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Peterka & Partners: Twelfth Package of EU Sanctions on Russia as of 18 December 2023

On 18 December 2023, the EU published its latest sanctions package against Russia. Our summary of the main measures introduced by this package is presented below.

Import related restrictions

A ban on the direct or indirect import, purchase or transfer of diamonds from Russia has been introduced . The ban applies to diamonds originating in Russia, diamonds exported from Russia, diamonds transiting Russia and Russian diamonds when processed in third countries.

The ban on diamonds and products incorporating diamonds exported from Russia or transited via the territory of Russia is applicable as of 1 January 2024. An indirect import ban of Russian diamonds when processed (i.e. cut and/or polished) in third countries, including jewellery incorporating diamonds originating in Russia, will be phased in progressively as of 1 March 2024 and be completed by 1 September 2024.

Technical assistance, brokering services or other services as well as financing or financial assistance related to diamonds and jewellery as above are also covered by the ban.

Further restrictions on imports of goods which generate significant revenues for Russia have been introduced , such as pig iron and spiegeleisen, copper wire, aluminium wire, foil, tubes and pipes. Certain exceptions and transitional periods are provided for. A new import ban has been introduced on liquefied propane (LPG) with a 12 month transitional period.

The amendments introduce the possibility for the competent authorities of the Member States to allow the import of goods which are intended for the strict personal use of natural persons travelling to the Union or of their immediate family members, limited to personal effects owned by those individuals and which are manifestly not intended for sale.

Export related restrictions

The new package expands the list of restricted items which contribute to Russia’s military and technological enhancement or to the development of its defence and security sector by adding items which have been used by Russia in its war against Ukraine and items which contribute to the development or production of its military systems, including chemicals, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles, machine tools and machinery parts.

In addition, there are new export bans on EU industrial goods, aimed at further weakening Russia’s industrial capacities , including machinery and parts, construction related goods, processed steel, copper and aluminium articles, batteries, and lasers.

The existing prohibition on the provision of services will be extended to cover the provision to the Government of Russia or legal persons, entities or bodies established in Russia of software for the management of enterprises and software for industrial design and manufacture.

Enforcement and anticircumvention measures

The package contains a requirement for notifications of transfers of funds exceeding 100 000 EUR out of the EU from EU entities directly or indirectly owned for more than 40% by Russian nationals or residents or entities established in Russia. This requirement shall apply as of 1 May 2024. Special reporting provisions are also envisaged for credit and financial institutions that will apply as of 1 July 2024.

The amendments introduce tighter compliance rules to support the implementation of the oil price cap and address circumvention as well as a strengthened information sharing mechanism that should allow better identification of vessels and entities carrying out deceptive practices, such as ship to ship transfers used to conceal the origin or destination of cargo and AIS manipulations, while transporting Russian crude oil and petroleum products.

The package further introduces limitations and notification obligations with respect to sales and transfers of tankers for the transport of crude oil or petroleum products.

"No Russia clause"

By virtue of this lates t package, w hen selling, supplying, transferring or exporting to a third country with the exception of pa rtner countries sensitive goods and technology under Annexes XI, XX and XXXV to Regulation (EU) No 833/2014, common high priority items, or firearms and ammunition as listed in Annex I to Regulation (EU) No 258/2012 , exporters shall be obliged to prohibit contractually reexportation to Russia and re exportation for use in Russia . This rule shall be applicable as of March 2024. In application of the said rule, exporters shall also ensure that the agreement with the third country counterpart contains adequate remedies in the event of a breach of the contractual obligation.

Individual listings

In addition to economic sanctions, a substantial number of individuals and entities have been added to the lists of personal sanctions.

The information above reflects the status as of 18 December 2023.

No information contained in this article should be considered or interpreted in any manner as legal advice and/or the provision of legal services. This article has been prepared for the purposes of general information only. PETERKA & PARTNERS does not accept any responsibility for any omission and/or action undertaken by you and/or by any third party on the basis of the information contained herein.