Sanctions development during the weekend with respect to the Russian invasion of Ukraine

The EU imposed further comprehensive sanctions on Friday, in response to the situation in Ukraine. These include e.g. additional listing sanctions and new sanctions targeting the Russian defense/technology, finance, energy, aviation & space sectors. Below are further details on the recent developments.

In addition, further sanctions have been announced following an informal meeting between the EU foreign ministers last night. This will include cutting a number of Russian banks from the SWIFT system. An outline of the sanctions that were announced after yesterday's meeting follows further down.

Please note that these updates do not provide an exhaustive description of all sanctions in place, and they may not be construed as legal advice. Any person or entity involved in business activities in any way related to Russia, should carefully assess whether and how they are affected by the new sanctions. Schjødt's sanctions team is ready to assist in this regard.

• New prohibition regarding public financing or financial assistance
  
  
  • It is prohibited to provide public financing or financial assistance for trade with, or investment in, Russia, except for:
    
    
    • Binding financing or financial assistance commitments established prior to 26 February 2022; or
    
    
    • Provision of public financing or financial assistance up to the total value of 10 000 000 EUR per project to small and medium-sized enterprises established in the EU; or
    
    
    • Provision of public financing or financial assistance for trade in food, and for agricultural, medical or humanitarian purposes.
    
    
  
  
  



• Increased restrictions regarding transferable securities and money-market instruments
  
  
  • In addition to current restrictions, it is prohibited to directly or indirectly purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with any transferable securities and money market instruments issued after 12 April 2022 by:
    
    
    • Sberbank,
    
    
    • VTB Bank,
    
    
    • Gazprombank,
    
    
    • Vnesheconombank (VEB)
    
    
    • Rosselkhozbank, Alfa Bank
    
    
    • Bank Otkritie
    
    
    • Bank Rossiya
    
    
    • Promsvyazbank
    
    
    • OPK Oboronprom,
    
    
    • United Aircraft Corporation
    
    
    • Uralvagonzavod
    
    
    • Rosneft,
    
    
    • Transneft
    
    
    • Gazprom Neft
    
    
    • Almaz—Antey, Kamaz
    
    
    • Novorossiysk Commercial Sea Port
    
    
    • Rostec (Russian Technologies State Corporation)
    
    
    • Russian Railways
    
    
    • JSC PO Sevmash
    
    
    • Sovcomflot and
    
    
    • United Shipbuilding Corporation.
    
    
  
  
  

The prohibitions extend to persons and entities established outside the EU, directly or indirectly, owned for more than 50% by any of these institutions, as well as any entities/persons acting on their behalf.

• As of 12 April 2022, it will be prohibited to list and provide services on trading venues registered or recognised in the EU for the transferable securities of any legal person, entity or body established in Russia and with over 50 % public ownership.


• Increased restrictions regarding loans or credit
  
  
  • It is now prohibited to directly or indirectly make or be part of any arrangement to make new loans or credit to any person, entity or body named above.
  
  
  • Note that exemptions apply.
  
  



• New prohibition against deposits from Russian persons and entities
  
  
  • It is prohibited to accept any deposits from Russian nationals or natural persons residing in Russia, or legal persons, entities or bodies established in Russia, if the total value of deposits of the natural or legal person, entity or body per credit institution exceeds 100 000 EUR.
  
  
  • Note that exemptions apply.
  
  

• New prohibition for EU central securities depositories to provide services
  
  
  • EU central securities depositories are prohibited from providing any services as defined in the Annex of Regulation (EU) No 909/2014 (the regulation on improving securities settlement in the EU and on central securities depositories) for transferable securities issued after 12 April 2022 to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia. This includes core services, banking-type ancillary services and non-banking-type ancillary services (as described in the Annex)
  
  
  • Note that exemptions apply.
  
  

• New prohibition against selling euro denominated transferable securities
  
  
  • It shall be prohibited to sell euro denominated transferable securities issued after 12 April 2022 or units in collective investment undertakings providing exposure to such securities, to any Russian national or natural person residing in Russia or any legal person, entity or body established in Russia.
  
  
  • Note that exemptions apply.
  
  

• New reporting obligation for credit institutions
  
  
  • Credit institutions shall:
    
    
    • supply to the national competent authority of the EU Member State where they are located or to the Commission by no later than 27 May 2022, a list of deposits exceeding 100 000 EUR held by Russian nationals or natural persons residing in Russia, or by legal persons, entities or bodies established in Russia. They shall provide updates regarding the amounts of such deposits every 12 months; and
    
    
    • supply to the national competent authority of the Member State where they are located information on deposits exceeding EUR 100 000 held by Russian nationals or natural persons residing in Russia who have acquired the citizenship of a Member State or residence rights in a Member State through an investor citizenship scheme or an investor residence scheme.
    
    
  
  
  

ENERGY SECTOR:

• New prohibition regarding goods and technologies suited for oil refining
  
  
  • It is now prohibited to provide – directly or indirectly –certain goods and technology suited for use in oil refining to any person, entity or body in Russia or for use in Russia. This extends to technical assistance, brokering services, other services, as well as financing and financial services related to such goods and services.
  
  
  • The prohibited goods/technology is listed in a separate annex, and includes g. hydrogen generation, recovery and purification technology.
  
  
  • Note that exemptions apply.
  
  

AVIATION & SPACE SECTORS:

• New prohibition regarding goods and technology suited for use in aviation or the space industry
  
  
  • It is prohibited to provide, directly or indirectly, aircrafts, spacecrafts, and parts thereof (CN codes 88) to any person, entity or body in Russia or for use in Russia. This extends to technical assistance, brokering services, other services, as well as financing and financial services related to such goods and services.
  
  
  • It is prohibited to provide insurance and reinsurance, directly or indirectly, related to such goods/technology.
  
  
  • It is prohibited to provide any one or any combination of the following activities: Overhaul, repair, inspection, replacement, modification or defect rectification of an aircraft or component, with the exception of pre-flight inspection, in relation to aircrafts, spacecrafts, and parts thereof, directly or indirectly, to any natural or legal person, entity or body in Russia or for use in Russia.
  
  
  • Note that exemptions apply.
  
  

DEFENCE SECTOR (DUAL-USE)

• Increased restrictions on dual-use goods and technology (i.e. goods/technology that can be used for both military and civil applications):
  
  
  • It is now prohibited to provide – directly or indirectly – dual-use goods and technology to any person, entity or body in Russia or for use in Russia. This extends to technical assistance, brokering services, other services, as well as financing and financial services related to dual-use goods and services.
  
  
  • The same aforementioned prohibitions also extend to goods and technology which might contribute to Russia’s military and technological enhancement, or the development of the defence and security sector, as listed in a new Annex VII.
  
  
  • Note that exemptions apply.
  
  

ADDITIONAL PERSONS LISTED AND CHANGE IN VISA POLICY

• Several new persons have been added to the blocking/freezing sanctions lists, including:
  
  
  • Remaining members of the State Duma (i.e. the ones not listed under the previous sanctions packages),
  
  
  • Members of the Russian Security Council (members include top state officials – including the President and the Minister of Foreign Affairs – as well as heads of defence and security agencies), and
  
  
  • Persons who facilitated the Russian military aggression from Belarus.
  
  



• Change in visa policy: Russian officials and business people will no longer be able to benefit from visa facilitation provisions allowing privileged access to the EU.

In addition to the above, the EU Commissioning and the High Representative of the Union for Foreign Affairs and Security Policy proposed new sanctions this weekend. Following an informal meeting between the EU foreign ministers last night, the High Representative of the Union for Foreign Affairs announced that they agree on imposing the following new sanctions:

• Cutting of a number of Russian banks from the SWIFT system;


• Ban the transactions of the Russian Central Bank and freeze all its assets;


• Target the assets of Russian oligarks;


• Shutting down the EU airspace for Russian-owned, Russian registered or Russian-controlled aircraft;


• Ban the state-owned media entities, Russia Today and Sputnik, including their subsidiaries, from broadcasting in the EU;


• Additional sanctions against Belarus, including targeting key business sectors.

Save for the flight ban, which was formally adopted already this morning, these new sanctions have not yet been formally adopted, and the EU is working to prepare the legal instruments. According to the announcements, the new packages have been prepared in coordination with G7 countries.

In a press conference last night, the Norwegian government also confirmed that Norway is preparing the legal instruments to implement sanctions in line with EU's sanctions.

According to news reports, Russia has announced that they will consider responding with sanctions or similar measures of their own. However, further details have yet to be provided.