctioned persons; second, transactions concluded for the benefit of sanctioned persons; last, transactions involving payments, securities transfers (and other operations) with the participation and/or for the benefit of sanctioned persons or entities; and the Ministry of Finance of the Russian Federation as the body authorized for submitting proposals to the Russian Government to amend the list of sanctioned persons, as well as to issue temporary licenses for certain transactions with sanctioned persons.
- Russian authorities, legal entities and citizens will not be able to conclude transactions with the designated sanctioned entities, persons and organizations under their control, fulfil obligations to them under completed transactions, and conduct financial transactions in their favor, including the concluded foreign trade contracts.
- The Russian government lifted the restriction on the supply of liquefied natural gas, for three months, from Yamal LNG to Gazprom Marketing & Trading Singapore, one of the companies of the Gazprom Germania group.
- On 23 March 2022, the Russian government prepared a legal framework for restricting ships' access from "unfriendly states" to Russian ports. The framework will allow the Russian government to introduce restrictions against ships from states that have restricted the access of Russian ships to their ports on short notice.
- On 24 May 2022, the Russian Duma passed the draft law (No. 104796-8) on the external administration of foreign companies related to "unfriendly states" under review by Russian Duma.
- On June 8, 2022, the Russian State Duma adopted a Federal Law "On amendments to article 52 of the Arbitration Procedure Code of the Russian Federation and Article 45 of the Civil Procedure Code of the Russian Federation". (law on the Right of Prosecutors to Challenge Transactions in Violation of Sanctions Retaliation)
- On June 8, 2022, the Russian State Duma adopted a Federal Law "On amendments to certain legislative acts of the Russian Federation". (law on Additional Powers of the Russian President to Ensure Financial Stability)
- On June 10, 2022, a draft federal law "On amendments to certain legislative acts of the Russian Federation and establishing special regulation of corporate relations in 2022" was submitted to the Russian State Duma for consideration. (draft law on Special Regulation of the Financial Market and Corporate Relations)
- On June 10, 2022, a draft federal law "On amendments to the Civil Procedure Code and the Arbitration Procedure Code of the Russian Federation in respect of the regulation of the grounds for dismissal of claims and in respect of establishment of exclusive jurisdiction for disputes involving foreign persons" was submitted to the Russian State Duma for consideration. (draft law on Exclusive Jurisdiction of Russian Courts for Disputes with Unfriendly Foreigners)
- On June 10, 2022, the Bank of Russia implemented requirements for transferring dividends paid on shares of Russian JSCs by depositories, in particular.
- As of 13 June 2022, the Russian Duma still reviews the legislative proposal criminalising compliance with Western sanctions (No. 102053-8).
- In conclusion, it is inevitable that the Russian Government will appoint other foreign officials, business people, military personnel and media persons considered to be involved in imposing sanctions against Russia for similar designations.
All the relevant links and the bibliography are:
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