On Monday 18 December, the EU Member States adopted the 12th package of EU sanctions against Russia, which includes measures affecting diamonds, re-exportation of sensitive goods, more import-export controls and restrictions, anti-circumvention measures, and capping of oil prices (see other article).
Diamonds. The EU imposes a ban on the direct or indirect import, purchase or transfer of diamonds from Russia. This ban applies to diamonds originating in Russia, diamonds exported from the country, diamonds transiting through Russia and Russian diamonds processed in third countries.
All G7 members will implement a direct ban on diamonds exported from Russia by 1 January 2024. A ban on Russian diamonds being processed (i.e. cut and/or polished) in a third country will take effect from 1 March 2024. This ban will be extended to synthetic diamonds, jewellery and watches containing diamonds from 1 September 2024. A mechanism based on traceability, verification and certification of rough diamonds will be put in place within the G7. These measures are designed to deprive Russia of revenue estimated at €4 billion a year, according to the Commission.
Re-exportation prohibited. EU exporters must contractually prohibit the re-exportation to Russia or for use in Russia of particularly sensitive goods and technology when selling, supplying, transferring or exporting to a third country, with the exception of partner countries.
Import-export controls and restrictions. Twenty-nine Russian and third country entities (including entities registered in Uzbekistan and Singapore, but not in China) have been added to the list of entities directly supporting the Russian military-industrial complex in its war of aggression. They are subject to stricter export restrictions on dual-use goods and technologies and on goods and technologies likely to contribute to the technological development of the Russian defence and security sector.
In addition, the list of items that could contribute to technological improvements in this sector has been extended to include chemicals, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles (UAVs), machine tools and machinery parts.
Additional restrictions have been imposed on imports of goods that generate significant revenue for Russia, such as pig iron and ferromanganese alloys (spiegeleisen), copper wire, aluminium wire, foil, tubes and pipes worth €2.2 billion a year, according to the EU Council.
A new import ban has been introduced for liquefied propane gas (LPG), with a transitional period of 12 months.
Enforcement and anti-circumvention measures. The transit ban on dual-use goods and technologies exported from the EU to third countries via Russian territory has been extended to all “battlefield goods”.
In addition, Russian nationals are prohibited from owning, controlling or holding posts on the governing bodies of the legal persons, entities or bodies providing crypto-asset wallet, account or custody services to Russian persons and residents.
The existing ban on the provision of services will be extended to also include the provision of software for the management of enterprises and software for industrial design and manufacture.
Lastly, the EU imposes notification requirements for the transfer of funds outside the EU by any entity established in the EU that is more than 40% owned or controlled by an entity established in Russia or by a Russian national or natural person residing in Russia.
Oil price cap. The EU Council is introducing stricter compliance rules to support the implementation of the oil price cap and combat circumvention (see other article).
A strengthened information-sharing mechanism will make it easier to identify vessels and entities that engage in deceptive practices, such as ship-to-ship transfers used to conceal the origin or destination of cargo and manipulation of automatic identification systems (AIS), while transporting Russian crude oil and petroleum products.
The EU Council also decided to introduce notification rules for the sale of oil tankers to any third country in order to make their sales and exports more transparent.
Iron and steel. The EU Council is extending the wind-down periods for the import of specific steel products.
Targeted sanctions. The EU Council sanctioned 61 individuals and 86 additional entities. These are Russian military and defence players, including 40 military industry companies, seven private military companies and members of the Russian and Belarusian armed forces.
The measures also target 11 cyber actors, as well as four actors disseminating disinformation/propaganda and economic actors, 14 members of the Russian central electoral commission and two members of regional commissions, who orchestrated the recent illegal ‘elections’ on Ukrainian territories “temporarily occupied” by Russia, and seven individuals and entities involved in the forced ‘re-education’ of Ukrainian children.
In addition, the EU Council has decided to add a criterion for inclusion on the list of persons and entities subject to sanctions to include those who benefit from a forced transfer of ownership or control of Russian subsidiaries of EU companies, so that no one can profit from the losses suffered by EU companies when their subsidiaries are forcibly acquired by Russian owners/managers.
In addition, it will be possible to maintain the sanctions of deceased persons to prevent the freezing measure from being potentially compromised.
Member States will also have a stricter obligation to proactively trace the assets of listed individuals, in order to prevent and detect breaches or circumvention of sanctions.
See legal documents: https://aeur.eu/f/a6h (Original version in French by Camille-Cerise Gessant)