Sanctions

generalsanctions

Compliance with sanctions requirements and the related regulations has always been a matter of major importance for serious and reputable businesses.

In light of the latest events in Ukraine and the subsequent avalanche of various new restrictive measures introduced by the EU, US and UK, among others, such compliance has become more challenging than ever.

In addition, Russia itself has introduced various limitations and measures, thereby contributing to a perfect legal storm.

Accordingly, we have dedicated a special team of experts from multiple jurisdictions which is ready to meet the needs of our clients with respect to the complex issues arising out of such a dramatically changing environment.

To this end we have created a centralized e-mail address dedicated specifically to requests regarding the matters above, i.e.: sanctions@peterkapartners.com.

Under this section, we will also publish relevant content aimed at keeping you up-to-date with major developments.

Updates

13

On 18 December 2023, the EU published its latest sanctions package against Russia. Our summary of the main measures introduced by this package is presented below.

Import related restrictions

A ban on the direct or indirect import, purchase or transfer of diamonds from Russia has been introduced. The ban applies to diamonds originating in Russia, diamonds exported from Russia, diamonds transiting Russia, and Russian diamonds when processed in third countries.

The ban on diamonds and products incorporating diamonds exported from Russia or transited via the territory of Russia is applicable as of 1 January 2024. An indirect import ban of Russian diamonds when processed (i.e., cut and/or polished) in third countries, including jewellery incorporating diamonds originating in Russia, will be phased in progressively as of 1 March 2024, and be completed by 1 September 2024.

Technical assistance, brokering services or other services, as well as financing or financial assistance related to diamonds and jewellery as above are also covered by the ban. 

Further restrictions on imports of goods which generate significant revenues for Russia have been introduced, such as pig iron and spiegeleisen, copper wire, aluminium wire, foil, tubes and pipes. Certain exceptions and transitional periods are provided for. A new import ban has been introduced on liquefied propane (LPG) with a 12-month transitional period.

The amendments introduce the possibility for the competent authorities of the Member States to allow the import of goods which are intended for the strict personal use of natural persons travelling to the Union or of their immediate family members, limited to personal effects owned by those individuals and which are manifestly not intended for sale.

Export related restrictions

The new package expands the list of restricted items which contribute to Russia’s military and technological enhancement or to the development of its defence and security sector by adding items which have been used by Russia in its war against Ukraine and items which contribute to the development or production of its military systems, including chemicals, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles, machine tools, and machinery parts.

In addition, there are new export bans on EU industrial goods, aimed at further weakening Russia’s industrial capacities, including machinery and parts, construction-related goods, processed steel, copper and aluminium articles, batteries, and lasers.

The existing prohibition on the provision of services will be extended to cover the provision to the Government of Russia or legal persons, entities or bodies established in Russia of software for the management of enterprises and software for industrial design and manufacture.

Enforcement and anti-circumvention measures

The package contains a requirement for notifications of transfers of funds exceeding 100,000 EUR out of the EU from EU entities directly or indirectly owned for more than 40% by Russian nationals or residents or entities established in Russia. This requirement shall apply as of 1 May 2024. Special reporting provisions are also envisaged for credit and financial institutions that will apply as of 1 July 2024.

The amendments introduce tighter compliance rules to support the implementation of the oil price cap and address circumvention as well as a strengthened information sharing mechanism that should allow better identification of vessels and entities carrying out deceptive practices, such as ship-to-ship transfers used to conceal the origin or destination of cargo and AIS manipulations, while transporting Russian crude oil and petroleum products.

The package further introduces limitations and notification obligations with respect to sales and transfers of tankers for the transport of crude oil or petroleum products.

“No Russia” clause

By virtue of this latest package, when selling, supplying, transferring or exporting to a third country (with the exception of partner countries) sensitive goods and technology under Annexes XI, XX and XXXV to Regulation (EU) No 833/2014, common high priority items, or firearms and ammunition as listed in Annex I to Regulation (EU) No 258/2012, exporters shall be obliged to prohibit contractually re-exportation to Russia and re-exportation for use in Russia. This rule shall be applicable as of March 2024.  In application of the said rule, exporters shall also ensure that the agreement with the third-country counterpart contains adequate remedies in the event of a breach of the contractual obligation.

Individual listings

In addition to economic sanctions, a substantial number of individuals and entities have been added to the lists of personal sanctions.

 

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The information above reflects the status as of 18 December 2023.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

12

The EU has adopted its next sanctions package addressing the Russian invasion of Ukraine. We briefly summarize below the main measures that can be found in this eleventh package.

Further trade restrictions

The sale, supply, transfer or export, to persons in Russia or for use in Russia, of certain goods and which might contribute to Russia’s military and technological enhancement, or the development of its defence and security sector, or suited for use in the Russian aviation or space industry was already banned at an earlier stage.

This new sanctions package, however, also prohibits the transit via the territory of Russia of such goods and technology exported from the EU to third countries. The competent authorities may authorize the transit for certain purposes as per Regulation 833/2014.

The new package expands the list of export restricted items to include various goods such as electronic components, semiconductor materials, optical components, navigational instruments, etc.

An additional annex, Annex XXXV to Regulation 833/2014, has been inserted which contains further types of firearms and other arms whose sale, supply, transfer or export to persons in Russia or for use in Russia is prohibited.

Additional entities have been included in the list of entities directly supporting Russia’s military-industrial complex in its war against Ukraine. They will be subject to tighter export restrictions concerning the dual use goods and technologies.

In view of addressing issues related to circumvention of EU sanctions, the eleventh package introduces the possibility for the Council to take exceptionally and as a last resort measure a decision to restrict the sale, supply, transfer or export of goods and technologies whose export to Russia is already prohibited to third countries whose jurisdiction is demonstrated to be at a continuing and particularly high risk of being used for circumvention. Such measure should be preceded by steps aimed at strengthening the cooperation with the third country concerned and, where appropriate, by individual measures addressing the involvement of the third-country operators in facilitating circumvention. But if, despite the individual sanctions, circumvention remains substantial and systemic, the EU will have the possibility to take the last resort measure described – the respective goods, technologies (and related technical, financial assistance, brokering services, etc.) and the countries concerned will be listed in Annex XXXIII to Regulation 833/2014 which is at present blank.

Transport

As of 24 July 2023, access to ports and locks in the territory of the Union shall be prohibited to any vessel performing ship-to-ship transfers, at any point of the voyage to a Member State’s ports or locks, if the competent authority has reasonable cause to suspect that the vessel is in breach of the ban on importing seaborne Russian crude oil and petroleum products into the EU or that the vessel is transporting Russian crude oil or petroleum products purchased above the price cap agreed by the Price Cap Coalition.

The same ban shall apply to any vessel which the competent authority has reasonable cause to suspect of illegally interfering with, switching off or otherwise disabling its shipborne automatic identification system at any point of the voyage to a Member State’s ports or locks, in breach of SOLAS Regulation V/19 when transporting crude oil or petroleum products subject to the prohibitions set out in Regulation 833/2014.

The package also extends the prohibition to transport goods into the EU by road to trailers and semi-trailers registered in Russia, including when hauled by trucks registered outside of Russia.

Media

In an effort to further limit Russian propaganda and disinformation, the suspension of broadcasting licences has been further expanded to five additional media outlets:  RT Balkan, Oriental Review, Tsargrad, New Eastern Outlook, and Katehon. 

Energy

The derogation granted to Germany and Poland for the supply of crude oil from Russia through the Druzhba oil pipeline ended on 23 June 2023. This would not affect the possibility to continue transit through Russia and import into the EU, via this pipeline, of oil which originates in Kazakhstan or another third country.

Others

A substantial number of individuals and entities have been added to the lists of personal sanctions.

There are also numerous technical amendments in various provisions of the regulation.

 

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The information above reflects the status as of 23 June 2023.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

11

On the sombre occasion of the one-year anniversary of the Russian invasion of Ukraine, the EU has adopted its tenth sanctions package against Russia. Here is a summary of the main measures introduced by this package.

Energy

The package introduces a prohibition on the provision of gas storage capacity, to Russian nationals, natural persons residing in Russia, or entities or bodies established in Russia, as well as to entities owned directly or indirectly or acting on behalf, or at the direction, of such entities or bodies. The mentioned prohibition does not apply to the part of LNG facilities used for storage.

Trade restrictions

The EU has imposed further restrictions on exports of goods which could contribute to the enhancement of Russian industrial capacities. The bans on export are expanded to include, e.g., even more electronics, specialized vehicles, machine parts, spare parts for trucks, and jet engines.

The list of restricted items which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector has also been extended, by adding, among others, rare-earths and compounds, electronic integrated circuits, and thermographic cameras.

The package has further expanded the list of entities supporting Russia’s military and industrial complex directly by additional entities (including for the first time Iranian entities), thereby imposing tighter export restrictions on them.

The transit via the territory of Russia of dual-use goods and technology, firearms, their parts and essential components and ammunition exported from the Union shall also be prohibited by virtue of this new sanctions package.

Imports are also affected, in particular new restrictions have been introduced on goods which generate significant revenues for Russia, e.g., asphalt and synthetic rubber.

Also, in relation to the import prohibitions and with the aim of legal certainty, Regulation 833/2014 has introduced certain customs related rules. In particular, Art. 12e states that goods that are physically in the EU may be released by the customs authorities provided that they have been presented to customs in line with the EU Customs Code before the entry into force or applicability date of the respective import prohibitions, whichever is latest. Release shall not be allowed if there are reasonable grounds to suspect circumvention, and the authorities shall not authorize the re-export of the goods to Russia.

Media

The process for suspending the broadcasting licences of two additional media outlets has been initiated. The media outlets concerned are RT Arabic and Sputnik Arabic. These measures will not prevent the two outlets and their staff from carrying out activities in the EU apart from broadcasting, e.g., research and interviews.

Others

More detailed reporting obligations related to the asset freeze prohibitions have been imposed on economic operators as from 26 April 2023. Natural persons and legal entities should supply, immediately, to the competent authority of the respective Member State any information which would facilitate the implementation of the sanctions, including information on frozen funds/economic resources or the funds/resources owned, held or controlled by listed persons which have not been treated as frozen by the relevant persons obliged to do so or funds/resources owned, held or controlled by listed persons which have been subject to any move, transfer, alteration, use of, access to, or dealing in the two weeks preceding the listing of the relevant natural persons or legal entities.

The package also contains new obligations for persons and bodies to report to the Member States and to the Commission on the assets and reserves of the Central Bank of Russia which they hold or control or are a counterparty to.

Further, as of 27 March 2023, Russian nationals or natural persons residing in Russia shall not be allowed to hold any posts in the governing bodies of the owners or operators of critical infrastructure, European critical infrastructure, and critical entities. This does not apply to nationals of a Member State, of a country member of the European Economic Area, or of Switzerland.

In view of facilitating the divestment from the Russian market by EU operators, a possibility for a derogation has now been introduced from the earlier prohibition on the provision of certain types of services e.g., accounting, auditing, legal advisory, etc. The derogation is temporary and the competent authorities of the Member States should ensure that the services are not provided to the Government of Russia or benefit military end-users or have a military-end use.

In addition to economic sanctions, a substantial number of individuals and entities have been added to the lists of personal sanctions. Among those can be found an additional three banks, i.e., Alfa-Bank, Rosbank, and Tinkoff Bank, as well as the Russian National Wealth Fund and the Russian National Reinsurance Company.

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The information above reflects the status as of 25 February 2023.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

10

The escalation of Russia’s aggression in Ukraine has resulted in the adoption of a further package of EU sanctions. Below is our overview of the main measures contained in this package. 

Energy
The existing prohibition on investments, provision of finance or creation of joint ventures in the Russian energy sector is broadened by including such restrictions also on the mining and quarrying sector defined as the sector covering location, extraction, management and processing activities relating to non-energy producing materials. There are exceptions for specific activities involving certain critical raw materials. 

Export
The list of entities connected to Russia’s military and industrial complex, on which tighter export restrictions apply regarding dual-use goods and technology, as well as goods and technology which might contribute to the technological enhancement of Russia’s defence and security sector, is extended by adding many new entities.

Annex VII to Regulation (EU) No 833/2014 containing the list of restricted items which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector has been replaced and expanded, e.g., by adding further chemical and biological equipment and electronic components.

The export ban covering goods an technology for use in aviation and the space industry has also been expanded to include aircraft engines and their parts. This prohibition will apply to both manned and unmanned aircraft and thus a ban on the direct exports of drone engines to Russia and any third country that could supply drones to Russia is also in place.

Annex XXIII to Regulation (EU) No 833/2014 containing the restricted goods which could contribute to the enhancement of Russian industrial capacities has also been extended, e.g., by including such items as generators, toy drones, laptops, hard drives, IT components, night-vision and radio-navigation equipment and cameras lenses.

Media
Further suspension of the broadcasting licences in the EU of Russian media outlets under the direct or indirect control of the leadership of the Russian Federation and a prohibition against broadcasting their content has been introduced. The additional outlets concerned are NTV/NTV Mir, Rossiya 1, REN TV, and Pervyi Kanal. These measures do not prevent the media outlets and their staff from carrying out activities in the EU other than broadcasting, such as research and interviews.

Banking
The Russian Regional Development Bank has been added to the list of Russian state-owned or controlled entities that are subject to a transaction ban.

Services
The list of services that cannot be provided to the Government of Russia or to legal persons, entities or bodies established in Russia is supplemented by adding market research and public opinion polling services, technical testing and analysis services, and advertising services. Certain derogations apply, e.g., in relation to the termination of existing contracts or for services intended for the exclusive use of companies established in Russia that are owned by or controlled by entities from a Member State, a country member of the European Economic Area, Switzerland, or a partner country as listed in Annex VIII.

Others
In addition to economic sanctions, a substantial number of individuals and entities have been added to the list of personal sanctions.

As of 16 January 2023, the ban on EU nationals from holding posts on the governing bodies in certain Russian entities is broadened to all Russian state-owned or controlled legal persons, entities or bodies that are established in Russia, There are certain opportunities for authorizations to be granted by the competent authorities to their nationals for holding such posts, e.g., in existing joint ventures or similar legal arrangements.

In order to facilitate divestment from the Russian market by EU operators or the winding-down of business activities in Russia, a temporary derogation from the import and export prohibitions contained in Regulation (EU) No 833/2014 is introduced – it is temporary and limited in scope, enabling the sale, supply or transfer of such goods, or their import into the EU, until 30 September 2023, and applies only to those goods that were already physically located in Russia at the time when the relevant prohibitions entered into force.

Certain provisions of Regulation (EU) No 833/2014 have been clarified, e.g., those related to the derogations on the import of crude oil from Russia and the sale of petroleum products obtained from Russian crude oil imported on the basis of such derogations. Further, Hungary, Slovakia, and Bulgaria are now permitted to export to Ukraine certain refined petroleum products obtained from Russian crude oil imported on the basis of the  derogations.

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The information above reflects the status as of 16 December 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

09

The organization of illegal referenda in the parts of Ukraine occupied by Russia and their subsequent annexation urged the EU to adopt its next package of sanctions.

As in previous packages, there are further persons included, for various reasons, in the lists of individually-sanctioned natural persons and legal entities.

In addition, the following sectoral measures from the package can be outlined:

1. Energy
It’s worth recalling that, subject to certain special rules and derogation, the sanctions already covered the purchase, import or transfer of crude oil and certain petroleum products if they originate in Russia or are exported from Russia. Further, the technical assistance, brokering services or financing or financial assistance related to the transport to third countries of crude oil or petroleum products originating in Russia or exported from Russia have also been prohibited.

Now, the new sanctions rules also prohibit the maritime transport of crude oil or petroleum products originating in Russia or exported from Russia to third countries as of the date on which the Council will decide to introduce a price cap on such products.

However, a price cap derogation will apply, i.e., the provision of maritime transport and the related services indicated above will be allowed if the oil or petroleum products are purchased at or below a pre-established price cap.

2. Services
The provision of certain services (accounting, auditing, bookkeeping, tax consulting, business and management consulting, and public relations services) to the Government of Russia or to legal persons, entities or bodies established in Russia was already prohibited at an earlier stage (subject to certain exceptions).

The new package extends the prohibition to the direct or indirect provision of architectural and engineering services, IT consultancy services and legal advisory services to the Government of Russia or to legal persons, entities or bodies established in Russia. “Indirect” here, as per the European Commission’s guidance, should not be meant to prohibit services to subsidiaries of entities established in Russia but should be understood as a ban on services to the benefit of a parent company (or another company) in Russia.

“Architectural and engineering services” includes both architectural and engineering services as well as integrated engineering services, urban planning and landscape architectural services and engineering-related scientific and technical consulting services.

As to IT consultancy services, the notion within Regulation 833/2014 covers consultancy services related to the installation of computer hardware, including assistance services to clients for the installation of computer hardware (i.e., physical equipment) and computer networks, and software implementation services, including all services involving consultancy services on, development of, and implementation of software.

For the purpose of the regulations, legal advisory services cover basically any legal advice to customers in non-contentious matters. It does not include any representation, advice, preparation of documents or verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings.

There are certain derogations from these prohibitions too. Among those, the most important one seems to be the one allowing the provision of the services concerned where these are intended for the exclusive use of entities established in Russia that are owned by or controlled by an entity incorporated or constituted under the law of a Member State of the EU or EEA, Switzerland, USA, UK, Japan, or South Korea.

3. Trade restrictions
The list of controlled goods and technology which may contribute to Russia’s military and technological enhancement or the development of its defence and security sector is further expanded. The list will now include additional chemicals and goods that can be used for capital punishment, torture or other cruel, inhuman or degrading treatment. The sale, supply, transfer or export of additional goods used in the aviation sector will also be restricted.

The new package further introduces a prohibition to sell, supply, transfer or export firearms and their essential components and ammunition as well as related technical assistance, brokering services or other services and financing or financial assistance.

On the import side, the EU extends the import ban on steel products. Further restrictions are introduced on the import of wood pulp and paper, stones and precious metals used in the jewellery industry, certain machinery and chemical items, cigarettes, plastics, and cosmetics.
It’s also worth mentioning that the geographical scope of the restrictions introduced on 23 February, including the import ban on goods from the non-government-controlled areas of the Donetsk and Luhansk oblasts, now also covers the non-controlled areas of Zaporizhzhia and Kherson.

4. Finance and others
With the entry into force of the new package, a full ban on the provision of crypto-asset wallets, accounts or custody services to Russian persons and residents will apply (previously the ban covered only services above the threshold of €10,000).

The new set of sanctions also ban EU nationals from holding any posts on the governing bodies of certain Russian state-owned or controlled legal persons, entities or bodies (those under article 5aa of Regulation 833/2014).

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The information above reflects the status as of 6 October 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

08

The much debated sixth package of sanctions related to the aggression in Ukraine has already been converted into legal acts and published in the Official Journal.
In addition to expanding the lists of individually sanctioned Russian and Belarusian natural persons and legal entities, the package also introduces certain sectoral measures.   

1. Energy

Following long and difficult negotiations, the EU prohibited the purchase, import or transfer (direct or indirect) of crude oil and certain petroleum products (as listed in an Annex) if they originate in Russia or are exported from Russia. Related services such as technical assistance, brokering services, financing, etc., are also prohibited.

The prohibitions shall not apply till 5 December 2022 for certain transactions, and till 5 February 2023 for others. Special rules/derogations are provided for Bulgaria, Croatia, and the Czech Republic.
Furthermore, the prohibitions shall not apply to crude oil falling under CN 2709 00 which is delivered by pipeline from Russia into Member States, until the Council decides otherwise.
Technical assistance, brokering services or financing or financial assistance, related to the transport to third countries of crude oil or petroleum products, as per an annex, which originate in Russia or which have been exported from Russia, is also prohibited.

2. Finance

Already since March 2022 a prohibition has been introduced on the provision of specialized financial messaging services, which are used to exchange financial data (SWIFT) to seven Russian banks and two Belarussian banks.
The prohibition is now extended to cover an additional three Russian banks i.e., Sberbank, Credit Bank of Moscow, and the Russian Agricultural Bank, as well as the Belarusian Bank for Development and Reconstruction.

3. Consulting services

The new package also introduces a prohibition on providing, directly or indirectly, accounting, auditing, bookkeeping or tax consulting services, or business and management consulting or public relations services to the Government of Russia or to legal persons, entities or bodies established in Russia.
The prohibition shall not apply to the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy. It will also not apply to services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State.

4. Trade restrictions

The list of controlled goods and technology which may contribute to Russia’s military and technological enhancement or the development of its defence and security sector has been expanded. These are mostly chemically defined compounds.

The list of goods which generate significant revenues for Russia and are respectively subject to an import prohibition has also been updated.

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The information above reflects the status as of 3 June 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

07

Belarus is continuing to adopt certain new measures in response to the introduction of restrictive measures by foreign countries.

1. New restrictions on the export of certain types of food products

The Resolution of the Council of Ministers No.224 as of 12 April 2022 was adopted in order to protect the internal market due to the increased demand in the border areas for groceries, which individuals purchase in commercial quantities for export outside the Republic of Belarus.

According to the Resolution, certain basic products such as salt, sugar, flour, pasta, etc., can be exported outside the EAEU only in very limited quantities.

The restriction does not apply to goods purchased in duty-free shops located at checkpoints on the national border.

2. Restrictive measures for cargo vehicles registered in the EU

From 16 April 2022, a ban on the entry into the territory of Belarus of cargo vehicles (trucks and tractors) registered in the European Union is introduced. The exception is crossing the national border through certain checkpoints to specially established places for carrying out cargo operations and transfers as follows:

Place for carrying out cargo operations and transfers

Checkpoint

Customs clearance point Brest-Beltamozhservice

Kozlovichi

Customs clearance point Brest-Beltamozhservice-2

Customs clearance point Berestovitsa-TLC

Berestovitsa

Waiting area of the electronic queuing system for vehicles to enter the Berestovitsa checkpoint (only transfer operations)

Customs clearance point Bruzgi-TLC

Bruzgi
Privalka
Berestovitsa

Waiting area of the electronic queuing system for vehicles to enter the Bruzgi checkpoint (only transfer operations)

Bruzgi

Customs clearance point Grodno-GAP-2

Privalka

Customs clearance point Lida-auto

Benyakoni

Waiting area of the electronic queuing system for vehicles to enter the Benyakoni checkpoint (only transfer operations)

Customs clearance point Kamenny Log-Beltamozhservice

Kamenny Log
Kotlovka
Vidzy

Waiting area of the electronic queuing system for vehicles to enter the Kotlovka checkpoint (only transfer operations)

Kotlovka

Waiting area for an electronic queuing system for vehicles to enter the Grigorovshchina checkpoint (only transfer operations)

Grigorovshchina

Waiting area for the electronic queuing system for vehicles to enter the Urbany checkpoint (only transfer operations)

Urbany
Vidzy

Customs clearance point Polotsk-Steklovolokno

Grigorovshchina
Urbany
Vidzy

Vehicles registered in the EU, carrying postal items, live animals, oversized, and humanitarian cargo, are allowed to move through the territory of Belarus without restrictions.

This restriction does not apply until 23 April 2022 to cargo vehicles registered in the EU that entered the territory of Belarus before 16 April 2022.

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The information above reflects the status as of 16 April 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

06

The next set of restrictive EU measures following the Russian invasion of Ukraine has already been put into effect. Most of the measures refer to Russia but there are additional restrictions on Belarus as well.

Here is our view of the main measures contained in this fifth sanctions package.

1. Energy

While the import of oil and natural gas from Russia has not been banned at this stage, the new rules prohibit the purchase, import, or transfer, directly or indirectly, of coal and other solid fossil fuels if they originate in Russia or are exported from Russia. The related assistance and services are also prohibited.

The prohibitions do not apply to the execution until 10 August 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.

2. Transport

  • No access to EU ports for vessels registered under the flag of Russia

After 16 April 2022, it is prohibited to provide access to ports in the territory of the Union to any vessel registered under the flag of Russia. This includes vessels that have changed the flag of Russia or their registration to the flag or register of any other State after 24 February 2022.

Exceptions are possible for certain products, e.g., agricultural and food products, humanitarian aid as well as for natural gas and oil, including refined petroleum products, titanium, aluminium, copper, nickel, palladium, iron ore, and certain chemical and iron products.

  • Ban on Russian and Belarusian road transport

The package includes a prohibition on any road transport undertaking established in Russia and Belarus to transport goods by road within the territory of the EU, including in transit. This prohibition does not apply to road transport undertakings transporting mail as a universal service.

Exceptions are possible for a number of products, such as pharmaceutical, medical, agricultural and food products, including wheat, and for road transport for humanitarian purposes as well as for natural gas and oil, including refined petroleum products, titanium, aluminium, copper, nickel, palladium, and iron ore.

3. Trade restrictions

Further trade restrictions are imposed both in terms of import to, and export from, Russia.

  • Import

The new rules prohibit the purchase, import, or transfer, directly or indirectly, of goods which generate significant revenues for Russia if they originate in Russia or are exported from Russia.

The respective goods are listed in Annex XXI to Regulation 833/2014 and, among others, these include certain foods, cement, glass, aluminium, furniture, fertilizers, tires, wood, paper, silver, lead, and alcohol.

Assistance and services related to such transactions are also prohibited.

The prohibitions shall not apply to the execution until 10 July 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.

  • Export

The sanctions further prohibit the sale, supply, transfer or export, directly or indirectly, to any natural or legal person, entity or body in Russia or for use in Russia of goods which could contribute to the enhancement of Russian industrial capacities.

The relevant products are listed in Annex XXIII; the range is very wide and it covers, e.g., textile products, rubber, paints, bricks, blocks, tiles, paper, rail locomotives, road tractors, trucks, furniture, accumulators, transformers, valves, tools, engines, motors, elevators, various other machines and machinery, etc.

Assistance and services related to such transactions are also prohibited.

As with the import restrictions above, the prohibitions do not apply to the execution until 10 July 2022 of contracts concluded before 9 April 2022 or ancillary contracts necessary for the execution of such contracts.

4. Public tenders and concessions

A completely new measure taken by the EU in the course of the crisis is the prohibition of awarding or continuing the execution of any public or concession contract to or with Russian nationals or legal persons, entities or bodies established in Russia and related persons/persons acting on behalf or at the direction of such persons, entities or bodies.

It’s worth noting that this applies in cases where the persons/entities above account for more than 10% of the contract value, subcontractors, or suppliers or entities whose capacities are being relied on.

The prohibitions do not apply to the execution until 10 October 2022 of contracts concluded before 9 April 2022.

Exceptions may be granted by the Member States in certain areas, e.g., the civil nuclear sector, cooperation in space programmes, as well as the purchase, import or transport of natural gas and oil, including refined petroleum products, and titanium, aluminium, copper, nickel, palladium and iron ore, from, or through, Russia into the EU.

5. Finance

  • Freezing of assets of four Russian banks

The EU broadened the list of companies and individuals subject to an assets freeze and a prohibition on making funds and economic resources available.

It’s interesting to note that the list now includes four Russian banks, i.e., Otkritie FC Bank, Novikombank, Sovcombank, and VTB Bank.

  • Public funding

The package introduces a prohibition on the provision of support, including financing and financial assistance or any other benefit, from a Union, Euratom or Member State programme to Russian publicly owned or controlled entities. Certain exceptions apply.

  • Further prohibitions on banknotes and transferrable securities

While such a measure has already been in place with respect to euro-denominated banknotes and transferable securities, the sanctions now also prohibit the export of banknotes and the sale of transferrable securities denominated in all official currencies of the Member States to Russia and Belarus, or to any natural or legal person, entity or body in Russia and Belarus.

  • Crypto-wallets, account and custody services

Article 5b of Regulation 833/2014 has been revised with the main novelty being the prohibition of the provision of crypto wallet, account or custody services to Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies established in Russia, if the total value of crypto-assets of the natural or legal person, entity or body per wallet, account or custody provider exceeds EUR 10,000. The rules for possible exceptions in other provisions of the regulation have been adjusted accordingly. 


***
The information above reflects the status as of 8 April 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

 

05

Further to the restrictions introduced earlier this year, Belarus has recently adopted certain new measures.

1. List of Unfriendly Foreign Countries

Such list had to be adopted by the Council of Ministers in accordance with the Decree of the President of the Republic of Belarus of 14 March 2022 containing measures aimed at ensuring the stable functioning of the economy.

The list was fixed by the Resolution of the Council of Ministers No.209 as of 6 April 2022, and it includes the Member States of the EU as well as Albania, Australia, Canada, Iceland, Liechtenstein, Montenegro, New Zealand, North Macedonia, Norway, Switzerland, the United Kingdom, and the USA.

2. Suspension of enforcement proceedings

On 7 April 2022, the President signed Decree No.137 "On enforcement documents", which provides for the suspension of enforcement proceeding in favour of residents of Unfriendly Foreign Countries.

Accordingly, banks and other financial organizations are obliged to reject payment claims submitted by such residents under enforcement documents without the payer's consent.

The Decree does not contain provisions on the prohibition of initiating enforcement proceedings, that is, the claimant can still file an application. Then the bailiff must initiate enforcement proceedings (which will allow the claimant to be fixed in the queue of enforcement proceeding for the future) and immediately suspend them as required by the Decree.

At the same time, the Decree does not prohibit the voluntary fulfilment of obligations of residents of the Republic of Belarus to non-residents, including those from Unfriendly Foreign Countries.

***
The information above reflects the status as of 7 April 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

 

04

In order to ensure the stable functioning of its economy in response to the introduction by foreign countries of restrictive measures, the Republic of Belarus has introduced a number of measures. Below, we present the key measures.

1. Measures aimed at ensuring the stable functioning of the Belarusian economy

The restrictive measures against unfriendly countries were established by Decree of the President of the Republic of Belarus dated 14 March 2022 No. 93 "On additional measures to ensure the stable functioning of the economy".

A list of unfriendly foreign countries will be determined by the Council of Ministers. As of yet, such a list has not been prepared.

When countries impose restrictive measures, including the actual “freezing” of investment projects being implemented in the territory of the Republic of Belarus, suspend financing, and make it technically impossible to pay public debts in a foreign currency, the Ministry of Finance, banks, and other legal entities by decision of the Council of Ministers (its Presidium) are provided with the right to ensure the fulfilment of obligations to such countries in the Belarusian national currency.

The Council of Ministers (its Presidium) has the right to impose a fee for early termination of contracts (credit, lease, etc.) initiated by foreign organizations or citizens from countries that have decided to impose restrictive measures on Belarusian legal entities and individuals.

In order to prevent the withdrawal of capital, shareholders of legal entities that are residents of unfriendly foreign countries cannot sell their shares in the authorized capital of legal entities.

As a response to the actions of such countries, the Council of Ministers (its Presidium) also has the right to suspend the implementation of international conventions for the avoidance of double taxation concluded between the Republic of Belarus and those countries.

2. Restrictions on import

Temporary embargo on food products from the EU, USA, Canada, Albania, the United Kingdom, Iceland, Macedonia, Norway, Montenegro, Liechtenstein, Serbia, and Switzerland.

From 1 January 2022, the Republic of Belarus has temporarily restricted the import of the following food products for a period of six months (until 1 July 2022):

  • cattle meat;
  • pork;
  • salted, dried or smoked meat;
  • milk and dairy products, with the exception of lactose-free milk;
  • fruits, vegetables and nuts;
  • sausages and similar products;
  • confectionery, including chocolate;
  • salt.

The ban does not apply to goods that will be imported for personal use. Also, the ban does not apply to goods that were imported into Belarus before the entry into force of the Resolution.

In order to ensure the protection of the national interests of the Republic of Belarus, Resolution of the Council of Ministers No. 240 dated 23 April 2021 introduced a ban on the import into the territory of the Republic of Belarus and the sale on its territory of the following goods:

1) perfumery, "BEIERSDORF" cosmetics (trademarks "NIVEA", "FLORENA", etc.);
2) "SKODA AUTO" passenger cars;
3) "LIQUI MOLY" chemical and petrochemical products.

The ban will be valid until 4 May 2022.

3. Restrictions on export

According to the Resolution of the Council of Ministers No. 125 dated 11 March 2022, it is prohibited to export cereals, seeds and grains (rye, barley, oats, corn, wheat, millet) to the EAEU, and to export them to third countries. The Resolution of the Council of Ministers No. 145 dated 19 March 2022 added grain products for animal feed and protein raw materials for the feed industry to the export ban list. The restrictions will be valid for the period of 6 months.

The Resolution of the Council of Ministers No. 137 dated 13 March 2022 introduced a temporary ban on the export of buckwheat (cereals, grains, food products) and wheat flour until June 16, 2022.

The Resolution of the Council of Ministers No. 147 dated 19 March 2022 relates to a ban on the export of certain industrial goods – 254 categories. The list includes a wide variety of products: plaster, materials for filling teeth, glasses, disinfectants, tights and stockings for people with varicose veins, steam boilers and boilers for central heating, pumps, compressors and fans, bulldozers and agricultural machines, railway and tram cars, milking machines, some production equipment and measuring instruments, sewing machines, vacuum cleaners, electric shavers, smartphones, video and audio recording equipment, etc. The restrictions will be valid for a period of 6 months.

There are some exceptions to these prohibitions. Such products can be exported for the provision of humanitarian assistance, as well as within the framework of international transit traffic.

A number of goods (products) can be exported only if there is a permit (licence) issued by an authorized body – the Ministry of Antimonopoly Regulation and Trade of the Republic of Belarus:

- pipe products – until 1 April 2022
- recycled paper or cardboard (waste paper) – until 5 July 2022
- apples, onions and cabbage – until 7 May 2022
- sugar – until 18 August 2022

***
The information above reflects the status as of 22 March 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

 

03

The EU is continuing to ramp up the sanctions pressure on the Russian economy, and new measures have been taken by the Council effective as of 16 March 2022. 

We outline the main new restrictions below.

1. Energy Sector

  • Prohibition on new investments in the Russian energy sector

The measure prohibits the:

acquisition or extension of existing participation in
arrangements to provide financing, including equity capital, to
creation of any new joint venture with

persons or bodies from Russia or any third country operating in the energy sector in Russia as well as the provision of investment services related to the above.

By way of derogation from the said rule, the competent authorities may authorize any activity referred to above in exceptional cases, e.g., if it is necessary for ensuring critical energy supply within the Union.

  • Export restriction on equipment, technology and services for the energy industry

Furthermore, the approach existing before this last package on measures for prior authorization of sale, supply, transfer or export of equipment and technology for the energy industry in Russia has been replaced with a prohibition of such transactions and related services.

There are certain exceptions from this ban. Among them it is worth mentioning that the prohibition does not apply to goods or technology, or to the provision of technical or financial assistance, necessary for the transport of fossil fuels, in particular coal, oil and natural gas, from or through Russia into the EU. The prohibition also does not apply to the execution until 17 September 2022 of an obligation arising from a contract concluded before 16 March 2022.

“Energy sector” within the meaning of the regulation does not cover civil nuclear related activities.

2. Further trade restrictions 

  • Iron and steel

Import, purchasing and transport of iron and steel products, listed in an annex, that originate or are exported from Russia are prohibited.

Related technical assistance, brokering services, financing or financial assistance, including financial derivatives, as well as insurance and re-insurance are also prohibited.

Execution until 17 June 2022 of contracts concluded before 16 March 2022, or ancillary contracts necessary for the execution of such contracts are not affected.

  • Luxury goods

The new package also bans the sale, supply, transfer or export of luxury goods, listed in an annex to the regulation, to any person or body in Russia or for use in Russia.

As a rule, this applies to goods with a value exceeding EUR 300 per item.

The list of products concerned is long and includes horses, caviar, cosmetics, clothes, leather products, carpets, jewellery, vehicles (exceeding EUR 50,000 each), works of art, etc.

3. Prohibition of all transactions with certain entities

The new package bans any new transaction with particular persons or bodies established in Russia that are publicly owned or related to Russia, its Government or Central Bank as well as persons or bodies established outside the EU and owned by the listed persons. Persons or bodies acting on behalf or at the direction of the entities referred to in the preceding sentence are also covered by the ban.

The execution until 15 May 2022 of contracts concluded before 16 March 2022 or ancillary contracts necessary for the execution of such contracts are not affected by the ban. Further exceptions apply to the purchase, import or transport of fossil fuels and certain raw materials to the EU.

***
The information above reflects the status as of 16 March 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

02

Following the introduction of various sanctions by EU, US, UK etc., the Russian Federation has enacted a number of measures affecting both Russian residents and foreign businesses. We are present below some of the main ones.

List of Unfriendly States established by Government Decree as of March 5, 2022 No. 430-r

The List of Unfriendly States includes the member states of the EU, as well as Australia, Albania, Andorra, the United Kingdom (including Jersey, Anguilla, the British Virgin Islands and Gibraltar), Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, the Republic of Korea, San Marino, North Macedonia, Singapore, the USA, Taiwan, Ukraine, Montenegro, Switzerland, and Japan.

Restrictions on payments in foreign currency instructed by Order of the President of the Russian Federation as of March 5, 2022 N 95 "On the temporary procedure for the fulfilment of obligations to certain foreign creditors" (“Order No. 95”).

A temporary procedure was introduced for the fulfilment of payment obligations by Russian residents, as well as the Russian Federation. It affects obligations from loans and borrowings, and financial instruments to foreign creditors from Unfriendly States (with the exception of those registered in the Russian Federation).

Restrictions:

  • Relates only to loans and borrowings, and financial instruments;
  • Only affects obligations of Russian residents in excess of 10 million rubles per calendar month (or foreign-currency equivalent);
  • Russian residents have the right to fulfil their obligations by transferring Russian rubles to special ruble “C” accounts opened in the name of a foreign creditor in a Russian bank. The procedure for opening such accounts will be determined by a decision of the Central Bank;
  • Payments in foreign currency are possible only on the basis of a special permit.

Restrictions do not apply to foreign creditors from Unfriendly States which are:

  • under the control of Russian legal entities or individuals (end beneficiaries are the Russian Federation, Russian legal entities or individuals), including if this control is exercised through foreign legal persons associated with such foreign states; and
  • information on control over them is disclosed by Russian legal entities or individuals by the persons mentioned above, to the tax authorities of the Russian Federation in accordance with requirements of the legislation of the Russian Federation.

Residents and other states which have not joined the sanctions

On one hand, Order No. 95 applies exclusively to the debts owed to creditors from Unfriendly States (and creditors controlled by persons from such countries), and also for debts that were assigned to such creditors from Unfriendly States (non-residents). On the other hand, according to the Clarifications of the Central Bank, creditors who are residents of states that have not joined the sanctions shall also receive payments in rubles at the exchange rate at the time of payment. Whether these clarifications mean that Order No. 95 covers residents of countries that have not joined the sanctions is not clear at the moment.

Ban and restrictions on the export of certain products and raw materials from the Russian Federation introduced by Order of the President of the Russian Federation No. 100 dated March 8, 2022 "On the Application of Special Economic Measures in the Sphere of Foreign Economic Activity for the Purpose of Ensuring the Security of the Russian Federation" and following Government Decree as of 9 March 2022 No. 311, 312, 313, following Government Decree as of March 6, 2022 No. 302

The list includes technological, telecommunications, medical equipment, vehicles, agricultural machinery, electrical equipment – more than 200 items in total, including railway cars and locomotives, containers, turbines, metal and stone processing machines, monitors, projectors, consoles, and panels.

The export of these goods is temporarily restricted to all foreign countries, with the exception of the member states of the EAEU, Abkhazia, and South Ossetia. In relation to the latter, a permitting procedure for export will apply, providing that permits for the export of goods to the EAEU countries, Abkhazia, and South Ossetia will be issued by the Ministry of Agriculture, the Ministry of Transport, the Ministry of Industry and Trade, the Ministry of Digital Development, and the Ministry of Natural Resources.

In addition, the Government Decree temporarily restricted the export of certain types of timber from Russia. It is banned in states that have committed “Unfriendly Actions”, according to the approved list.
Among other things, Russia has introduced a temporary ban on the export of foreign medical devices from the country, i.e., medical devices that were delivered from states that joined the sanctions and are now in the warehouses of importers or are undergoing customs procedures.

Additionally, the Government of the Russian Federation determined a list of goods and equipment previously imported into Russia from abroad, which are temporarily prohibited from being exported from the country until the end of 2022.

A procedure for certain previously frozen transactions with foreign counterparties is established by Decree of the Government of the Russian Federation No. 295 dated 06.03.2022 "On Approval of the Rules for Issuing Permits by the Government Commission for Control over Foreign Investments in the Russian Federation for the Transactions Conducted by Residents with Foreign Persons in order to Implement Additional Temporary Economic Measures for ensuring the financial stability of the Russian Federation and amending the Regulations on the Government Commission for Control over Foreign Investments in the Russian Federation" Government Decree as of March 6, 2022 No. 431-r

As mentioned in a previous Legal Alert, on 1 March 2022, the Russian President signed Order No. 81, which stipulates the need to obtain permission from the Government Commission for Control of Foreign Investment in Russia (the “Commission”) for certain transactions and operations between Russian residents and residents of Unfriendly States. Such transactions include, inter alia, provision of loans and credits, and transactions related to transfer of ownership to securities and real estate.

On 6 March 2022, the Russian Government defined the procedure for issuing approvals for the above transactions.

An application for permission to conduct a transaction or a group of transactions is sent to the Russian Ministry of Finance by the Russian party to the transaction or by residents of Unfriendly States. The application shall contain, in particular, information on the purpose, subject matter, content and essential conditions of the transaction (operation), on the planned validity period of such permission, and other information.

The application must be accompanied by a document confirming the state registration of the applicant; constituent documents of the applicant – a legal entity; a document containing information about beneficiaries, beneficial owners, a person exercising control over a person of a foreign state who is a party to the transaction (participating in the transaction); balance sheet of the resident as of the last reporting date and other documents. The application and documents are drawn up in Russian. If the original documents are in a foreign language, they are submitted with a certified translation (with an apostille of the competent authority of the state in which this document was drawn up). A description of the submitted documents is attached to the application. The application and documents may be submitted on paper or in an electronic form, including in the form of electronic documents signed using an electronic digital signature.

The Russian Government does not specify the timeframe for reviewing an application. If the application is processed with a positive outcome and the authorization is issued, the Commission has the right to determine the conditions of the transaction and/or the period of validity of the authorization at its own discretion.

Dividend payments provided by Instruction of the Central Bank No. 018-34-3/1202 dated February 28, 2022

According to an instruction of the Central Bank, it is prohibited to “transfer payments” on securities to any foreign legal entities and individuals. This applies to payments such as dividends and interest on bonds. It is not yet entirely clear whether this applies to income from the sale of shares. Apparently, this rule should not apply to LLCs.

Temporary ban on the export of grain to the EAEU, as well as on the export of white sugar and raw cane sugar to third countries by Decree of the Government of the Russian Federation Nos. 361, 362 dated 14.03.2022
Russia introduced a temporary ban on the export of grain to the EAEU, as well as on the export of white sugar and raw cane sugar to third countries. Restrictions on grain will be valid until June 30, and on sugar until August 31, 2022.

The grain ban applies to wheat and meslin, rye, barley, and corn.

There are a number of exceptions for the export of sugar and grain. Thus, the supply of these products outside of Russia will be possible, including for the provision of humanitarian assistance, as well as within the framework of international transit traffic.

***
The information above reflects the status as of 15 March 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

01

Since 2014, the crisis in Ukraine has triggered the EU to introduce various restrictive measures (sanctions) on Russia and Russian owned/controlled entities.

By the end of 2021, the main restrictions can be summarized in a simplified manner as follows:

  • prohibition of import and export of arms and related material from/to Russia and related services;
  • ban on exports of dual use goods and technology for military use in Russia or to Russian military end users and to specified persons, entities or bodies as well as related services;
  • limitations on certain financial instruments issued by publicly owned/controlled Russian credit institutions and their subsidiaries outside the EU, military and energy companies as well as new loans or credits to such entities;
  • export of certain energy-related equipment and technology to Russia requires prior authorization, and certain related services are prohibited;
  • travel restrictions and freezing of assets of individuals and legal entities or bodies as well as a prohibition on making directly or indirectly funds or economic resources available to or for the benefit of such persons.

Sanctions on Belarus or Belarusian owned/controlled entities have also existed for years, though before 2022 they have not been linked to Ukraine. Some of them are similar to the ones above, e.g., restrictions on the trade of arms, dual-use items and access to capital markets, but there are also country specific sanctions such as:

  • prohibition of sale, supply, transfer or export of equipment, technology or software intended primarily for use in the monitoring or interception by, or on behalf of, the Belarusian authorities of the internet and of telephone communications on mobile or fixed networks;
  • restrictions concerning petroleum products, potassium chloride (“potash”) and goods used for the production or manufacturing of tobacco products;
  • certain prohibitions on the European Investment Bank in relation to projects in the public sector.

 
DEVELOPMENTS IN 2022

We outline below the main newly introduced sanctions.

1. Finance

The longest list of new measures adopted shortly before and after the Russian invasion of Ukraine, and arguably the heaviest ones, relate to the financial sector.

  • Prohibition to finance the Russian Federation and its government and prohibition of transactions with the Russian and Belarusian Central Banks

It is now prohibited to purchase or sell directly or indirectly or otherwise deal with transferable securities and money-market instruments issued after 9 March 2022 by Russia and its Government, the Russian Central Bank or persons/entities/bodies acting on their behalf or at their direction. The same is true for any new loans or credit arrangements after 23 February 2022. Drawdowns or disbursements made under a loan or a credit contract concluded before 23 February 2022 are not covered under certain conditions.

With respect both to the Russian and the Belarusian Central Banks, the EU also banned any transactions related to the management of reserves and assets, including transactions with any person, entity or body acting on behalf of or at the direction of the banks.

  • SWIFT

As of 12 March 2022, it is not allowed to provide specialized financial messaging services, which are used to exchange financial data to seven Russian banks, i.e., Bank Otkritie, Novikombank, Promsvyazbank, Rossiya Bank, Sovcombank, Vnesheconombank (VEB), and VTB Bank and to any legal entity or body established in Russia directly or indirectly owned by more than 50 % by the said banks.

The same restriction applies as of 20 March 2022 to three Belarusian banks, namely Belagroprombank, Bank Dabrabyt, and the Development Bank of the Republic of Belarus, as well as their Belarusian subsidiaries.

  • Expansion of financial restrictions on other credit institutions and persons

The access to capital markets and financing through new loans or credits has been further limited to include prohibitions on additional institutions and entities and new measures.

As of 12 April 2022, the listing and provision of services on EU trading venues for the transferable securities of any legal entity or body established in Russia or Belarus and with over 50% public ownership is also prohibited.

On a related note, the notion of “transferable securities” has also been clarified so as to include crypto-assets, and thus ensure the proper implementation of the related restrictions.

  • Public financing or financial assistance for trade with, or investment in Russia and Belarus

It is prohibited to provide public financing or financial assistance for trade with, or investment in, Russia or Belarus.

There are a few exceptions to this rule among which are the provision of public financing or financial assistance up to the total value of EUR 10,000,000 per project benefiting small and medium-sized enterprises established in the Union.

  • Financial inflows from Russia and Belarus to the EU

New measures have been introduced which prohibit the acceptance of deposits exceeding the total value EUR 100,000 from Russian or Belarusian nationals or residents or legal entities or bodies established in Russia or Belarus. This does not apply to deposits which are necessary for non-prohibited cross-border trade in goods and services between the EU and Russia, respectively the EU and Belarus.

Further, the provision of services by the EU central securities depositories, as well as the selling of euro-denominated transferable securities issued after 12 April 2022 or units in collective investment undertakings providing exposure to such securities to Russian or Belarusian nationals or residents or any legal entity or body established in Russia or Belarus is also prohibited.

  • Euro banknotes

It is also prohibited to sell, supply, transfer or export euro denominated banknotes to Russia or Belarus or to any natural person or legal entity or body in Russia or Belarus, including the government and central banks of both countries or for use in Russia or Belarus.

This does not apply where necessary for the personal use of natural persons travelling to Russia or Belarus or members of their immediate families travelling with them or the official purposes of diplomatic missions, consular posts or international organizations in Russia or Belarus enjoying immunities in accordance with international law.

2. Other sectoral sanctions

  • Technology

Further restrictions are introduced on exports of dual-use goods and technology and related services. Restrictions are also imposed on exports of certain goods and technology which might contribute to Russia’s or Belarus’s military and technological enhancement or the development of the defence and security sector. The latter covers a wide range of equipment and technology, including computers and other electronics, telecommunications equipment and technology, information security, sensors and lasers, etc. Related technical assistance and other services are also prohibited.

  • Transport

Export of goods and technology to Russia in the aviation and space industry is also banned as is the provision of technical and financial assistance, insurance and reinsurance and maintenance services related to those goods and technology.

  • Energy

Additional sanctions cover the sale, supply, transfer or export to Russia of specific goods and technologies in oil refining and related services.

  • Maritime navigation

This is the latest addition to the list of sectors in Russia covered by sanctions. Thus, the sale, supply, transfer or export of maritime navigation goods and technology to any person, entity or body in Russia, for use in Russia, or for the placing on board of a Russian-flagged vessel is prohibited. Related services are also prohibited.

  • Other sectoral sanctions on Belarus

Further restrictions are introduced on the trade of goods used for the production or manufacturing of tobacco products, mineral products and potassium chloride (“potash”) products and related services.

In addition, import, purchase, transport of wood products, cement products, iron and steel products and rubber products from Belarus as well as related services are also prohibited. The prohibitions shall be without prejudice to the execution until 4 June 2022 of contracts concluded before 2 March 2022.

3. Expansion of lists of sanctioned persons

The lists of individuals and entities sanctioned by travel restrictions,  asset freezes, and prohibitions on making directly or indirectly funds or economic resources available to or for the benefit of such persons have been supplemented several times.

***

The information above reflects the status as of 11 March 2022.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.

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Website of PETERKA & PARTNERS law firm Ltd.
Trg Nikole Zrinskog 16, Zagreb, tel. contact: +385 994585181 / haramija@peterkapartners.hr
PIN: 61481916494, registered in Commercial Register of Commercial Court in Zagreb under MBS: 081482808,
director: Ondřej Peterka,
shared capital: HRK 350 000,00 / EUR 46 452,98 (fixed conversation rate 7,53450; paid in full),
IBAN: HR3523600001103046783, opened at Zagrebačka banka d.d., Zagreb, Trg bana Josipa Jelačića 10
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