EU-Russia Sanctions Update

In recent days, the European Union has imposed new sanctions against Russia on an almost daily basis at an unprecedented pace. What do companies need to bear in mind now?

1. On 28 February 2022, the Council of the European Union adopted Decision (Common Foreign and Security Policy - CFSP) 2022/335 amending Decision 2014/512/CFSP. This Decision prohibits transactions with the Central Bank of Russia and prohibits transactions related to the management of reserves and assets of the Central Bank of Russia, including transactions with legal persons, entities or bodies acting on behalf of or at the direction of the Central Bank of Russia.

It shall be prohibited to participate, knowingly or intentionally, in activities the object or effect of which is to circumvent the prohibitions laid down in this Decision, including by acting in place of, or for the benefit of, any natural or legal person, entity or body subject to those prohibitions, by making use of any of the exceptions provided for in this Decision.

2. The Council of the European Union has added 26 persons and one entity to the list of persons, entities and bodies subject to restrictive measures contained in Annex I to Regulation (EU) No 269/2014. The organisation is the Gas Industry Insurance Company SOGAZ.

3. Importers in the Union are advised to exercise due diligence in verifying the true origin of the products they declare, as products covered by the envisaged import ban could be imported into the Union from neighbouring countries of Ukraine, in particular Russia and Belarus. This applies in particular to coal products of CN heading 2701 and steel products of CN headings 7201 to 7207 as well as CN headings 7304, 7305 and 7306. In view of this risk of circumvention of the prohibition, the release for free circulation of these products imported from Russia and Belarus may be subject to the presentation to the customs authorities of conclusive evidence that the products in question are not covered by the prohibition on imports of goods originating in the non-government-controlled regions of Ukraine of Donetsk and Luhansk.

4. In addition, further restrictive measures have been adopted prohibiting Russian air carriers, including distributors with code-share or blocked-space agreements, Russian-registered aircraft and non-Russian-registered aircraft owned, chartered or otherwise controlled by a Russian natural or legal person, entity or body, from landing on, taking off from or overflying the territory of the Union.

What to do now?

• Check whether your business partners and their shareholders, management or beneficial owners belong to the persons listed in Annex I of Regulation (EU) No. 269/2014.
• Also check export restrictions for so-called dual-use goods according to Annex 1 of EU Regulation No. 428/2009.
• If you terminate the contractual relationship because your contractual partner is affected by sanctions, you are liable because you no longer fulfil your contractual obligations. Check whether you are entitled to an extraordinary right of withdrawal. Is there a case of force majeure?

Our sanctions experts will be happy to help you. ​