Further transport restrictions and price cap on crude oil and petroleum products originating in or exported from Russia to third countries
The new package includes increased restrictions related to maritime transport to third countries of crude oil or petroleum products originating in or exported from Russia. As from June 2022, the regulations included a prohibition against provision of technical assistance, financial services etc. With the recent amendment, the regulations now generally prohibit such transport, including through ship-to-ship transfers, of crude oil (as of December 2022) and petroleum products (as of February 2023), but introduces an exemption based on a price cap derogation. The price cap derogation essentially allows such maritime transport (as related services) if the crude or petroleum product is purchased at or below a pre-established price cap.
The aforementioned price cap aims to stabilise the global energy prices, as well as drastically reduce the revenues Russia earns from oil after the war has inflated the global energy prices. The cap has however not yet been introduced (nor stipulated). The cap will be agreed in a Price Cap Coalition, which will consist of members from the G7 countries. The EU has stated that this coalition will conduct a technical exercise to consider a range of factors to reach international consensus on the level at which the price cap is set. The new prohibition against maritime transport does not enter into force until and if the EU Council unanimously agree to include such a cap in the appendix to Council Decision 2014/512/CFSP.
The price cap may be subject to later adjustments. In case of such adjustments, there will be a 90 days' grace period to carry out transport based on contracts concluded before the amended cap enters into force, and which were compliant with the then-prevailing price cap.
Furthermore, the previous prohibition against providing, directly or indirectly, technical assistance, brokering services or financing or financial assistance, related to maritime transport of Russian oil/petroleum products to third countries, generally remains in place. However, the exemptions from the prohibition have been amended, as it does not apply to the execution of contracts concluded before 4 June 2022, or of ancillary contracts necessary for the execution of such contracts until (a) 5 December 2022, for crude oil and (b) 5 February 2023, for petroleum products.
Finally, a significant new prohibition is introduced in the new regulations. This prohibition essentially entails that if a vessel has transported crude oil or petroleum products with a purchase price exceeding the applicable price cap, then it is thereafter prohibited for others to provide any of the aforementioned services (technical assistance, financial assistance, etc.) related to the transport of crude oil or petroleum products by that vessel. Hence, the prohibition effectively places part of the burden of enforcing the price cap restrictions on to the service companies, who will be responsible for "punishing" other persons' previous breach of the regulations.
Increased restrictions on import and export
The import bans have been extended to now also cover finished and semi-finished steel products (subject to transition period for some semi-finished products) that either originate or are exported from Russia. Import restrictions also cover other goods, such as certain machinery and appliances, wood pulp and paper, cigarettes, plastics and cosmetics, certain chemical products as well as certain goods and materials used in the jewellery industry.
The eighth sanctions package also includes the banning of the export of coal including coking coal, specific electronic components used in Russian weapons and specific goods used in the aviation sector. A prohibition on exporting small firearms, chemicals and other goods under the anti-torture Regulation has been added.
Restrictions regarding state-owned enterprises
EU nationals will furthermore be prohibited from holding any posts in the governing bodies of specific state-owned enterprises as from 22 October 2022. A ban is also in place for transactions with the Russian Maritime Register, which is a fully state-owned entity performing activities related to classification and inspection of Russian and non-Russian ships and crafts.
Financial, IT consultancy and other business services
Further services are added to the list of prohibited services. These comprise: architectural and engineering services, IT consultancy services and legal advisory services to the Russian government and legal persons established in Russia. The ban on the provision of crypto-asset wallets, accounts or custody services to Russian persons and residents is extended to apply regardless of the value of the crypto-assets.
Persons may be targeted by sanctions if they facilitate circumvention
The EU has introduced a new listing criterion that will allow it to add natural or legal persons who facilitate illegal circumvention of the sanctions, to the blocking/freezing sanctions list. This is a significant development, as it allows a potentially broad basis for the EU to impose sanctions of a secondary nature, by listing persons who are not directly linked to the destabilisation of Ukraine or annexation of Ukrainian territories (including also non-Russian persons and companies).
Additional listings of persons/entities
The package also comprises the sanctioning of several individuals and entities that played a role in the organisation of the so-called "referenda" in the occupied territories/oblasts of Donetsk, Luhansk, Zaporizhzhia and Kherson regions. In addition, individuals and entities working in the defence sector, companies supporting the Russian armed forces and well-known figures spreading disinformation about the war, are sanctioned.
Extension of restrictions to the oblasts of Zaporizhzhia and Kherson
The geographical scope of the restrictive measures in response to the recognition of the non-government controlled areas of the Donetsk and Luhansk regions of Ukraine has been extended to cover all the non-government controlled areas of Ukraine in the regions of Donetsk, Luhansk, Zaporizhzhia and Kherson. Any activities involving these areas are generally subject to increased restrictions.
Norway announces increased restrictions targeting Russian fishing vessels
As opposed to the EU sanctions, the Norwegian sanctions have until now contained an exemption allowing Russian fishing vessels access to Norwegian ports. However, this exemption will now be limited to three Norwegian ports for vessels that otherwise fulfil the requirements of the regulations (in essence vessels exceeding a particular size). Such vessels may now only in Kirkenes, Tromsø and Båtsfjord. The Norwegian government announced this in a press conference on Thursday 6 October, but any amendments to the Norwegian Sanctions Regulations have yet to be formally adopted.
Norway has currently not stated whether the Norwegian sanctions will be amended in accordance with EU's latest sanctions package. However, we expect Norway will follow suit, as we have not seen any indication of Norway deviating from its previous policy of adopting sanctions in line with the EU.
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Please note that these updates do not constitute legal advice, nor do they provide an exhaustive description of all sanctions in place and the exemptions. Any person or entity involved in business activities in any way related to Russia, Belarus or Ukraine should carefully assess how they are affected by the sanctions.
Our sanctions team offers guidance on the increasingly complex and frequently changing sanctions regulations, including how to ensure compliance with the same.