Aerospace and Defence02.06.2022 Newsletter

Sanctions: BAAINBw requires new self-declaration on EU Sanctions Regulation

The new Sanctions Regulation (EU) 2022/576 prohibits contracting authorities from awarding contracts to companies with links to Russia. This also applies if subcontractors with a connection to Russia have a share of more than 10% in the specific contract. As of 11 October 2022, contracts concluded with such companies prior to 9 April 2022 may no longer be performed and thus have to be terminated. The German Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support [Bundesamt für Ausrüstung, Informationstechnik und Nutzung der Bundeswehr, BAAINBw] has developed a form for its contractors to declare that they have no links to Russia. A reading version of the form can be found here.

Companies affected

This affects companies that have been awarded contracts by the BAAINBw. They should make such self-declarations. Through this, the BAAINBw is thus endeavouring to meet the obligations of the Federal Government arising from the new EU Sanctions Regulation (EU 2022/576), with which the EU Sanctions Regulation against Russia, which has been in place since 2014 due to the annexation of Crimea in violation of international law, has been adapted to the new situation (Russia's war of aggression).

Prescribed content of the self-declaration

The BAAINBw calls on companies affected to declare in a legally binding manner that they have no "connection with Russia" as defined by the new Sanctions Regulation. The wording of the form assumes such a connection, for example, if the company maintains a branch in Russia. Likewise, such a connection is assumed if a majority shareholding in the company (=contractor of the BAAINBw) is held by a Russian national or by a company that maintains a branch office in Russia or if there are other rights to issue instructions to a person or company with a connection to Russia.

In the case of contractors organised in joint ventures (JV), a possible Russian connection must be examined with respect to all shareholders of the JV whose share in the contract exceeds ten percent of the contract value.

The same also applies to companies involved downstream of the contractor (subcontractors, suppliers, others) whereby, according to the wording of the form, the aforementioned ten percent limit also applies to them.

As a result, the entire supply chain is included in the declaration content of the legal relationship between the BAAINBw and the company commissioned as a contractual partner. This makes it indispensable for the company required to make the declaration to obtain similar declarations from the downstream companies involved in the performance of the contract, insofar as they reach or exceed the 10% threshold.

According to the wording of the EU Sanctions Regulation, contracts concluded with the BAAINBw before 9 April 2022 will only be included in the declaration obligation as of 11 October 2022. For contracts dated on or after 9 April 2022 (decisive: the date of the last signature, unless otherwise expressly provided), the declaration is already required today.


If the required self-declaration is submitted unconditionally, it will have legal consequences under procurement law and contract law:

  • In terms of procurement law, the declaration is to be classified as part of the general suitability test. Although in the cases of relevance here the contract with the BAAINBw has already been concluded and is likely to be in the fulfilment phase, one should note that incorrectly submitted self-declarations may lead to exclusion from award procedures in future suitability tests. This applies irrespective of fault; however, the diligence exercised by the company concerned in clarifying the facts in the supply chain could avert a longer-term blocking of contracts. The party making the declaration must therefore check as carefully as possible and make sure that there is definitely no Russian connection for the contractual relationship at issue. The BAAINBw’s form expressly stipulates that the lack of Russian connection is also maintained in the supply chain throughout the entire (remaining) term of the contract.
  • In terms of contract law, in case of an actual connection to Russia, one will probably already have to assume that the contract is null and void in its entirety, because the EU Sanctions Regulation prohibits the conclusion of such contracts. This means that, under general German civil law, the nullity of the contract would already result from the violation of the directly applicable prohibitive law.

Recommended action

The endurance of supply chains of affected companies are once again being put to the test. Contractual partners of the BAAINBw need to act in the short term to ensure that there is no Russian connection whatsoever in their contractual relationships with the BAAINBw by the final deadline of 11 October 2022.

A pure back-to-back transmission of the form’s wording to the downstream subcontractors is not recommended. This is because - in the case of (later) proven false declarations – there is a risk of far-reaching legal consequences (invalidity of the contract, contract blocking), which can economically also affect a main contractor who has acted dutifully and whose Russian connection exists (only) in the supply chain. An adequate clarification of suppliers and subcontractors is therefore just as necessary as proper liability agreements and comprehensive documentation.

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