EU introduces sixth sanctions package
On 3 June 2022, the EU adopted a sixth sanctions package against Russia which includes economic, individual, media and diplomatic measures (see the full text of the regulation here).
These measures relate to the following key areas:
The package includes a ban on Russian oil imports, giving EU member states six months to phase out crude oil and eight months to phase out other refined petroleum products. Special temporary derogations have been agreed for Bulgaria, Croatia and the Czech Republic.
Oil supplied by a pipeline from Russia to a Member State will continue to be allowed until the Council extends the bans to this supply (this is to ensure that landlocked EU Member States that depend of this oil can continue to receive it). The transfer, transport or resale of this crude oil to other Member States or to third countries is however prohibited from 5 February 2023 (with the exception of sales to the Czech Republic which are currently authorized until December 5, 2023).
It is estimated that these sanctions will reduce Russian oil trade to the EU by 92% by the end of this year.
Insurance and reinsurance of maritime transport of crude oil and certain petroleum products originating in or exported from Russia is also now prohibited (subject to certain liquidation periods in accordance with the above).
Belinvestbank, Sberbank, Credit Bank of Moscow and Russian Agricultural Bank have now all been removed from the SWIFT system.
The broadcast (or facilitation of the broadcast) of content by Russian public broadcasters, Rossiya RTR/RTR Planeta, Rossiya 24/Russia 24 and TV Center International, is now banned in the EU. This is in addition to the restriction previously in place against Sputnik and Russia Today (see previous briefing here). In addition, EU companies will now be prohibited from advertising products or services in any content produced or distributed by these entities.
The EU has expanded the list of prohibited goods and technologies that could contribute to Russia’s military and technological improvement or the development of the defense and security sector. For more details on the last goods to be added, see Annex II of the new regulation here.
A license must be obtained before the goods listed can be exported or used in Russia. The list of parties for which additional and stricter licensing requirements apply has also been extended.
The provision of accounting, consulting and public relations services to Russian entities is now banned in the EU. There are a limited number of exceptions applying to services that are necessary for legal representation. An exemption also exists for the provision of services to Russian subsidiaries of EU companies.
- Individuals and companies
The new EU package also expands the list of Russian and Belarusian individuals and companies facing asset freezes and travel bans. Sanctions have been imposed against military officials linked to the Bucha and Mariupol killings, industrial and technology companies, politicians and businessmen, and their family members.
In addition, on June 23, 2022, the EU renewed its existing sanctions relating to the annexation of Crimea and Sevastopol for an additional year (until June 23, 2023). There are restrictions on the import of goods from these regions, on trade and investment in certain sectors, and on the export of certain goods and technologies.
Latest UK announcements and restrictions
On June 23, 2022, the UK published a new amendment to its Russia Sanctions Regulations (Amendment 10). The new measures include:
- Other export prohibitions
The export of goods and technologies likely to be used in internal repression or likely to be used for the production and development of chemical or biological weapons is now prohibited to Russia and/or Ukrainian territory not controlled by the government. Existing export bans have also been extended to cover maritime goods and technology intended to be placed on board a Russian-flagged vessel, as well as jet fuel and fuel additives. Related services are also limited.
Restrictions on steel products (introduced on April 14, 2022) have been extended. New prohibitions apply to the provision of technical assistance, financial services and funds, and brokerage services related to these products (defined by reference in Annex 3B).
- Interception and monitoring services
A new Chapter 4D prohibits the provision of interception and surveillance services to or for the benefit of the Russian government.
The export of banknotes (denominated in pounds sterling or any official currency of the European Union) to Russia or intended for use in Russia is now prohibited (in line with existing EU measures).
- “Income-generating assets”
A new Chapter 4G and a new Schedule 3D have been added to the existing regulations, which list “income-generating property”. The importation or acquisition of such goods when originating in or located in Russia is prohibited, as is the supply or delivery of such goods from Russia to the United Kingdom. Related services and technical support are also now limited.
Twelve more people were added to the UK assets freeze list on June 16, 2022 under the Russian sanctions regime, along with three other Russian entities listed under the Myanmar (Burma) regime for supplying aircraft parts Russians to the armed forces of Myanmar.
On April 21, 2022, the UK government announced that it was expanding the list of products subject to import bans and increasing tariffs and bans on over £1 billion worth of Russian goods. This was shortly followed by an announcement that the UK would reduce customs duties to zero on all goods from Ukraine under the UK-Ukraine Free Trade Act. . The measures are designed to hamper the Russian economy, while supporting Ukraine.
The British Foreign Secretary announced a ban on the export of accounting, management consulting and public relations services to Russia (British services are said to account for 10% of Russian imports in these sectors) on May 4, 2022. The text of the legislation imposing these restrictions is still awaited, as is the proposed implementation date.
The UK Business Secretary commented:
“[UK] professional services exports are extremely valuable to many countries, and that’s exactly why we’re excluding Russia. By restricting Russia’s access to [the UK’s] world-class management consultants, accountants and public relations firms, we are increasing the economic pressure on the Kremlin to change course.
The announcement was accompanied by 63 new asset freeze designations, mostly targeting Russian media and propagandists.
On May 9, 2022, the Secretary of State for International Trade and the Chancellor of the Exchequer announced a new set of sanctions against Russia and Belarus targeting £1.7 billion worth of goods. Sanctions include new import tariffs and export bans. The new tariffs will increase by up to 35% on products such as chemicals, platinum and palladium.
On May 19, 2022, the UK government also designated state-owned Aeroflot, Russia’s largest airline, Ural Airlines and Rossiya Airlines for an asset freeze. These entities will now not be able to sell their unused and lucrative landing slots at UK airports.
The UK’s Office of Financial Sanctions Implementation has also published updated Financial Sanctions Guidance (applicable from 15 June 2022), reflecting changes to the UK’s enforcement regime under the Financial Sanctions Act. economic crime (see previous update here).[View source.]