Foreign Trade / Compliance31.08.2022 Newsletter

Ukraine war: Applicable sanctions at a glance


Since the beginning of the Russian war of aggression against Ukraine, the EU and the US have imposed countless sanctions against Russia and Belarus. The EU has now issued the seventh package of sanctions. The multitude of regulations and dynamic develop-ments have raised a wide range of questions for companies. We are providing you with an overview of the sanctions imposed by the EU so far. Regulations (EU) 833/2014 and (EU) 269/2014 are relevant in this respect.

1. Central sanction measures

Financial sector

The adopted provisions of Regulation (EU) 269/2014 are largely aimed at weakening the Russian and Belarusian financial sectors. To this end, ten Russian and four Belarusian banks - including Russia's largest bank Sberbank – have been excluded from the SWIFT system. In addition, transactions relating to securities and money market instruments with selected banks have been banned. Trading in cryptocurrency has also been restricted.

Selected industrial sectors

Key elements of the EU and US sanctions policy are the import and export restrictions on various goods and technologies, primarily regulated in Regulation (EU) 833/2014. This now affects a large number of industrial sectors.

Export restrictions apply to the following industrial sectors:

  • Military and military-usable goods and technology
  • Oil and gas production
  • Aerospace and maritime shipping
  • Luxury goods
  • Certain chemical substances
  • Cutting-edge technology (such as high-end electronic products)
  • Goods and services for the energy industry.

Import restrictions apply to the following industrial sectors:

  • Iron and steel products
  • Industries that are economically strong in Russia (such as cement, wood, selected fertilisers, seafood and spirits)
  • Coal and other solid fossil fuels
  • Crude oil and refined petroleum products
  • Gold, including jewellery.

Please note that some exceptions and transition periods apply. Therefore, the listing of a good does not necessarily imply a ban on engaging in such transactions. Rather, this needs to be examined separately in each individual case.

Personal sanctions

The personal sanctions regulated by Regulation (EU) 269/2014 are also a key element of the sanctions policy. If a natural or legal person is listed in the Annex to this Regulation (so-called Sanctions List), its funds and economic resources are frozen. No funds or economic resources may directly or indirectly benefit the listed persons. The EU Sanctions List alone already includes over 1000 natural persons and over 100 legal persons and entities.

2. Other sanctions

The aforementioned measures are supplemented by, among other things, a ban on business transactions with certain state-owned companies. Also in the public procurement sector, there is a fundamental ban on the award and fulfilment of contracts to the detriment of companies with links to Russia (see also our newsletter: Russia sanctions - what is still possible in public contracts?).

The provision of tax, management consulting and auditing services to Russian companies is also prohibited. Ships flying the Russian flag are no longer allowed to enter EU ports and locks. Finally, the EU has suspended the broadcasting activities of five state-owned Russian media outlets in the EU.

3. Where do we go from here?

The EU and the USA reserve the right to tighten their sanctions according to further developments in Russia's war of aggression against Ukraine. What changes there will be in the sanctions regime over the coming months depends in particular on how the war in Ukraine continues to develop.

4. What do we need to be do now?

  • Above all companies with substantial Russian business should set up a task force that definitely needs to cover the areas: law, compliance, key account management and public relations. Since public information and even official FAQs and press releases do not always accurately reflect the legal situation, the sanctions regulations themselves need to be checked for every planned transaction involving Russia.
  • The task force should ensure that goods and technologies are classified according to the new Annexes to the Russia sanctions, that business partners and banks are screened and, where necessary, export freezes put in place.
  • Particular attention should be paid to the fact that some of the original transition periods and privileges for existing contracts have since expired.
  • In addition, the task force should monitor further legal developments in the USA and Europe. Close contact with the company management is strongly recommended. Several companies have divided these teams into responsibilities - for the USA and for the EU.
  • Supply chains should be examined as to a possible Russian or Belarusian connection. This is particularly important, since not only direct but also indirect import restrictions apply.
  • Particular attention should now be paid to sanctions screening - i.e. checking business partners against the Sanctions Lists. Recent weeks and months have shown that the Sanctions Lists can also be changed at short notice. For this reason, we ideally recommend an up-to-date sanctions screening.
  • Companies that participate in public procurement proceedings should investigate their subcontractors and suppliers with regard to a possible Russian connection. Should such a connection with Russia exist, the above-mentioned ban on the award and fulfilment of contracts may apply.

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

Mareike Heesing
LL.M. (Köln/Paris I)

Junior PartnerAttorney

Konrad-Adenauer-Ufer 23
50668 Cologne
T +49 221 2091 320
M +49 172 5798 005