EU introduces a sixth package of sanctions.
On June 3, 2022, the EU adopted a sixth package of sanctions against Russia which includes economic, individual, media and diplomatic measures. (See the full text of the regulation here.)
These measures relate to the following key areas:
- Oil embargo
The package includes a ban on Russian oil imports, giving EU member states six months to phase out crude oil and eight months to phase out other refined petroleum products. Special temporary derogations have been agreed for Bulgaria, Croatia, and Czech Republic.
Oil supplied through a pipeline from Russia into a member state will continue to be permitted until the Council extends the prohibitions to such supply. (This is to ensure landlocked EU member states reliant on such oil can continue to receive it.) The onward transfer, transport or re-sale of such crude oil to other member states or to third countries is, however, prohibited from February 5, 2023 (with the exception of sales to Czech Republic which are currently allowed until December 5, 2023).
It is estimated that these sanctions will cut 92% of Russian oil trade into the EU by the end of this year.
The insurance and reinsurance of maritime transport of crude oil and certain petroleum products originating in or exported from Russia is also now prohibited (subject to certain wind down periods in accordance with the above).
Belinvestbank, Sberbank, Credit Bank of Moscow, and Russian Agricultural Bank have now all been delisted from the SWIFT system.
- Broadcasting suspension
The broadcasting (or facilitation of broadcasting) of content by Russian state-owned broadcasters, Rossiya RTR/RTR Planeta, Rossiya 24/Russia 24 and TV Centre International, is now prohibited in the EU. This is in addition to the restriction previously in place against Sputnik and Russia Today. (See previous briefing here.) In addition, EU companies will now be prohibited from advertising products or services in any content produced or broadcast by these entities.
The EU has expanded the list of prohibited goods and technology that may contribute to Russia’s military and technological enhancement, or the development of the defense and security sector. For details of the latest goods to be added, see Annex II of the new regulation here.
A license must be obtained before listed goods can be exported to, or for use in, Russia. The list of parties for which additional, more stringent, licensing requirements apply has also been expanded.
The provision of accounting, consulting and public relations services to Russian entities is now prohibited in the EU. There are a limited number of exceptions applying to services which are necessary in the context of legal representation. An exemption also exists for the provision of services to Russian subsidiaries of EU companies.
- Individuals and companies
The new EU package also expands the list of Russian and Belarussian individuals and companies facing asset freezes and travel bans. Sanctions have been imposed targeting military officials who are linked to killings in Bucha and Mariupol, industrial and technological enterprises, politicians and businesspersons, and their family members.
Further, on June 23, 2022, the EU renewed its existing sanctions relating to the annexation of Crimea and Sevastopol for another year (until June 23, 2023). There are restrictions on importing goods from these regions, engaging in trade and investment in certain sectors, and exporting certain goods and technologies.
Latest UK announcements and restrictions
On June 23, 2022, the UK issued a further amendment to its Russia Sanctions Regulations (amendment no. 10). The new measures include:
- Further export prohibitions
The export of goods and technology with potential internal repression uses, or that could be used for the production and development of chemical or biological weapons is now prohibited to Russia and/or the non-government controlled Ukrainian territory. Existing export prohibitions have also now been extended to cover maritime goods and technologies for the placing on board of a Russian-flagged vessel, and jet fuel and fuel additives. Related services are also restricted.
- Iron and steel
Restrictions on iron and steel products (introduced on April 14, 2022) have been extended. New prohibitions apply on the provision of technical assistance, financial services and funds, and brokering services related to such products (defined by way of reference to Schedule 3B).
- Interception and monitoring services
A new Chapter 4D prohibits the provision of interception and monitoring services to, or for the benefit of, the Government of Russia.
The export of banknotes (denominated in Sterling or any official currency of the European Union) to, or for use in, Russia is now prohibited (in line with existing EU measures).
- “Revenue generating goods”
A new chapter 4G and Schedule 3D has been added into the existing regulations, which lists so called “revenue generating goods.” The import or acquisition of such goods where originating or located in Russia is prohibited, as is the supply or delivery of such goods from Russia to the UK. Associated services and technical assistance are also now restricted.
A further 12 individuals were added to the UK asset freeze list on June 16, 2022, under the Russian sanctions regime, as well as a further three Russian entities listed under the Myanmar (Burma) regime for supplying Russian aircraft parts to the Myanmar Armed Forces.
On April 21, 2022, the UK Government announced that it was expanding the list of products facing import bans and increasing tariffs and bans on over £1bn of Russian goods. This was shortly followed by an announcement that the UK would cut tariffs on all goods from Ukraine to zero under the UK-Ukraine Free Trade Act. The measures are designed to hinder the Russian economy, while supporting Ukraine.
The UK Foreign Secretary announced a ban on the export of accountancy, management consultancy, and public relations services to Russia (UK services reportedly account for 10% of Russian imports in these sectors) on May 4, 2022. The text of the legislation imposing these restrictions is still awaited, as is the proposed implementation date.
The UK Business Secretary has commented:
[UK] professional services exports are extraordinarily valuable to many countries, which is exactly why we’re locking Russia out. By restricting Russia’s access to [the UK’s] world-class management consultants, accountants and PR firms, we’re ratcheting up economic pressure on the Kremlin to change course.
The announcement was accompanied by 63 new asset freeze designations, predominantly targeting Russian media organizations and propagandists.
On May 9, 2022, the Secretary of State for International Trade and the Chancellor of the Exchequer announced a new package of sanctions on Russia and Belarus targeting £1.7bn worth of goods. The sanctions include new import tariffs and export bans. New tariffs will rise up to 35% on products such as chemicals, platinum, and palladium.
On May 19, 2022, the UK Government also designated state-owned Aeroflot, Russia’s largest airline, Ural Airlines and Rossiya Airlines for the purposes of an asset freeze. These entities will now be unable to sell their unused, lucrative landing slots at UK airports.
The UK Office of Financial Sanctions Implementation has also published updated monetary penalty guidance (applicable from June 15, 2022), reflecting changes made to the UK enforcement regime by the Economic Crime Act. (See previous update here.)