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July 25, 2022 – On July 21, 2022, the European Union (“EU”) released a “maintenance and alignment” package of restrictive measures (sanctions) against Russia “in response to Russia’s continuing war of aggression against Ukraine.” The new sanctions are “intended to tighten existing economic sanctions targeting Russia, perfect their implementation and strengthen their effectiveness.” The new measures were imposed through five Council Regulations and four Council Decisions.
1. Individual restrictive measures
On July 21, 2022, the EU added 48 Russian individuals and nine entities, including Sberbank, to its restricted parties list through Council Implementing Regulation 2022/1270 and for their actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
The EU also added six Syrian individuals and one entity to its restricted parties list through Council Implementing Regulation 2022/1274 for their involvement in the recruitment of Syrian mercenaries to fight in Ukraine alongside Russian troops.
In total, as of today, 1212 individuals and 108 entities have been added to the EU restricted parties list under the Russian program in respect of actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine.
The EU finally designated four individuals and one entity pursuant to Council Implementing Regulation 2022/1275, under the Syrian program, for their support, including military support, to the Russian Federation’s unprovoked and unjustified military aggression against Ukraine.
Newly-designated individuals and entities are subject to an asset freeze and a prohibition from making funds and economic resources available to them, as well as, for individuals, a travel ban in the EU as of July 21, 2022.
New and amended derogations
Pursuant to Council Regulation 2022/1273 competent authorities may now authorize the release of certain frozen funds or economic resources, or the making available of certain funds or economic resources, after having determined that these funds or economic resources are:
The EU also adopted a new derogation providing that the competent authorities may authorize the release of certain economic resources (but not frozen funds) after having determined that they are necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment and provided the proceeds resulting from the release of such economic resources are frozen.
The EU finally extended the derogation relating to the sale and transfer of proprietary rights in an entity established in the Union where those proprietary rights are directly or indirectly owned by an individual or an entity subject to asset freeze measures, provided the proceeds of such sale and transfer remain frozen. While such sale or transfer previously had to take place by October 9, 2022, the new deadline is December 31, 2022, or within six months from the date of listing as subject to asset freeze measures.
Strengthening of the reporting requirements
Reporting requirements were reinforced for targets of asset freeze measures, EU operators and competent authorities, through Council Regulation 2022/1273.
In order to ensure the effective and uniform implementation of Council Regulation 269/2014, and in view of the increasing complexity of sanction evasion schemes, the EU imposed a new obligation on designated individuals and entities with assets within the jurisdiction of a Member State to report these assets (belonging to, owned, held or controlled by them) before September 1, 2022 or within six weeks from the date of their listing, and to cooperate with the competent authority in the verification of this reporting. Failing to do so would constitute a circumvention of the asset freeze measures imposed on them and would be subject to penalties if the conditions for such penalties are met under applicable national rules and procedures.
With a view to preventing the breach and circumvention of the asset freezes, the EU also strengthened the reporting requirements for EU operators. They now must supply immediately any “information held about funds and economic resources within Union territory belonging to, owned, held or controlled by natural or legal persons, entities or bodies listed [as subject to asset freeze measures] and which have not been treated as frozen by the natural and legal persons, entities and bodies obliged to do so” to their competent authority.
Finally, competent authorities of the Member States are now required to process and exchange information with other competent authorities of the Member States and the European Commission. This obligation applies to enforcement authorities and administrators of official registers wherein natural persons, legal persons, entities, and bodies as well as immovable or movable property are registered.
Prohibition to engage with listed Russian state-owned entities
With a view to avoiding any potential negative consequences notably for food and energy security around the world, the EU, through Council Regulation 2022/1269 amending Council Regulation 833/2014, decided to extend the exemptions from the prohibition to engage in transactions with state-owned entities listed in Annex XIX of Council Regulation 833/2014 and certain of their affiliates:
2. Trade sanctions
Continuing its efforts to target Russia’s most significant economic sectors, the EU introduced, through Council Regulation 2022/1269 amending Council Regulation 833/2014, a new import ban on Russian gold, extended the list of controlled “advanced technology,” brought a number of clarifications to existing measures and added new exemptions and derogations to several prohibitions to export, sell, supply, or transfer certain controlled items.
Aviation and Space Sector
Items that could contribute to the enhancement of Russian industrial capacities
3. Financial sanctions
Restrictions on deposits
Services provided by Union central securities depositories
4. Sanctions targeting the Maritime Sector
5. Other sanctions
6. EU FAQs
Since June 13, the European Commission issued a consolidated version of its FAQs, last updated on July 13 2022, on the implementation of Council Regulation 833/2014 and 269/2014 on its dedicated webpage.
The list of national competent authorities for the implementation of EU restrictive measures was also updated on July 4, 2022.