Latest update on the EU package of restrictive measures against Russia

Strengthening reporting

How are you strengthening reporting on asset freezes?

• For the first time, the EU requires that listed persons actively disclose all their assets within the EU’s jurisdiction to the national competent authority. This will help ensure that assets are traced and frozen much more effectively.
• Non-compliance with this obligation – i.e. non-reporting by listees – will be treated as a breach of EU sanctions law, with the consequences that follow under each Member State’s national legislation, including criminal ones.
• This comes in response to the increasing complexity of sanctions evasion schemes. We need to stay one step ahead of these attempts.

Possible effects of EU sanctions on the food sector

Are EU sanctions causing a food crisis?

• No. Contrary to Russia’s disinformation, growing food and nutrition insecurity is not caused by the sanctions, but by the Russian aggression against Ukraine, resulting in the disruption of agricultural production and trade, as well as spiking agricultural production and food prices.  On top of disrupting shipping in the Black Sea and hoarding its own produce, Russia is deliberately targeting key agricultural infrastructure across Ukraine, including grain silos, railways, food warehouses, and is blocking ports.
• EU sanctions do not target trade in agricultural and food products, (including wheat and fertilisers) between third countries and Russia. With the package adopted today, we have further clarified and reiterated this.
• As regards Ukraine, agricultural products can be imported into the EU from Ukraine and transferred to third countries. Even products from the non-government controlled areas of the Donetsk and Luhansk Oblasts can be imported, under certain conditions (if examined and approved by the Ukrainian authorities).
• Public financing or financial assistance for trade to Ukraine is not restricted either. Any EU company can invest and support agricultural production in Ukraine, except in the non-government controlled areas of the Donetsk and Luhansk Oblasts.
• The EU is taking extensive action to enable imports into and exports from Ukraine. Working with Member States, the Commission has established ‘Solidarity Lanes’ to ensure Ukraine can export grain and other agricultural produce, as well import the goods it needs, from humanitarian aid to animal feed and fertilisers.
• As regards Russia and third countries, food in Russia is not targeted by EU sanctions. EU sanctions do not prohibit EU businesses to purchase, import or pay for Russian wheat or other cereals, for example, provided that sanctioned persons or entities are not involved. With regards to designated persons and entities, a number of exceptions exist to avoid negative impacts. In order to avoid disruptions in the payment channels for agricultural products, Regulation (EU) 269/2014 introduces a derogation from the transaction ban, if necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers. Furthermore, an exemption clarified that transactions with certain state-owned enterprises (listed in Annex XIX of Regulation (EU) 833/2014) are allowed when necessary for medical, agricultural and food products.
• When restricted services are necessary for importing agricultural products from Russia (including via Belarus), EU sanctions provide for specific exceptions. For instance, EU Member States can authorise vessels flying the Russian flag to access EU ports, as well as allow Russian road transport companies to operate in the EU, if that is for trade in agricultural or food products (including wheat and fertilisers, if the latter is not otherwise restricted).
• Phytosanitary products (including herbicides, fertilisers and agricultural machineries) can be exported from the EU to Russia without restrictions, provided that no listed persons are involved. The cap and restrictions on certain fertilisers only apply to products imported into the EU and do not concern EU exports to Russia or Belarus.
• EU sanctions also envisage several clear and dedicated exceptions for humanitarian purposes. By way of example, EU Member States can authorise overflights of their airspace by Russian aircraft, if required for humanitarian purposes.
• EU asset freezes of specific Russian or Belarusian companies have minimum impact on the agricultural sector. EU sanctions target those responsible for the war against Ukraine. The listing of some persons owning or controlling companies in the Russian fertiliser sector does not prevent them from using their products in Russia. EU sanctions do not prevent operators from third countries to maintain commercial ties with Russia.
• The EU has activated all available tools to mitigate the negative consequences of Russia’s actions on third countries. We are in constant contact with the most exposed third countries. We do this in concert with other countries, such as our G7 partners.

Clarifications on the transaction ban with listed entities and state-owned enterprises

What is the exception to the transaction ban with certain state-owned enterprises?

• The objective of the exemption from the transaction ban is to enable transactions with entities listed in Annex XIX of Regulation (EU) 833/2014.
• With the latest package, a new exemption was introduced to clarify that transactions with entities in Annex XIX are allowed when necessary for oil, medical, agricultural and food products.
• This is in line with combatting the false narrative that EU sanctions cause food and energy insecurity around the globe. This is not the case – the insecurity is caused by the Russian aggression, resulting in the disruption of agricultural production and trade, as well as spiking agricultural production and food prices. None of the measures adopted today or adopted earlier in view of Russia’s aggression against Ukraine target in any way the trade in agricultural and food products (including wheat and fertilisers) between third countries and Russia.

Import ban on Russian gold

What does the gold ban cover?

• The G7 has agreed the necessity of co-ordinated action to further increase economic pressure on Russia. The gold ban will further align EU sanctions with those of our G7 partners.
• As of now, EU sanctions prohibit the direct or indirect import, purchase or transfer of gold, which constitutes Russia’s most significant export after energy.
• This prohibition applies to gold if it (i) originates in Russia and (ii) has been exported from Russia into the Union or to any third country after the entry into force of the Regulation. It does not apply to Russian-origin gold exported before the entry into force of the Regulation. Therefore, this prohibition does not apply to gold already held by central banks, investors, companies or pension funds across Member States.
• It applies only to gold listed in Annex XXVI, including gold plated with platinum, unwrought or in semi-manufactured forms, in powder form, waste and scrap of gold (including metal clad with gold but excluding sweepings containing other precious metals, and gold coins).
• The prohibition also applies to related financing and technical assistance, as well as processed gold, if it fulfils the conditions of Art. 3o paragraph 2 of Regulation (EU) 833/2014.
• Equally, it contains a ban to import, purchase or transfer, directly or indirectly, golden jewellery listed in Annex XXVII, if it (i) originates in Russia and (ii) has been exported from Russia into the Union after the entry into force of the Regulation. There is however an exemption for personal use, please see the question below. The prohibition does not apply to gold which is necessary for the official purposes of diplomatic missions, consular posts or international organisations in Russia enjoying immunities in accordance with international law.

Is gold jewellery included?

• Yes, import, purchase or transfer, directly or indirectly, into the Union, of golden jewellery originating in Russia and exported from Russia after the Regulation entered into force is prohibited.
• The prohibition however does not apply to jewellery for personal use of natural persons travelling to the European Union or to members of their immediate families travelling with them, as long as it is owned by those individuals and not intended for sale. The same exemption also applies to golden jewellery included in the luxury goods list in Annex XVIII of the Regulation (No) 833/2014.

Export restrictions

What are you doing with dual use export controls?

• The package includes revisions to export restrictions on sensitive dual-use and advanced technologies that will strengthen the effectiveness of the measures adopted in the six previous sanction packages. They will also further align the measures with those of international partners.
• The package includes adjustments to some exemptions and derogations (e.g. for exports related to cyber and information security), proposed in light of the experience gained in the application of the sanctions, that will support the work of the competent authorities and ensure that all relevant transactions are duly controlled.
• The list of advanced technology items targeted in Annex VII of Regulation (EU) 833/2014, banned from export to Russia, has been expanded to include 50 additional items, including special materials and related equipment (i.a., special fibres, used in aircraft, or the equipment used to produce them), manufacturing equipment (i.a., machine tools that can be used to produce industrial components or weapons) and other items, such as those used for law enforcement, such as helmets and batons, or chemicals used in riot control. This will bring the EU in alignment with the US and other partners with respect to the list of advanced technologies under sanction.
• Today’s package further expands the list of natural, legal persons or entities, associated with Russia’s military-industrial complex, for which additional export restrictions apply. These four entities operate in the aeronautic, aerospace or naval sector and several of them were already listed by the US since April 2022. This will bring the EU in closer convergence with the US and other partners with respect to the list of entities associated to the military-industrial complex to which sanctions apply.

What medical/pharmaceutical products has the EU added to the list of “advanced technologies”? Why?

• The new items added to the “advanced technologies” annex include a limited number of vaccines. This refers only to vaccines against pathogens included in the dual-use list (under 1C351, included in Regulation (EU) 833/2014, Annex VII – e.g. variola virus, yellow fever, MERS-corona, etc.). These vaccines could be associated to the development of biological weapons, as determined by experts of the Australia Group, a multilateral regime in charge of establishing controls for chemicals and bio dual-use items which could support the proliferation of chemical or bio weapons.
• This is, therefore, an additional precautionary measure to prevent the procurement of such vaccines by any Russian bio-lab, where they might be used to protect workers in the context of bioweapons development.
• This is also a case of alignment with our allies. There are few vaccines on the market against 1C351 pathogens, referred to above. Moreover, the existing exemption for medical and pharmaceutical reasons could allow the export of these vaccines, while controlling their end-use and any risk associated with their export on a case by case basis.

Transport-related measures

What is the airline information sharing measure about?

• The new exemption will allow for sharing of information that is needed to enable the technical standard setting work of the International Civil Aviation Organization.

What is the extension of prohibition to access to locks by ships?

• The extension of the port access ban to locks aims to stop possible circumvention of the sanctions through canals, with the exception to access locks when leaving the EU (vessels need to access locks to leave, unlike ports).
• It means that Russian ships going towards the sea will be allowed to pass, but not those entering a canal or going further up a canal.

Financial measures

What measures were adopted regarding deposits?

• To prevent possible circumvention of sanctions, the provision is extended to cover prohibition to accept any deposits from legal person, entity or body established outside the EU and whose proprietary rights are directly or indirectly owned for more than 50% by Russian nationals or by natural persons residing in Russia.
• A derogation is introduced to allow acceptance of such deposits for non-prohibited cross-border trade in goods and services between the EU and Russia.

Listings of individuals and entities

How many listings are included?

• Based on a proposal by the High Representative, the EU is listing an additional 54 persons and 10 entities, including political, propaganda and business figures, and individuals with close ties to the Kremlin. They include political figures or senior members of the political or cultural establishment, oligarchs and associated family members, military figures, politicians appointed in UA territories invaded by RU, companies active in the military sector or involved in the stealing of UA grain, and entities that engage in disinformation.

General

What are the benefits of the sanctions for European citizens?

• Since the beginning of Russia’s aggression against Ukraine, the vast majority of European citizens have shared their concerns about peace in Europe, shown solidarity with Ukrainian refugees and supported the need for Ukraine to receive political, financial and humanitarian assistance. By undermining Russia’s ability to pursue the invasion, sanctions are contributing to restoring peace in Ukraine and the region.  Together with other EU policies, sanctions are also a concrete means to uphold the EU values of human dignity, freedom, democracy, the rule of law and human rights.  

What is the rationale of imposing such sanctions?

• Sanctions are targeted at the Kremlin and its accomplices. They aim to weaken the Russian government’s ability to finance its war of aggression against Ukraine and are calibrated in order to minimise the negative consequences on the Russian population.
• Sanctions are imposing a direct cost on Russia for its aggression and hurting Russia’s economic ability to wage war, manufacture more weapons, and repair existing weapons systems.
• In addition, sanctions are designed to maximise the negative impact for the Russian economy, while limiting the consequences for EU businesses and citizens. We welcome EU companies’ diligence in complying with the sanctions framework in place.
• Ensuring an effective and diligent implementation of sanctions is key to prevent circumvention. This is primarily the responsibility of Member States.
• In this process, the European Commission is fully committed to assisting them and ensuring a consistent implementation across the Union.

Commission press release of 15 July – Implementation of EU sanctions against Russia: Commission adopts proposal for “maintenance and alignment” package

Council press release – EU adopts “maintenance and alignment” package of sanctions

Official Journal

European Commission website on Ukraine

Q&A on restrictive measures