On 9 and 15 March 2022, the Council of the European Union (the “Council”) adopted new restrictive measures against Russia and Belarus due to the ongoing conflict in Ukraine. These new restrictive measures complete those adopted until March 2, 2022, which we discussed in a previous flash.
Restrictive measures against persons in Russia
The Council adopted restrictive measures against 175 additional people, including:
- 146 members of the Council of the Russian Federation, which ratified the decisions of the government concerning the Treaties of friendship, cooperation and mutual assistance between the Russian Federation and (i) the Donetsk People’s Republic and (ii) the Luhansk People’s Republic;
- 29 Russian high net worth individuals, including their family members, active in the metallurgical, agricultural, pharmaceutical, telecommunications, military, digital and energy sectors.
These 175 people have been added to the list of natural persons sanctioned under Regulation (EU) No 269/2014 of 17 March 2014 concerning restrictive measures with regard to actions compromising or threatening territorial integrity, sovereignty and Ukrainian independence. Restrictive measures include:
- The freezing of funds and economic resources belonging to or owned, held or controlled by these listed persons.
- A prohibition on making funds or economic resources available, directly or indirectly, to or for the benefit of such registrants.
- A travel ban applicable to listed individuals preventing them from entering or transiting EU territory.
As of March 15, 2022, restrictive measures imposed in response to the conflicts in Ukraine since the annexation of Crimea targeted a total of 877 listed individuals.
Restrictive measures against entities in Russia
The Board adopted restrictive measures against additional entities, including:
- 9 entities active in the aviation, military and dual-use, shipbuilding and machine building sectors.
These entities have been added to the list of entities sanctioned under EU Regulation No. 269/2014 of 17 March 2014 concerning restrictive measures with regard to actions compromising or threatening the territorial integrity, sovereignty and independence of Ukraine. The restrictive measures applicable to listed entities include the freezing of their funds and economic resources, as well as the prohibition to make funds or economic resources available to them, in the same way as these measures apply to individuals.1
As of March 15, 2022, restrictive measures imposed in response to the conflicts in Ukraine since the annexation of Crimea targeted a total of 62 listed entities.
Restrictive measures in the banking and financial sectors in Russia
The Council amended/adopted certain restrictive measures in the banking and financial sectors, in particular:
- Clarification of the definition of “securities” to include securities in the form of crypto-assets.
- Prohibition, effective April 15, 2022, on providing credit scoring services, or accessing subscription services related to credit scoring services, to any Russian national or individual residing in Russia or any entity established in Russia.
The Council also revised its position on the prohibition for credit institutions to accept deposits from Russian nationals, natural persons residing in Russia and entities established in Russia which exceed 100,000 euros. The very wide scope of this prohibition is now restricted by additionally exempting nationals of all Member States of the European Economic Area (the “EEA”) or Switzerland, as well as persons holding a temporary or permanent residence permit for a Member State of the EEA or for Switzerland. Previously, this exemption only concerned nationals and/or residents of EU Member States.
Restrictive measures in other sectors of the Russian economy
The Council adopted new restrictive measures in other economic sectors, in particular:
- A prohibition on selling, supplying, transferring or exporting, directly or indirectly, maritime navigation goods and radio communication technology, as listed in Annex XVI, whether or not originating in the EU, to any person or entity in Russia, for use in Russia or placed on board a Russian-flagged vessel. It is also prohibited to:
- provide technical assistance, brokerage services or other services related to the items listed in Annex XVI, including the supply, manufacture, maintenance and use of these items directly or indirectly to/by any person or entity in Russia or for use in Russia;
- provide financial assistance or financing related to the items listed in Annex XVI for any sale, supply, transfer or export of these items, or for the supply of services listed in the previous point, directly or indirectly, to any natural or legal person in Russia or for use in Russia.
- A ban on importing, directly or indirectly, steel products listed in Annex XVII into the EU if they originate in Russia or have been exported from Russia. It is also prohibited to:
- purchase, directly or indirectly, products listed in Annex XVII that are located or originate in Russia;
- transport the products listed in Annex XVII if they originate in Russia or if they are exported from Russia to any other country;
- provide, directly or indirectly, technical assistance, brokerage services, financing or financial assistance, including financial derivatives, as well as insurance and reinsurance, related to any of the prohibitions relating to the products listed in l Annex XVII.
- A prohibition on selling, supplying, transferring or exporting, directly or indirectly, any of the luxury goods listed in Schedule XVIII to any person or entity in Russia or for use in Russia. Unless otherwise stated in the appendix, this prohibition applies to luxury products listed whose value exceeds 300 euros.
- A ban on new investments in the Russian energy sector, including a ban on providing investment services directly related to the activities referred to in Article 3a of Regulation (EU) 833/2014, as replaced by regulation (EU) 2022/428.
- A ban on the export of goods and technology related to the energy sector, including the provision of technical or financial assistance related to these items.
In addition to these restrictive measures, the Council adopted a ban on engaging directly or indirectly in any transaction with any of the public entities listed in Annex XIX. It is also prohibited to engage directly or indirectly in any transaction with:
- an entity established outside the EU of which more than 50% of the ownership rights are held directly or indirectly by an entity listed in Annex XIX;
- an entity acting for or under the direction of a listed entity, or an entity more than 50% owned by a listed entity.
This measure will have a major impact on trade, since any transaction with a Russian public entity as defined in Article 5 bis bis of the newly inserted Regulation (EU) 833/2014 will be prohibited, with only a few exceptions listed by the Council. .
Restrictive measures concerning Belarus
In addition, the Council adopted restrictive measures against Belarus, similar to those in force against Russia. These restrictive measures include:
- A ban, as of March 20, 2022, on providing specialized financial messaging (which include SWIFT (Society of Worldwide Interbank Financial Telecommunications) to the 3 Belarusian banks listed below or to any legal person, entity or body established in Belarus of which more than 50% of the property rights are held directly or indirectly by one of these banks. Listed banks are:
- Belagrom Bank,
- Dabrabyt Bank,
- Development Bank of the Republic of Belarus.
- A ban on transactions concerning the management of the reserves or assets of the Central Bank of Belarus, including transactions with any legal person, entity or body acting on behalf of or at the direction of the Central Bank of Belarus.
- Prohibition, as of April 12, 2022, of listing and providing services on trading venues registered or recognized in the EU for the securities of any legal person, entity or body established in Belarus and held for more than 50% by the public.
- A ban on providing public funding or financial assistance to Trade with or investment in, Belarus.
- A ban on accepting everything deposits Belarusian nationals or natural persons residing in Belarus, or entities established in Belarus if the value of deposits per credit institution exceeds 100,000 euros.
- Prohibition for EU central securities depositories to provide services for securities issued after 12 April 2022 to any Belarusian national or individual resident in Belarus or to any legal person, entity or body established in Belarus.
- A prohibition on the sale of transferable securities denominated in euros issued after April 12, 2022, or units of undertakings for collective investment offering exposure to these transferable securities, to any Belarusian national or natural person residing in Belarus or to any entity established in Belarus.
- A ban on the sale, supply, transfer or export of euro banknotes to Belarus or to any person or entity in Belarus, including the government and the Central Bank of Belarus, or for use in Belarus.
For more details regarding the restrictive measures against Belarus, please refer to our previous newsflash on the subject.