Foreign Trade14.04.2022 Newsletter

Ukraine war: The fifth package of sanctions has been adopted

The new sanctions package includes tougher sanctions in various economic sectors. They also aim to prevent circumvention measures via Belarus. The sanctions are intended to put even greater pressure on the Russian economy.

Import bans in the energy and consumer goods sector

With the amendment of Regulation (EU) 833/2014, further import bans have been introduced. These initially involve all forms of Russian coal and other solid fossil fuels such as peat, coke, and pitch. 

Further import bans have been imposed on goods listed in Annex XXI to Regulation (EU) No 833/2014. The list includes, among other things: cement, rubber products, wood, spirits and seafood. In addition, the amendment of Regulation (EU) 765/2006 aims to put a stop to previous circumvention measures via Belarus by imposing a ban on the import of potash from Belarus. 

Export bans in the energy and technology sector

Additional newly introduced export bans to Russia relate in particular to the technology sector. In this area, Russia is especially dependent on supplies from other countries. Accordingly, export bans have been imposed on, among other things, modern semiconductors, precision equipment, chemicals or special catalysts for refineries. The same applies to jet fuel and fuel additives that can be used by the Russian army. A complete list can be found in Annex XXIII of Regulation (EU) 833/2014.

Annex XVIII, which already lists luxury goods, now includes pearls and optical instruments, among other things.

Sanctions against banks

Four Russian financial institutions have now been subjected to a full ban on transactions, whereas previously only certain transactions with them were prohibited. This mainly concerns Russia's second largest bank, VTB Bank, but also the financial institutions Sovcombank, Novikombank and Otkritie FC Bank. 

Sanctions in the traffic and transport sector

Access to EU ports is prohibited for ships sailing under the Russian flag as of 16 April 2022. There are exceptions, in particular for medical goods, energy, food and humanitarian aid.

Both Russian and Belarusian carriers are being subjected to a complete ban on activities in the EU. Here as well, comparable exceptions apply as in shipping.

Restriction of participation in public contracts and financing

A further prohibition against Russian nationals and entities concerns their participation in public tenders in the EU. However, exceptions to this are permitted if no viable alternative is available. Such exceptions exist, for example, in the area of civil nuclear capabilities and facilities, and regarding the provision of essential goods or services that can only be provided by the excluded persons. Unless an exception applies, existing public contracts with Russian companies must also be terminated immediately. 

The provision of funding, financial assistance or other benefits under a Union programme (by Euratom or a Member State) to Russian public or publicly-controlled entities is also prohibited. This affects programmes such as Horizon 2020, Erasmus+ or Horizon Europe, whose grant agreements are being terminated and associated payments suspended.

Further sanctions against individuals and companies

Regulation (EU) 269/2014 has also been amended. The list of persons whose assets are frozen has been expanded to include over 200 individuals and 18 entities. These include the members of the "People's Council" of the so-called "Donetsk People's Republic" and the so-called "Luhansk People's Republic", as well as companies such as Ruselectronics, Tecmash or the Kalashnikov Concern, among others.

What you need to do

Ensure that regular sanction screenings are conducted on the basis of the new sanctions. In particular, due to the extended or newly introduced restrictions on goods, companies need to check the corresponding lists of goods must as to their relevance. Many of the regulations provide for exceptions and transitional arrangements, such as for humanitarian, diplomatic, or consumer purposes. There are also exceptions for the implementation of contracts that were concluded before the measures entered into force. Therefore, it may be worthwhile checking whether these exceptions and transitional arrangements apply to you. 

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Stephan Müller

Stephan Müller

PartnerAttorney

Konrad-Adenauer-Ufer 23
50668 Cologne
T +49 221 2091 448
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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
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Sabrina Hennig

Sabrina Hennig

AssociateAttorney

Am Sandtorkai 74
20457 Hamburg
T +49 40 808105 145
F +49 40 808105 555

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