Ukraine crisis - Current status of sanctions against Russia

This is an overview of the current status of EU measures, with more focus on sanctions relevant to the financial sector/insurance (mediation) services. The summary includes the sanctions imposed in 2014 against Russia and Crimea, which are still in effect, and the sanctions most recently imposed in February of 2022 which are again in addition to the sanctions in place and targeted towards Russia and the occupied Donetsk and Luhansk regions.

1. Sanctions against private individualsEU sanctions prohibit any direct or indirect economic interactions (prohibition of payment and provision of services) with listed persons, as well as with all companies in which a listed legal entity or natural person has an ownership interest of 50% or more.

In addition, this applies to companies controlled directly or indirectly by sanctioned persons or to those where these persons may exercise a dominant influence.

The list of persons against whom financial actions apply was extended several times by Executive Order 2022/260 (listing 21 natural persons, two banks and one company) and Executive Order 2022/261 (listing 335 Duma deputies) of 23. February 2022, as well as on February 25 with Decree 2022/332, against 99 additional natural persons, including No. 670 Russian Foreign Minister Sergey Lavrov as well as No. 699 Russian President Vladimir Putin.

The following activities are examples of EU’s prohibition on payment and provision of services:

Transfers of funds
Sale of goods
Provision of services
Management of assets
Provision of other economic resources, e.g.:
- Cash, checks, monetary claims
- Deposits with financial institutions
- Publicly and privately traded securities and debt instruments including.
- Stocks and shares
- Interest, dividends, or other income
- Loans, guarantees
- Bank guarantees
- Documents containing indicia of participation in funds
- etc.

2. Sanctions against Legal Entities

In addition to natural persons, selected legal entities have also been sanctioned by the EU. These sanctions – analogous to the sanctions for natural persons – prohibit direct or indirect economic interaction in the form of a prohibition on payment and provision of services (see non exhaustive list above). The assets of the listed legal entities in the EU will be frozen.

Several Russian banks are excluded from the international payment system SWIFT. All those already sanctioned in the past are affected by said SWIFT exclusion. Further financial institutions and banks could be excluded from SWIFT.
Ban on transactions with and freezing of the Russian Central Bank’s assets within the EU and G7 countries, no more transactions possible within the EU.
European airspace ban on Russian aircraft.
Media companies such as Sputnik, Russia Today and their subsidiaries are restricted in their activities in the EU.
Sanctions against Belarus: EU import ban on Belarusian products such as minerals fuels, tobacco, wood, cement, iron and steel, and personal sanctions.

3. Sectoral Sanctions

- Military goods embargo
  
  The direct/indirect export, supply, sale of military equipment and other defense material to Russia is prohibited. Also prohibited are technical assistance and brokering services, as well as financing the supply.

- Export ban for dual use goods
  
  Prohibited direct/indirect supply/export/sale of listed dual use items (Annex I of Dual Use Regulation 2022/328), irrespective of their civilian or military use, with or without origin in the Union. Dual use goods are designed or suitable for both civilian and military purposes.

- Prohibition of payment, provision of services and direct/indirect supply/export/sale of goods and technology different from listed dual use items
  
  General electronics, computers/electronic assemblies, telecommunications and information security, sensors and lasers, navigation and avionics, marine and aeronautical, and space and propulsion equipment therefor with technical performance capabilities different from listed dual use items.

- Export ban on certain oil equipment goods
  
  The indirect/direct supply/export/sale of goods and technology, whether originating in the Union or not, which can be used for oil refining, directly or indirectly to or for use in Russia shall be prohibited. The prohibition also applies to technical assistance, brokering services, and financing or financial assistance related thereto, whether directly or indirectly.

- Export ban on aircraft and spacecraft, parts thereof, and technical and financial assistance and (re)insurance related thereto.

Extensive Restrictions of the EU capital market

For instance, the exclusion of certain Russian banks and military and oil industry companies from EU capital market.

In addition to the previous prohibitions on buying, selling, brokering, providing investment services or ancillary services, directly or indirectly, transferable securities and money market instruments with a maturity of more than 30 days from Russian banks listed in Annex III to Regulation 833/2014 (SBER Bank, VTB Bank, VEB Bank, GAZPROM Bank, ROSSELKHOZ Bank), on or after 12 April 2022, also applicable to Alfa Bank, Bank Otkritie, Bank Rossiya and Promsvyazbank), as well as for Russian companies in the military and oil industries (Almaz-Antey Kamaz Sea Trading Port, Novorossiysk Rostec, Russian Railways, JSC PO Sevmash Sovcomflot and United Shipbuilding Corporation).

4. Regional Sanctions in Ukraine

Sanctions in relation to Crimea and Sevastopol

Import ban on goods originating in Crimea or Sevastopol effective from June 2014: the EU prohibits the import of all goods originating in Crimea or Sevastopol and financing and insurance/reinsurance related to them.

As of December 20, 2014, further prohibition applies on export of certain goods and technology listed in Regulation 692/2014 Annex II to natural or legal persons, entities or bodies in Crimea or Sevastopol or for use therein. Similarly, the sale, supply, transfer of these goods and related direct or indirect technical assistance, brokering services, financing are prohibited.

Sanctions against the Donetsk and Luhansk regions and in response to the deployment of Russian forces to the regions

- Ban on Import
  
  The import of goods originating in the Donetsk and Luhansk regions not controlled by the Ukrainian government is prohibited as of February 24, 2022. It is also prohibited to provide, directly or indirectly, financing or financial assistance, as well as insurance and reinsurance, for the import of these goods. The prohibition does not apply to goods originating in these territories, if the goods are provided to and have been inspected by the Ukrainian authorities and a certificate of origin has been issued by the Ukrainian government.

- Ban on new investments
  
  Prohibited from acquiring real estate, facilities, securities of a participating nature, or shares in the foregoing, or expanding existing investments thereof. Prohibited from providing financing to entities, establishing joint ventures with entities, and providing investment services thereto in the non-Government-controlled Donetsk and Luhansk Oblasts.

- Export ban on goods in the fields of transport, telecommunications, energy, prospecting, exploration and extraction of oil, gas and mineral resources

- Prohibition on provision of technical assistance or intermediary services, construction or engineering services for infrastructure
  
  The competent national authorities (in Austria: BMEIA) may, by way of derogation from the above prohibitions on new investment, export of goods and provision of technical and financial assistance, make exceptions for humanitarian reasons or to ensure the security of existing infrastructure.

Tourism activities

Prohibition on providing services directly related to tourism activities in the occupied Donetsk and Luhansk regions.

Please note that this information has been compiled based on the sanction regime valid from week 09, 2022, and that there may be amendments at any time when the crisis worsens. We will keep you updated on further developments.

Source: Andreas Krebs; Current status of sanctions against Russia and certain Ukrainian territories (March 5th, 2022), URL: https://www.greco.services/en/news/ukraine-sanctions-russia-2022.html (March 7th, 2022)

Ukraine crisis – Current status of sanctions against Russia

1. Sanctions against private individualsEU sanctions prohibit any direct or indirect economic interactions (prohibition of payment and provision of services) with listed persons, as well as with all companies in which a listed legal entity or natural person has an ownership interest of 50% or more.

In addition, this applies to companies controlled directly or indirectly by sanctioned persons or to those where these persons may exercise a dominant influence.

The following activities are examples of EU’s prohibition on payment and provision of services:

Transfers of funds

Sale of goods

Provision of services

Management of assets

Provision of other economic resources, e.g.:

Cash, checks, monetary claims

Deposits with financial institutions

Publicly and privately traded securities and debt instruments including.

Stocks and shares

Interest, dividends, or other income

Loans, guarantees

Bank guarantees

Documents containing indicia of participation in funds

etc.

2. Sanctions against Legal Entities

Several Russian banks are excluded from the international payment system SWIFT. All those already sanctioned in the past are affected by said SWIFT exclusion. Further financial institutions and banks could be excluded from SWIFT.

Ban on transactions with and freezing of the Russian Central Bank’s assets within the EU and G7 countries, no more transactions possible within the EU.

European airspace ban on Russian aircraft.

Media companies such as Sputnik, Russia Today and their subsidiaries are restricted in their activities in the EU.

Sanctions against Belarus: EU import ban on Belarusian products such as minerals fuels, tobacco, wood, cement, iron and steel, and personal sanctions.

3. Sectoral Sanctions

Military goods embargo

The direct/indirect export, supply, sale of military equipment and other defense material to Russia is prohibited. Also prohibited are technical assistance and brokering services, as well as financing the supply.

Export ban for dual use goods

Prohibited direct/indirect supply/export/sale of listed dual use items (Annex I of Dual Use Regulation 2022/328), irrespective of their civilian or military use, with or without origin in the Union. Dual use goods are designed or suitable for both civilian and military purposes.

Prohibition of payment, provision of services and direct/indirect supply/export/sale of goods and technology different from listed dual use items

General electronics, computers/electronic assemblies, telecommunications and information security, sensors and lasers, navigation and avionics, marine and aeronautical, and space and propulsion equipment therefor with technical performance capabilities different from listed dual use items.

Export ban on certain oil equipment goods

Export ban on aircraft and spacecraft, parts thereof, and technical and financial assistance and (re)insurance related thereto.

Extensive Restrictions of the EU capital market

For instance, the exclusion of certain Russian banks and military and oil industry companies from EU capital market.

4. Regional Sanctions in Ukraine

Sanctions in relation to Crimea and Sevastopol

Import ban on goods originating in Crimea or Sevastopol effective from June 2014: the EU prohibits the import of all goods originating in Crimea or Sevastopol and financing and insurance/reinsurance related to them.

Sanctions against the Donetsk and Luhansk regions and in response to the deployment of Russian forces to the regions

Ban on Import

Ban on new investments

Export ban on goods in the fields of transport, telecommunications, energy, prospecting, exploration and extraction of oil, gas and mineral resources

Prohibition on provision of technical assistance or intermediary services, construction or engineering services for infrastructure

The competent national authorities (in Austria: BMEIA) may, by way of derogation from the above prohibitions on new investment, export of goods and provision of technical and financial assistance, make exceptions for humanitarian reasons or to ensure the security of existing infrastructure.

Tourism activities

Prohibition on providing services directly related to tourism activities in the occupied Donetsk and Luhansk regions.

Please note that this information has been compiled based on the sanction regime valid from week 09, 2022, and that there may be amendments at any time when the crisis worsens. We will keep you updated on further developments.