Compliance20.12.2023 Newsletter

EU adopts 12th package of sanctions against Russia

The EU has adopted its 12th package of sanctions against Russia. After several weeks of negotiations, the EU – in close cooperation with its G7 partners – has in particular imposed additional import and export bans against Russia, has sanctioned more than 140 additional individuals and has taken further measures to combat circumvention.

Introduction of additional export restrictions

Under the new sanctions package, the list of goods contributing to Russia's military and technological build-up or to the development of its defense and security sector is expanded and includes in particular the following dual-use and advanced technological and industrial goods:

  • Chemicals
  • Thermostats
  • DC motors and servomotors for unmanned aerial vehicles (UAV)
  • Machine tools and machine parts
  • Construction goods
  • Processed steel, copper and aluminum products
  • Laser
  • Lithium batteries

Tightening of the oil price cap

To make the Russian war of aggression against Ukraine more difficult, the international coalition of the G7+ has strengthened the enforcement of the oil price cap by introducing new measures. In order to ensure the implementation of and compliance with the price cap on Russian oil transported by sea, while making it more difficult to falsify certificates, the new package requires shipping companies to detail the transportation and insurance costs of the Russian oil cargos they carry. This breakdown of cost information should enable companies in the Russian oil supply chain to prove that the oil was purchased at or below the price cap. In addition, new measures will be adopted to tighten monitoring of the sale of tankers, particularly those vessels that can be used to circumvent the ban on imports of Russian crude oil or petroleum products. The package provides for a reporting obligation for the sale of tankers to third countries and an exemption from the ban on the sale of tankers to Russian persons and organizations or for use in Russia.

Stricter obligations to freeze assets

In order to tighten the obligations in connection with the freezing of assets, the European Council has agreed on a new criterion to include persons on the sanctions list. According to this criterion, persons who profit from the forced transfer of ownership of EU companies to Russian subsidiaries or from the forced transfer of control over such companies can be added to the list. In addition, it is now possible to keep deceased persons on the list if it cannot be ruled out that the assets in question would otherwise be used to finance the Russian war of aggression against Ukraine or other acts against the territorial integrity, sovereignty and independence of Ukraine.

New measures to prevent the circumvention of sanctions

The sanctions package provides for an extension of the ban on transit through Russiaas part of the tightening of measures to combat sanctions circumvention. Furthermore, economic operators will be obliged to contractually prohibit the re-export of goods and technologies listed in Annexes XI, XX and XXXV of Regulation (EU) No. 833/2014 to Russia. In addition, companies that are more than 40 % owned directly or indirectly by Russian citizens or companies established in Russia must now report all money transfers from the EU of more than € 100,000 to the national authorities on a quarterly basis.

Import ban on Russian diamonds

The 12th package of sanctions against Russia also imposes a ban on the import, purchase or transfer of diamonds originating in, exported from or transited through Russia. In close cooperation with the G7 members, the new regulation aims to ban the Russian diamond trade in the EU and thus reduce Russia's revenues from the export of diamonds to Europe and worldwide. The ban on the import of diamonds mined, processed or manufactured in Russia (with the exception of industrial diamonds) will be implemented by January 1, 2024 at the latest. During the course of the year, an indirect import ban will be gradually introduced by extending it to Russian diamonds processed in third countries.

Further measures

Moreover, the new sanctions include the following measures:

  • Sanctioning of over 140 other natural and legal persons and freezing of their assets.
  • Inclusion of 29 additional organizations from Russia or other third countries linked to the Russian military-industrial complex in the list of Annex IV of Regulation (EU) No. 833/2014 to be taken into account when Member States grant authorizations.
  • Import ban on raw materials for steel production, processed aluminum products and other metal goods as well as liquefied propane gas (LPG) under certain tariff numbers.
  • Prohibition on providing business and design-related software to the Russian government or Russian companies.

Entry into force

The amendments to the 12th package of sanctions against Russia went into force on December 18 and 19, 2023.

What should companies do now?

As with the previous sanctions packages, it is now necessary to check whether

  • existing as well as new business contacts are now sanctioned and whether
  • manufactured and distributed products or technologies are affected by the new bans.

Against the background of the new transit bans and the new contractual obligation to include a ban on re-export in certain contracts, contracts with customers and carriers should also be reviewed and, if necessary, extended to include the necessary provisions.

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Mareike Heesing<br/>LL.M. (Köln/Paris I)

Mareike Heesing
LL.M. (Köln/Paris I)

Junior PartnerAttorney

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