Sanctions update April 14

Sanctions update March 16, Sanctions Newsletter update 11 of March, Sanctions newsletter of 3 of March, Sanctions newsletter of 25 of February 

EU adopts a fifth sanctions package

On 8th April, EU issued two new Regulations amending Council Regulation 2014/833 significantly expanding the sanctions against Russia:

Council Regulation 2022/582

• 216 individuals and 18 entities are added to EUs asset freeze list. The list of individuals include Oleg Deparska who amongst other things, through EN+, is the owner of Sweden’s only aluminium plant Kubal
• The list of entities include four banks; Otkritie FC Bank, Novikombank, Sovcombank, VTB Bank. According to guidance provided by EU , if a bank is placed on the asset freeze list, funds of a non-listed person that are deposited in or even just transferred to a listed bank can be considered to be “held” by the listed bank. This means transfers from a listed bank should not be rejected nor should the funds be returned to the sender; instead, the funds should remain blocked in the EU bank. It is interesting to note that EU has not put Sberbank on its asset freeze list, in contrast to US and UK (see below).
• The asset freeze list now comprises of 1110 individuals and 83 entities

Council Regulation 2022/576

• Port access - access to ports in EU is blocked for vessels registered in Russia. Notably, Swedish Dockworkers Association has already imposed a wider ban against its member to work vessels that are owned or controlled by Russians or transporting Russian cargo, or transiting to or from Russia.
• Import – a wide variety of products listed in Annex XXI such as wood products, minerals, cement, furniture, potassium chloride and cruise ships that generate significant revenue to Russia is prohibited
• Import - coal and other solid fossil fuels listed in Annex XXII is prohibited
• Export - various chemicals, agents, fabrics and appliances listed in Annex XXIII that could contribute in particular to the enhancement of Russian industrial capacities is prohibited
• Export - the list in Annex VII in Regulation 2014/833 over products that contribute towards Russia’s military and technological enhancement is amended
• Export – the list in Annex VIII in in Regulation 2014/833 over products suited for use in oil refining is amended
• Export – the list in Annex XVII in Regulation 2014/833 over prohibited steel products is amended
• Export – the list in Annex XVIII in Regulation 2014/833 over prohibited luxury goods is amended
• Road transports - road transport companies established in Russia are prohibited to transport goods by road within EU, including transit
• Other – various prohibitions regarding cash deposits, crypto assets, transferable securities, bank notes public contracts, financial support and access to business addresses are introduced
  
  As to the import of wood products, EU has issued guidance as to whether woods used for packing is included in this type of prohibition. The note provides that it is the commercial object of the movement that is relevant and the prohibition applies to the product declared in customs for the considered procedure. For example, if copper cables coiled on wood spools are declared for release for free circulation, they are declared as copper cables and the prohibition on wood products does not apply.
  
  All prohibitions come with numerous exceptions and grace periods.
  
  Technically, sanctions are implemented by way of amending Council Regulation 2014/833, which was the first EU regulation on sanctions against Russia. The consolidated regulation is not yet published. In due course the consolidated regulation can be found here.
  
  

US sanctions

On 6th April, the US administration announced the following sanctions (the list may not be exhaustive):

• New investment in Russian by a United States person, wherever located is prohibited
• The exportation, re-exportation, sale, or supply, directly or indirectly, from the United States, or by a United States person, wherever located, of any category of services as may be determined by the Secretary of the Treasury, in consultation with the Secretary of State, to any person located in the Russian Federation; and
• Any approval, financing, facilitation, or guarantee by a United States person, wherever located, of a transaction by a foreign person where the transaction by that foreign person would be prohibited by this section if performed by a United States person or within the United States
• The addition of Sberbank and 42 subsidiaries to the SDN list
• The addition of Alfa Bank and six subsidiaries to the SDN list
  
  

UK sanctions

On 6th April, the UK administration announced the following sanctions (the list may not be exhaustive):

• asset freezes against Sberbank and Credit Bank of Moscow
• A ban on all new outward investment to Russia.
• From next week, the export of key oil refining equipment and catalysts will be banned
• A ban on imports of iron and steel products and export of UK’s quantum and advanced material technologies
• Addition of eight oligarchs to the asset freeze list
  
  

Given the extremely fast changing sanctions landscape, trade, as well as any business relationship with Russia and entities related to Russia, has become very complex. Companies are recommended to exercise extreme caution, review their operations and seek legal advice as necessary. In order to ensure business does not involve any listed entities (or entities owned or controlled by listed entities) sanctions screening should be made against the following lists:

EU - https://www.sanctionsmap.eu/#/main
UK - https://sanctionssearch.ofsi.hmtreasury.gov.uk/
USA - https://sanctionssearch.ofac.treas.gov/

Notably, and to much regret for Swedish companies, the Swedish data protection authority, IMY, interpret GDPR to the effect that a license is required to screen individuals against sanction lists that have no legal effect in Sweden which is all sanction lists save for EU and UN. Screening of companies does generally not trigger the application of GDPR.

Sanctions update March 16, Sanctions Newsletter update 11 of March, Sanctions newsletter of 3 of March, Sanctions newsletter of 25 of February