On 21 July 2022 the EU Council adopted further Russia sanctions, including its “maintenance and alignment” sanctions package. The new Regulations/Council Decisions that introduce these sanctions can be found here and here.
In summary, the new sanctions package (the “seventh sanctions package”) includes:
- A new prohibition to purchase, import, or transfer, directly or indirectly, gold, if it originates in Russia and it has been exported from Russia into the EU or to any third country. This prohibition also covers jewellery.
- An extended list of controlled items, which may contribute to Russia’s military and technological enhancement or the development of its defence and security sector
- An extension of the existing port access ban to locks.
- A number of clarifications to existing measures, for instance in the field of public procurement, aviation and justice.
In addition to the sanctions above, the new sanctions package lists additional individuals and entities and strengthens reporting requirements, putting the burden of declaring assets onto sanctioned people, in order to facilitate the freezing of their assets in the EU.
Prohibition of the export, import or transfer of gold and other controlled items
The new package of sanctions prohibits the purchase, import or transfer (directly or indirectly) of Russia-origin gold (including jewellery) if it has been exported from Russia into the EU or to any third country.
Furthermore, it extends the list of controlled items which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector.
An extension of the existing port access ban to locks.
The new package of sanctions extends the existing port access ban to locks to avoid the circumvention of sanctions.
Expanded deposit restrictions
The scope of the prohibition on accepting deposits has been broadened to include those from legal persons, entities or bodies established in third countries and majority-owned by Russian nationals or natural persons residing in Russia. Additionally, the acceptance of deposits for non-prohibited cross-border trade is now subject to a prior authorisation by the national competent authorities.
This means that the restrictions on deposits no longer apply only to Russian nationals or natural persons residing in Russia and legal persons established in Russia, but also to entities established outside of the EU which are owned more than 50 % by Russian nationals or natural persons residing in Russia.
The sharing of technical assistance with Russia
The new package of sanctions allows the sharing of technical assistance with Russia for aviation goods and technology insofar as it is needed to safeguard the technical industrial standard setting work of the International Civil Aviation Organisation.
Exemption from the ban on entering into transactions with Russian public entities
The new package of sanctions provides for an exemption from the ban on entering into any transactions with Russian public entities necessary to ensure access to judicial, administrative or arbitral proceedings.
Furthermore, it extends the exemption from the prohibition to engage in transactions with certain state-owned entities as regards transactions for agricultural products and the supply of oil / petroleum products to third countries.
New individuals and entities added to the EU’s Russia sanctions list
The new package of sanctions adds 48 people and 9 entities to the EU’s Russia sanctions list, including Sberbank, senior members of the political or cultural establishment, high ranking military leaders and staff, Nightwolves and some of its members, propagandists and leading businesspersons.
Furthermore, it obliges designated people / entities with assets within a Member State jurisdiction to report these assets and to cooperate with the competent authority in the verification of this reporting.
Exemption from the asset freeze of designated people’s assets under certain conditions
The new package of sanctions introduces a derogation from the asset freeze / ban on making available to designated people and entities where necessary for:
- the prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment;
- the purchase, import or transport of agricultural and food products, including wheat and fertilisers (with regards to certain designated banks); and
- the orderly wind-down of operations, including correspondent banking relations, with Sberbank.
Adjustments to licensing grounds in relation to dual use and critical industry lists controls
The exemption grounds in article 2 and 2a have been amended by removing the exemption for ensuring cyber security and information security. The exemption has been replaced by a case-by-case licensing ground 4(h).
Adding medical or pharmaceutical purposes in grounds for Annex XXIII items
An additional licensing ground focusing on medical or pharmaceutical purposes has been added in article 3k(5). The previous licensing grounds were limited to humanitarian purposes.
Extension of carve-out to service ban to EU/EEA/Swiss owned/controlled entities
The carve-out to the service ban in article 5n has been expanded to also include entities in Russia owned or controlled by an entity established in a country member of the European Economic Area, or of Switzerland.
Reporting obligations for EU operators
Lastly, the new package of sanctions has strengthened the provisions on reporting obligations for EU operators.