The European Union ("EU") has formally enacted sanctions against Russia. The EU-Russia sanction regime, having its legal basis in Council Decision 2014/512/CFSP and Council Regulation (EU) No 833/2014 consist of the following main restrictive measures:
- An embargo on the trade, import and export of arms and related material from/to Russia (which covers all items on the EU Common Military List);
- A prohibition to provide, directly or indirectly, technical assistance, financing or financial assistance (e.g. grants, loans, export credit insurance, etc.) related to goods and technology listed in the EU Common Military List, including for any sale, supply, transfer or export of such items, to any person in Russia or for use in Russia;
- A prohibition to sell, supply, transfer or export, directly or indirectly, dual-use items (see latest list in Annex I of the Council Regulation (EC) No 428/2009) to any person in Russia where those items are or may be intended for military use or for a military end-user. This applies also to providing, directly or indirectly, technical assistance, brokering services, financing or financial assistance (e.g. grants, loans, export credit insurance, etc.) related to such dual-use items.
This prohibition does not affect exports of dual-use items, including for aeronautics and for the space industry, for non-military use or for a non-military end-user;
- Any sale, supply, transfer or export of listed energy (oil and gas) related equipment and technology, whether or not originating in the EU, to any person in Russia or any other country is subject to prior authorisation by competent authorities of EU Member States if such equipment or technology is for use in Russia. Export authorisations will not be granted if the concerned equipment and technology are destined for deep water oil exploration and production, Arctic oil exploration and production or shale oil projects in Russia;
- A prohibition to purchase, sell, provide brokering services or assistance in view of transferable securities (e.g. shares, bonds, etc.) and money-market instruments (e.g. treasury bills, certificates of deposit, etc.) with a maturity exceeding 90 days, issued after the entry of this EU-Russia sanction regime by listed (major) state-owned Russian banks, development banks, institutions, their subsidiaries and those acting on their behalf.
The aforementioned prohibitions may not apply (subject to prior authorisation) to obligations arising from a contract concluded before August 1, 2014.
Further, it is of importance to note that it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the above prohibitions, including by acting as a substitute of those listed by the EU-Russia sanction regime.
The EU restrictive measures comprised in Council Decision 2014/512/CFSP and Council Regulation (EU) No 833/2014 will enter into force as of August 1, 2014 and are directly applicable in all EU Member States. The EU restrictive measures apply:
- within the EU territory;
- on board any aircraft or any vessel under the jurisdiction of an EU Member State;
- to any person inside or outside the EU territory who is a national of an EU Member State;
- to any legal person, entity or body, inside or outside the EU territory, which is incorporated or constituted under the law of an EU Member State;
- to any legal person, entity or body in respect of any business done in whole or in part within the EU.
Taking the aforementioned into account, persons falling under the scope of the EU restrictive measures (as depicted above) should take and incorporate adequate internal (compliance) measures and checks in relation to any existing and future contracts, transactions, shipments, dealings and/or agreements with parties in Russia and/or parties in other countries dealing with Russia in order to ascertain that the restrictive measures imposed by the EU against Russia are being fully complied with. It is quite possible that the EU may adopt further wider restrictive measures against Russia and its economy.