Brussels, 31/07/2014 (Agence Europe) - On Thursday 31 July, the Council of the European Union formally adopted the economic sanctions against Russia - which is blamed for destabilising the situation in Eastern Ukraine (see EUROPE 11132).
This decision gives legal value to the agreement reached in the Committee of Permanent Representatives (Coreper) on 29 July - an agreement that was announced by European Council President Herman Van Rompuy and European Commission President José Manuel Barroso.
The sanctions were published in the Official Journal of the EU on Thursday and will enter into force on Friday 1 August. The text sets out the limits of the sanctions adopted - which will clarify for European companies what is forbidden and what is permitted.
In order to restrict Russia's access to the EU's capital markets, EU nationals and companies can no longer buy or sell new bonds, equity or similar financial instruments with a maturity exceeding 90 days, issued by major state-owned Russian banks, development banks, their subsidiaries outside the EU and those acting on their behalf. Services related to the issuing of such financial instruments, for example brokering, are also prohibited.
The EU has also decreed an embargo on the purchase and sale of arms, related material and dual-use goods. This covers all items on the EU common military list.
Exports of dual-use goods and technology for military use in Russia or to Russian military end-users will also be prohibited, with all items in the EU list of dual-use goods included.
Finally, exports of certain energy-related equipment and technology to Russia will be subject to prior authorisation by competent authorities of member states. Export licences will be denied if products are destined for deep water oil exploration and production, Arctic oil exploration or production, and shale oil projects in Russia.
“The measures will apply to new contracts”, the Council states - which will enable France to honour its contract for the sale of two Mistral helicopter carriers to Russia, despite criticism from Lithuania's President Dalia Grybauskaité.
The EU has hardened its position since the crash of a Malaysian plane in Eastern Ukraine in mid-July - a crash that has been attributed to a missile strike by pro-Russian separatists. This tragedy - which cost the lives of 298 people - has pushed Europeans to hit out at the Russian economy and to move on to Stage 3 of their sanctions. (LC)