On 6 June 2019, OFSI published guidance (available here) on the financial sanctions regime against Russia, which would apply if the UK leaves the EU without a deal and would be implemented through the Russia (Sanctions)(EU Exit) Regulations 2019 (the “Regulations”). The Regulations follow the the existing EU sanctions regime by imposing asset freezes in relation to designated persons, payment processing restrictions, financial services and investment restrictions, prohibitions on loan and credit arrangements and restrictions on Crimea-related investments.
On 21 May 2019, the Belgian Act of 2 May 2019 including various financial provisions was published in the Belgian Official Gazette.
The aforementioned act contains a Title VII, implementing the EU Blocking Regulation 2271/96 in Belgium.
Under the EU Blocking Regulation, the EU operators are in principle prohibited to comply with the (U.S. Iran – Cuba) sanctions, as specified in its annex. They can, however, be authorised to comply with the sanctions to the extent that non compliance would seriously damage their interests or those of the European Community. The EU’s aim is to limit the extra-territorial impact of the respective sanctions. The Blocking Regulation also provides protection to EU persons and entities by (i) not acknowledging and enforcing any foreign judgement against an EU person or entity giving effect to the respective sanctions and (ii) giving a right to recover for the damages suffered as a result of the sanctions.
Besides appointing the competent authorities in relation to the reporting obligation under the Blocking regulation (i.e. the Belgian Federal Public Service for Foreign affairs) and for monitoring compliance with the provisions of the Blocking Regulation (i.e. the Belgian Federal Public Services for Finance and for the Economy), the newly adopted act furthermore provides that the relevant Minister (of Finance or Economy) may now impose administrative fines for such non-compliance.
For legal entities, an administrative fine of up to 10% of the entity’s annual net turnover of the previous business year can be imposed. For individuals, the fine can amount up to 5,000,000 euro. The actual amount of the administrative fine is to be determined taking into account all relevant circumstances, and in particular: the seriousness and duration of the infringements; the degree of responsibility of the person concerned; the financial capacity of the person concerned, as evidenced in particular by the total turnover of the legal entity concerned, or by the annual income of the natural person concerned; the benefit or profit that the violations may yield for the person concerned, insofar as these can be determined; the prejudice that third parties may have suffered as a result of these infringements, insofar as this can be determined; the degree of cooperation of the person concerned with the supervisory authorities; any previous infringements committed by the person concerned.
In addition to the already existing criminal sanctions, the act of 2 May 2019 furthermore provides for administrative fines for non-compliance with EU sanctions regulations that are taken within the framework of Articles 75, 215 and 352 of the Treaty on the Functioning of the European Union, by amending the Belgian Act of 13 May 2003 on the implementation of restrictive measures taken by the Council of the European Union against States, certain persons and entities.). The administrative fines range from 250 euro to 2,500,000 euro.
Title VIII of the act of 2 May 2019 also provides that the freezing measures concerning funds and economic resources included in the sanctions lists drawn up or updated by the United Nations Security Council or by the relevant Sanctions Committees under Chapter VII of the Charter of the United Nations will be implemented as from the time when they are adopted by the United Nations Security Council or those Sanctions Committees. This in contrast to the situation in the past, where under the Belgian Act of 11 May 1995 on the Enforcement of Decisions of the Security Council of the United Nations Organisation it was up to the Minister of Finance, after consultation with the competent judicial authorities, to decide to freeze all or part of the funds and other financial resources of the persons, entities and groups referred to in the Resolution.
Non-compliance is punishable with imprisonment from eight days to five years and a fine up to 8 million euro (for individuals) or with a fine up to 16 million euro (for legal entities). These sanctions can even be higher in case of a repeated offence.
Russia has introduced additional sanctions against Ukraine, including banning the export of oil and oil products.
Governmental Resolution No. 460-25, adopted on 18 April 2019 with immediate effect, sets out the following new Russian sanctions on Ukraine:
- Further extends the list of banned imports introduced by Resolution No. 1716-83. The list, which initially included agricultural products, raw materials, food products, industrial goods and certain personal hygiene products, now also covers certain engineering products, light industry goods and metalwork products listed according to their names and HS classification codes.
- These goods are prohibited from entering Russia if they (i) originate from Ukraine, (ii) are supplied from Ukraine, or (iii) have been in transit through the territory of Ukraine.
- Lists products that can not be exported from Russia to Ukraine. The list covers oil, oil products and other goods identified by their names and HS classification codes.
- Introduces a list of products that, starting from June 1, 2019, can not be exported from Russia to Ukraine without permission from the Russian Ministry of Economic Development. The list includes certain fuel and energy products specified in accordance with their names and HS classification codes.
According to the Russian Prime Minister, Resolution No. 460-25 was adopted in response to Ukraine’s recent decision to expand its own list of products the importation of which from Russia to Ukraine is prohibited.
On 4 March 2019, Regulation (EU) 2019/350 and Decision (CFSP) 2019/351 updated Regulation (EU) No. 36/2012 (available here) and Decision 2013/255/CFSP (available here), concerning restrictive measures in view of the situation in Syria. Seven individuals were added to the list of Designated Parties to whom the freezing of funds and economic resources apply, and a number of entries to the list amended. Regulation (EC) No 881/2002, imposing certain specific restrictive measures directed against certain persons and entities associated with the ISIL (Da’esh) and Al-Qaida sanctions regime, was also updated by Regulation (EU) 2019/353 (available here) on the same date. One individual was added to the list of Designated Parties.
Also on 4 March 2019, the European Council amended Annex I to Regulation (EU) No. 208/2014 and the Decision 2014/119/CFSP, concerning restrictive measures against certain persons, entities and bodies in view of the situation in Ukraine (see Implementing Regulation (EU) 2019/352 and Decision (CFSP) 2019/354, here and here respectively). One individual has been removed from the list of Designated Parties. A new section has been inserted concerning “Rights of defence and right to effective judicial protection”, providing that certain legal defence rights under the Code of Criminal Procedure of Ukraine that are ordinarily applicable to persons who are suspected or accused in criminal proceedings will also apply to the individuals listed under Regulation (EU) 2019/352 and Decision (CFSP) 2019/354.