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December 21, 2022 - On December 16, 2022, the European Union (“EU”) adopted a ninth package of restrictive measures (sanctions) against the Russian Federation (“Russia”) in response to its attacks “targeting civilians and civilian infrastructure, seeking to paralyse the country at the beginning of the winter.” This new package comes in addition to the EU import ban on Russian seaborne crude oil and of the oil price cap agreed with G7 partners and Australia, which apply as of December 5, 2022. The new sanctions include a series of measures intended to step up pressure on Russia and its government, and hit hard the Russian economy and abilities to continue its aggression.
The new measures were imposed through three Council Decision and three Council Regulations.
1. Individual restrictive measures
On December 16, 2022, the EU added 141 individuals and 49 entities to its restricted parties list through Council Implementing Regulation 2022/2476. The newly-listed individuals include, among others, members of the Russian armed forces, members of the State Duma and the Russian Federation Council, ministers, governors, and those deemed responsible for missile strikes against civilians, civilian critical infrastructure and the kidnappings and subsequent illegal adoptions of Ukrainian children. Newly-designated entities include two banks (Credit Bank of Moscow and JSC Dalnevostochniy Bank), as well as several defense and industrial companies, political parties, media holdings, and paramilitary groups.
On October 20, 2022 and on December 12, 2022, the EU had separately added seven individuals and five entities to its restricted parties list through Council Implementing Regulation 2022/1985 and Council Implementing Regulation 2022/2430 in view of Iran’s military cooperation with Russia and their role in the development and delivery of drones used by Russia in its war against Ukraine.
In total, as of today, 1386 individuals and 171 entities have been placed on the EU restricted parties list under the Russian program in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of 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 the date on which they were respectively added to the EU’s restricted parties list.
Extension of existing deadlines for derogations
Pursuant to Council Regulation 2022/2475, the deadlines for the use of certain derogations relating to divestments have been extended:
Pursuant to Council Regulation 2022/2475, the relevant enforcement authorities of the competent Member State (“National Competent Authorities”) may authorize the release of certain frozen funds or economic resources of, or the making available of certain funds or economic resources to:
2. State-owned entities
Council Regulation 2022/2474 added one entity to the list of State-owned entities subject to a transaction ban, introduced and amended exemptions and derogations to this transaction ban and introduced a new prohibition on holding posts in the governing bodies of non-listed State-owned or State-related entities.
Sanctions targeting the Russian Regional Development Bank and its affiliates
The Russian Regional Development Bank has been added to Annex XIX of Regulation 833/2014 (Part C). As a result, it is now prohibited to directly or indirectly engage in any transaction with (i) the Russian Regional Development Bank, (ii) any entity established outside the EU and more than 50% owned by the Russian Regional Development Bank, and (iii) entities acting on their behalf or at their direction.
New exemptions allow:
The wind-down period for joint ventures involving entities listed in Annex XIX of Regulation 833/2014 has been extended:
A derogation has been introduced to authorize certain divestments and withdrawal from EU entities by entities listed in Annex XIX of Regulation 833/2014:
Prohibition on holding posts in governing bodies
It will be prohibited as from January 16, 2023, to hold any posts in the governing bodies of (i) an entity established in Russia, which is publicly controlled or with over 50% public ownership, or in which Russia, its Government or Central Bank has the right to participate in profits or with which the latter has other substantial economic relationship, (ii) any entity established in Russia more than 50% owned by the aforementioned entities, and (iii) entities acting on behalf or at the direction of the aforementioned entities.
Derogations however empower National Competent Authorities to authorize the holding of such posts for:
3. Investments sanctions
Mining and quarrying sector
Council Regulation 2022/2474 extended the existing prohibitions targeting Russia’s energy sector (covered in a previous alert) to its mining and quarrying sector, defined as covering the location, extraction, management and processing activities relating to energy and non-energy producing materials.
4. Trade sanctions
Council Regulation 2022/2474 makes significant amendments to the list of items subject to import- or export-related restrictions, while also providing for new exemptions and/or derogations. In particular, a new derogation allows for EU entities to wind down or close their operations in Russia, while ensuring compliance with applicable trade controls.
Oil and petroleum products (import-related sanctions)
As noted in a previous alert, on June 3, 2022, the EU introduced a comprehensive import ban on Russian seaborne crude oil (CN 2709 00) and petroleum products (CN 2710), subject to certain transition periods and temporary exemptions and derogations. The ban targeting Russian crude oil (CN 2709 00) fully entered into force on December 5, 2022, along with the price cap mechanism on Russian crude oil.
Council Regulation 2022/2474 narrowed the scope of crude oil products subject to these restrictions and introduced new derogations, primarily to ensure the supply to Ukraine of petroleum products obtained from Russian crude oil in Bulgaria, Slovakia or Hungary after February 5, 2023.
Goods which generate significant revenues for Russia (import-related sanctions)
Iron and steel products (import-related sanctions)
Aviation and Space Sector (export-related restrictions)
Goods which contribute to the enhancement of Russian industrial capacities (export-related restrictions)
Defense sector (export-related restrictions)
New derogations for the winding down of activities in Russia (import and export-related restrictions)
Note that regarding derogations granted for goods and technologies listed in Annex VII to Regulation 833/2014 and Annex I to Regulation 2021/821, they should follow the new template provided in Annex IX of Regulation 833/2014.
Council Regulation 2022/2474 clarifies that National Competent Authorities should also inform other National Competent Authorities and the European Commission of any authorization granted under paragraph 5b of article 3ea (derogation from the prohibition on access to EU ports and locks for certain vessels that have changed their flags) within two weeks of the authorization, as was already the case for authorizations granted under paragraphs 5 and 5a.
6. Financial sector
7. Services restrictions
9. EU FAQs
Furthermore, a brief “questions and answers” memo on the ninth package is available on the European Commission’s website.