On April 8, 2022, was adopted the Council Regulation (EU) 2022/576 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine was.
1 Background
1.1 Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of the actions of Russia destabilising the situation in Ukraine
Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine was adopted in 2014. In political terms, this is linked closely to Russia’s annexation of Crimea in February-March 2014 and the war in eastern Ukraine (Donbas) in April 2014, which begins with the creation of the so-called Donetsk and Luhansk ‘people’s republics’. The Regulation implements measures envisioned in Council Decision 2014/512/CFSP and applies restrictions on:
- the export of certain dual-use goods and technologies and the provision of services related to them;
- some of the services related to the supply of arms and military equipment;
- the direct or indirect sale, supply, transfer or export of certain technologies for the oil industry in Russia;
- access to the capital market for some financial institutions.
1.1.1 Dual-use goods and technologies
The direct or indirect sale, supply, transfer or export of dual-use goods and technologies, whether or not they originate from the Union, to any person or legal persons, entities or bodies in Russia or intended for use in Russia, are prohibited if these goods are or could be intended – in whole or in part, for military use or for military end-users.
The direct or indirect provision of technical assistance or brokering services related to dual-use items and technologies to any person or any legal person, entity or body in Russia or intended for use in Russia, are prohibited if these items are or could beused – in whole or in part, for military use or for military end-users. The prohibition also applies to the provision of financing or financial assistance related to such goods and technologies.
1.1.2 Weapons and military equipment
The direct or indirect provision of technical assistance related to goods and technologies listed in the Common Military List, directly or indirectly, to any person or legal person, entity or body in Russia or intended for use in Russia, as well as the provision of financing or financial assistance related to such goods and technologies are prohibited.
1.1.3 Technologies for the oil industry
A prior permission is required for the direct or indirect sale, supply, transfer, or export of the petroleum industry technologies listed in Annex II of Regulation No 833/2014, whether or not they originate from the Union, to any person or legal persons, entities or bodies in Russia or in any other country, if such equipment or technology is intended for use in Russia.
1.1.4 Access to the capital market
Prohibited is the direct or indirect purchase, sale, provision of brokering services or assistance in the issuance or other trading in transferable securities and money market instruments with a maturity exceeding 90 days, that are issued after 1 August 2014 by a significant credit institution established in Russia with over 50 % State ownership or control; a legal person, entity or body established outside the Union in which more than 50 % of the ownership rights are held by SBERBANK/VTB BANK/GAZPROMBANK/VNESHECONOMBANK (VEB)/ROSSELKHOZBANK or which acts on behalf of them / on their instructions.
1.2 Decision (CFSP) 2022/578 amending Decision No 2014/512/CFSP
On April 8, 2022, Council Decision (CFSP) 2022/578 amending Decision 2014/512/CFSP concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine was adopted. The Decision:
- expands the list of controlled goods that could contribute to Russia’s military and technological progress or to the development of its defence and security sector;
- introduces further restrictions on the import of coal and other solid fossil fuels from Russia;
- introduces further restrictions on the export of jet fuel and other goods to Russia;
- prohibits the award and continuation of public procurement and concession contracts to Russian citizens and entities or bodies established in Russia;
- prohibits the provision of support, including financing and financial assistance, or any other benefit from a Union, Euratom or Member State programme to Russian entities that are public property or that are under public control;
- expands the scope of the prohibitions on the export of euro-denominated banknotes and on the sale of euro-denominated transferable securities so that they can cover all official currencies of the Member States;
- expands the scope of the exemptions from the prohibition on transaction with certain state-owned entities concerning transactions for the purchase, import or transport of fossil fuels and certain minerals in Switzerland, the European Economic Area and the Western Balkans;
- implements a prohibition for the road transport undertakings established in Russia to transport goods by road within the territory of the Union and a prohibition for the vessels registered under the Russian flag to access ports;
- prohibits being a beneficiary, acting as a trustee or in similar capacities for Russian persons and entities, as well as providing certain services to trust.
2. Council Regulation (EU) 2022/576 of 8 April 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of the actions of Russia destabilising the situation in Ukraine
The Regulation is adopted in response to the Russian invasion of Ukraine and ensures the uniform application of the measures envisioned in Decision (CFSP) 2022/578 in all Member States. In addition to making amendments in Regulation (EU) No 833/2014 that implement the measures described in section 1.2, Regulation (EU) 2022/576 also envisions some new provisions in the spirit of those same measures.
2.1 Vessels
Granting access to ports in the territory of the Union to any vessel registered under the Russian flag after April 16, 2022 is prohibited.
2.2 Assistance to the Russian economy
The purchase, import or transfer into the Union, directly or indirectly, as well as the provision of technical assistance, brokering or other services, financing or financial assistance of/related to goods, generating significant revenue for Russia and thereby secure its actions destabilising the situation in Ukraine, are prohibited if they originate or are exported from Russia. The goods affected by the prohibition are listed in Annex XXI and include:
- Food products;
- Alcohol;
- Glass fibres;
- Silver;
- Ships;
- Furniture and furniture parts, etc.
2.3 Fuels
The purchase, import or transfer into the Union, directly or indirectly, as well as the provision of technical assistance, brokering or other services, financing and financial assistance related to/of coal and other solid fossil fuels are prohibited. The list of fuels is set out in Annex XXII.
2.4 Industrial capacity
The sale, supply, transfer or export, directly or indirectly, as well as the provision of technical assistance, brokering or other services, financing and financial assistance related to/of goods that could favour in particular the development of Russia’s industrial capacity, of any person or legal person, entities or body in Russia or intended for use in Russia are prohibited. The goods affected by the prohibition are listed in Annex XXIII and include:
- Different types of construction materials;
- Chemical compounds;
- Dyes, colourants, paints and varnishes;
- Paper and cardboard;
- Cotton and other fabrics;
- Pipes, wires, tanks, steam boilers;
- Generators;
- Furniture, etc.
2.5 Road transport enterprises
It is prohibited for all road transport undertakings established in Russia to transport goods by road within the territory of the Union, including when they are passing in transit.
2.6 Financial transactions carried out by Russian nationals
It is prohibited to accept deposits from Russian citizens or any person residing in Russia, or from legal persons, entities or bodies established in Russia, if the total value of the deposits of the person, legal person, entity or body exceeds EUR 100 000 with a credit institution.
The provision of wallets for crypto assets, accounts or escrow services to Russian citizens or people residing in Russia, or to legal persons, entities or bodies established in Russia, is prohibited if the total value of the natural or legal person, entity or body’s crypto assets for a given wallet, account or escrow service provider exceeds EUR 10 000.
❗ The prohibitions do not apply to citizens of Member States, of Member States of the European Economic Area or of Switzerland, nor to people holding a temporary or permanent residence permit in a Member State, in a Member State of the European Economic Area or in Switzerland.
2.7 Banknotes
The sale, supply, transfer or export of banknotes denominated in any official currency of a Member State to Russia or to any natural or legal person, entity or body in Russia, including the Government and the Central Bank of Russia, or for use in Russia are prohibited.
❗ The prohibition in paragraph 1 does not apply to the sale, delivery, transfer, or export of banknotes denominated in any official currency of a Member State if such sale, delivery, transfer or export is necessary for personal use of the people travelling to Russia or of their immediate family members travelling with them.
2.8 Public procurements and concessions
The Regulation prohibits the award or continuation of any public procurement or concession contract that is in the scope of the Public Procurement Directives to or with a Russian national or a natural or legal person, entity or body established in Russia; a legal person, entity or body in which more than 50% of the ownership is held directly or indirectly by a Russian-established entity; a natural or legal person, entity or body acting on behalf of on the instructions of such an entity.
2.9 Financial support for legal entities with state participation
The provision of direct or indirect support, including financing and financial assistance, or any other benefit under a national programme and contracts of the Union, Euratom or a Member State within the meaning of Regulation (EU, Euratom) 2018/1046, to any legal person, entity or body established in Russia that is publicly controlled or with over 50% public ownership is prohibited.
2.10 Trusteeship and ownership
The Regulation prohibits registering, providing a headquarters, business or administrative address, as well as management services to a trust or any other similar legal form that has as a trustee or beneficiary:
- Russian citizens or people residing in Russia;
- legal persons, entities or bodies established in Russia;
- legal persons, entities or bodies in which more than 50% of the ownership is held directly or indirectly by a natural or legal person, entity or body referred to in items 1 and 2;
- legal persons, entities or bodies controlled by a natural or legal person, entity or body referred to in points 1 and 2;
- a natural or legal person, entity or body acting on behalf of or on the instructions of a natural or legal person, entity or body referred to in points 1 and 2;
The Regulation prohibits, effective May 10, 2022, acting as, or contracting for another person to act as trustee, named shareholder, director, secretary, or similar position in a form of trust or any similar legal form that has as a trustee or beneficiary one of the aforementioned persons.
3 Subsequent amendment of Regulation (EU) No 833/2014
The Regulation is amended by Council Regulation (EU) 2022/879 of June 3, 2022. It introduces the additional various restrictive measures envisioned in Decision (CFSP) 2022/884.
It imposes a ban on the advertising of products or services with any content produced or broadcasted by Russian media that are under the permanent control of the Russian leadership, subject to the suspension of broadcasting licenses.
The purchase, import or transfer, directly or indirectly, and the direct or indirect provision of technical assistance, brokering services, financing or financial assistance or any other services related to crude oil or petroleum products is prohibited if the products originate from Russia or if they are exported from Russia.
The Regulation envisions some cases that could allow for the prohibitions described in paragraph 2.6 to be derogated.
The provision of specialised services for financial communications used for the exchange of financial data to the legal persons, entities or bodies listed in Annex XIV, or to any legal person, entity or body established in Russia with over 50% of the ownership held directly or indirectly by an entity listed in Annex XIV, is prohibited.
The provision, directly or indirectly, of consultancy services related to accounting, auditing – including statutory auditing, tax or bookkeeping, or management and business or public relations consultancy services to the Government of Russia and to legal persons, entities or bodies established in Russia is prohibited.
