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New EU and UK Sanctions Aimed at Russia and Belarus: What You Need to Know

Cooley Alert

On 3 June 2022, the European Council finally adopted the sixth set of economic and individual sanctions targeting Russia and Belarus. The new measures, which came after weeks of member state negotiations, focus on oil imports and transport, broadcasting outlets, export restrictions, further financial and business-related restrictions, and the criminalisation of sanctions breaches. Additional individuals also have been added to the travel ban and asset freeze lists. The UK has announced a series of similar measures.

European Union sanctions

We’ve outlined below the key measures of the EU sanctions package.

Oil import restrictions

The EU has banned the purchase, import, and transfer of crude oil and petroleum products from Russia into the EU. This ban comes into effect immediately but includes provision for a wind-down period for crude oil and petroleum contracts.

EU member states which import Russian oil via pipelines will be able to rely on a temporary exception until the European Council decides otherwise. However, onward sales of this oil within or outside the EU will not be permitted.

Bulgaria also has agreed a special temporary derogation until the end of 2024, which will allow it to continue importing crude oil and petroleum products from Russia via maritime transport. Similarly, Croatia will be able to import Russian vacuum gas oil required for the functioning of its refinery until the end of 2023.

Oil transport services

EU operators will be prohibited from insuring and financing the transport of Russian crude oil or petroleum products to third countries. This prohibition will not apply to the execution of contracts concluded before 4 June 2022 until 5 December 2022.

Broadcasting suspension

The EU has suspended the broadcasting activities of three additional Russian state-owned outlets: Rossiya RTR/RTR Planeta, Rossiya 24/Russia 24 and TV Centre International. They will not be able to distribute content via any means in the EU, and advertising of products and services by all EU persons in any content produced or broadcast by the outlets will be prohibited.

Export restrictions

The EU has expanded the list of advanced technology items banned from export to Russia to include 80 chemical products which could be used in the development and manufacture of chemical weapons. Additional persons and entities associated with Russia’s and Belarus’s military and defence industry also have been added to the list of persons encompassed by export restrictions of dual-use goods and technology. Discretionary authorisations may not be granted by the EU to export dual-use goods and technology to persons on this list. These additions align the EU measures with the US Export Administration Regulations.

Financial measures

The EU has extended the prohibition on the Society for Worldwide Interbank Financial Telecommunication (SWIFT) messaging system to include Sberbank, Credit Bank of Moscow, Russian Agricultural Bank, and the Belarusian Bank for Development and Reconstruction. Applicable from 14 June 2022, this effectively disconnects the banks from the international financial system by blocking access to instant SWIFT transactions.

Consulting services measures

Similar to restrictions imposed by the US, the EU also has barred the direct or indirect provision of accounting, auditing, statutory audit, bookkeeping and tax consulting services, business and management consulting, and public relations services to the Russian government and Russian persons. This broadly drafted restriction does not apply to:

  • The provision of services that are strictly necessary for the termination by 5 July 2022 of contracts concluded before 4 June 2022.
  • The provision of services strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy.
  • The provision of services to a legal person or entity established in Russia which is owned or controlled by a legal person or entity incorporated in an EU member state.  

The EU may authorise the provision of these services if they are necessary for humanitarian purposes or civil society activities that promote democracy, human rights or the rule of law in Russia.

Individual listings: Travel ban and asset freeze

The EU has sanctioned a further 77 Belarusian and Russian individuals and 26 Belarusian and Russian entities (see EU Regulation 269/2014 and EU Regulation 765/2006). This brings the total number of individuals and entities listed to 1,370 and 136, respectively. The individuals face a travel ban and an asset freeze in the EU.

Criminalisation for sanctions breaches

The package includes a provision requiring EU member states to lay down criminal penalties for EU sanctions infringements if they have not yet done so.

UK sanctions

The UK has announced similar measures to the EU but has not yet adopted relevant legislation. These include:

  • Ending all imports of Russian coal and oil by the end of 2022, and all imports of gas as soon as possible thereafter.
  • Removing selected Russian banks from the SWIFT messaging system.
  • Cutting off Russia’s access to the UK’s management consulting, accounting and public relations services.
  • Implementing import tariffs covering £1.4 billion worth of Russian goods, including platinum and palladium.
  • Enacting export bans to hit more than £250 million worth of goods, targeting key materials such as chemicals, plastics, rubber and machinery.
  • Prohibiting major Russian airlines (Aeroflot, Ural Airlines and Rossiya Airlines) from selling their unused landing slots at UK airports; these Russian airlines also have been added to the UK asset freeze list.
  • Banning all new outward investment to Russia.
  • Prohibiting the insurance of ships carrying Russian oil.

Next steps

The sanctions regulatory landscape is constantly changing. Building on the EU and UK’s previous round of measures, these packages put in place new rules which will affect the business activities or entities of companies operating in Russia, Belarus and Ukraine. Companies should look to monitor the situation closely and prepare to make adjustments to their operations to ensure compliance with the evolving rules.

If you have any questions, please reach out to any of the Cooley lawyers listed below, who can advise you on the applicable EU and UK sanctions – and how they affect you and your business.

Cooley trainee solicitor Victoria Barlow also contributed to this alert.

Related Contacts
Caroline Hobson  Partner London
Juan Nascimbene  Associate London
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