In a 9 May press statement President von der Leyen announced that the EU is considering a proposed eleventh package of sanctions against Russia. This update provides an overview of those proposals and a round-up of other recent sanctions developments.

EU – new sanctions package

In her statement, President von der Leyen confirmed that the Commission had recently adopted a proposal for the EU's eleventh sanctions package, with a focus on circumvention and in coordination with G7 partners.

The three key elements of the new package are described as follows:

  • the addition of further advanced "tech products" and aircraft parts to the EU's existing transit ban (to stop the flow of these goods to Russia via third countries);
  • proposals allowing for the sanctioning of the export of particular goods where there is evidence that those goods are moving from the EU to third countries and then on to Russia. It is proposed that this tool will be a last resort, and will be used "cautiously, following a very diligent risk analysis"; and
  • the banning of "shadow entities" from Russia and third countries who are intentionally circumventing EU sanctions.

It is not yet clear when the new proposed measures will come into force, or precisely what form they will take. We will publish a further update when additional details are available.

UK – High Court decision on impact of Russian sanctions on payment obligations

The courts of England and Wales are continuing to see a range of civil litigation cases concerning the impact of the sanctions imposed on Russia since February 2023. In a recent decision, the High Court considered a factual scenario involving a refusal to make payment by the London branch of a European bank which acted as the confirming bank under several letters of credit issued by a Russian bank in relation to leases of aircraft to Russian companies. On the facts of that particular case, the court held that the sanctions imposed by the UK did not suspend the bank's obligation to pay under the letters of credit.

Further detail on these decisions can be found in our separate briefing.

UK issues new guidance on licensing travel expenses

On 12 May, the UK's Office of Financial Sanctions Implementation ("OFSI") published new guidance relating to travel expenses. The guidance is intended to assist potential applications for OFSI licences relating to travel expenses in making their applications and providing sufficient evidence to determine that the relevant expenses are reasonable. Reasonableness is a requirement under certain of the licensing grounds available to OFSI, including in relation to the payment of designated persons' legal expenses and so this guidance will be relevant to, for example, licensing requests in respect of the costs of travel to attend legal proceedings.

The guidance sets out various factors that applicants should consider prior to making an application, and details of the particular travel types and costs which will generally be considered to be reasonable.

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