Newsletter No.15 / 12 April 2022
By Paris Grozakis
Fifth Package of EU Sanctions against Russia
Due to the continuing war in Ukraine, the European Commission on the 8th of April 2022 has adopted the fifth package of restrictive sanctions against the Russian Federation and Belarus. Along with the four previous packages of sanctions, the restrictive measures introduced aim to increase the economic pressure on Russia and destabilize its ability to finance its military action in Ukraine. The fifth package contains, inter alia, restrictions on the following:
1) Coal imports ban:
A prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia. This ban amounts to an annual revenue loss of approximately €8 billion for Russia.
2) Further Financial Measures:
i) A full transaction ban and asset freeze on four Russian Banks namely VTB, Novikombank, Sovcombank, and Otkritie Bank representing 23% of the market share in Russian banking sector.
ii) In addition, the Commission adopted measures to prohibit the provision of crypto-asset wallets to Russian nationals, residents, and legal persons, if the total value of crypto-assets exceeds the amount of €10.000. Furthermore, it is prohibited to accept deposits from such persons if the total value of the deposit per credit institution exceeds the amount of €100.000. The aforesaid do not apply to nationals of a Member State, of a country member of the European Economic Area or of Switzerland, or to natural persons having a temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland and to deposits which are necessary for non-prohibited cross-border trade in goods and services between the EU and Russia.
iii) Moreover, it shall be prohibited to register, provide a registered office, business, or administrative address as well as management services to, a trust or any similar legal arrangement having as a trustor or a beneficiary being a Russian national, resident, or legal person. Also, from the 10th of May 2022 it shall be prohibited to act or arrange for another person to act as as a trustee, nominee shareholder, director, secretary, or a similar position, for a trust or similar legal arrangement as referred above. However, the aforesaid restrictions do not apply in cases where the trustor or beneficiary is a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State.
3) Transport:
i) A full ban on Russian and Belarusian freight road operators working in the EU with applying exemptions on essentials such as agricultural and food products, humanitarian aid and energy.
ii) A prohibition to provide access into EU ports to Russian-flagged vessels with exemptions for medical, agricultural and food products, energy and for humanitarian purposes.
4) Export Bans:Additional targeted export bans were introduced in areas in which Russia is highly dependent on EU supplies, including inter alia quantum computing, advanced semiconductors, sensitive machinery, transportation, chemicals, jet fuel and fuel activities.
5) Import Bans:Further import bans have been introduced on goods such as cement, rubber products, wood, spirits including vodka, liquor, high-end seafood including caviar, and an anti-circumvention measure against potash imports from Belarus. These additional import bans are estimated to the amount of €5.5 billion.
6) Excluding Russia from public contracts and European money:
i) It is fully prohibited to Russian nationals and entities to participate in procurement contracts in the EU, with certain exceptions that may be granted by competent authorities in the absence of a viable alternative.
ii) Restriction on financial and non-financial support to Russian publicly owned or controlled entities under EU, Euratom and Member State programmes (i.e., Horizon 2020, Horizon Europe, Euratom, and Erasmus+).
iii) The fifth package of measures is also addressing various overlaps on export restrictions and other provisions, and it is also extending to all official EU currencies the prohibitions on the export of banknotes and on the sale of transferable securities.
Sources:
- Council Regulation (EU) 2022/576 of 8 April 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine,
- Council Regulation (EU) 2022/577 of 8 April 2022 amending Regulation (EC) No 765/2006 concerning restrictive measures in view of the situation in Belarus and the involvement of Belarus in the Russian aggression against Ukraine
- European Commission Press Release - EU agrees fifth package of sanctions against Russia (europa.eu)
