The Netherlands Ministry of Foreign Affairs released the ‘Russia Manual’ which contains additional guidance on the application of the EU sanctions against Russia.
The manual, which is currently only available in Dutch, summarizes the contents of the various EU Regulations setting out the EU sanctions against Russia, Crimea and Sevastopol. Below is a short overview of additional points of guidance set out in the manual:
Export of dual use items (i.e., items included in Annex I to EU Regulation 428/2009) to Russia
The export of dual use items to military end users or for military use in Russia is prohibited. The manual points out that this means that, in practice, the export of dual use items is thus only permitted if the risk of such (potential) military use can be ruled out. Such risk inter alia exists if the end user manufactures both civil as well as military goods, if the end user is a known supplier to the military industry, if the end user is affiliated with the Russian military, etc. Obligations to supply dual use items to military end users or for military use which arise under contracts concluded before 1 August 2014 can still be fulfilled, subject to a separate license from the authorities.
Previously issued Dutch global export licenses often also included Russia as a permitted destination country. Such existing licenses do, according to the manual, however not authorize transactions which are prohibited by the EU sanctions against Russia. In practice this means that if dual use items are to be supplied to a military end user or for military use in Russia, even if pursuant to a contract concluded before 1 August 2014, an existing global export license does not cover this supply. In that case a separate license needs to be applied for. The manual points out that applications for such licenses shall be considered “with the utmost restraint”.
Licenses under EU sanctions
If a contract comprises multiple shipments or deliveries to one and the same party, a single license can be obtained for the entire contract. If however, the shipments/deliveries comprise multiple goods or multiple recipients, a separate license is required for each and every shipment or delivery.
Timeframe for license applications/rating enquiries
The manual indicates that the Dutch authorities will try to process license applications and rating enquiries within 4 to 8 weeks. In ‘very complex’ cases, the 8 weeks may, however, not be sufficient.
Due diligence obligations
The manual points out that companies should pay attention to whom they are supplying goods or services to, and should consider the possible risks of diversion. This means that exporters must have enquired who the end user of their supply is. The manual observes that an end user statement is the most obvious instrument to do so, but also suggests the use of contractual clauses, such as ‘self repeating’ contract clauses which require each and every party in a chain of contracts to pass on the obligations set out in such a clause, or clauses in general trading terms. Such clauses can contain an obligation not to pass on goods etc. to other parties in breach of the EU sanctions against Russia.
The manual can be accessed here.
