On Monday 24 June, the European Union adopted its 14th package of sanctions against Russia. Its adoption was immediately welcomed by the foreign affairs ministers meeting in Luxembourg on the same day and, according to draft conclusions, it should be adopted by the European Council on 27 and 28 June. The latter is expected to call for the full and effective implementation of sanctions and additional measures to combat their circumvention, and once again urge all countries not to provide any material or other support to Russia’s war of aggression.
Energy. In concrete terms, the 14th package aims to limit Russia’s income from liquefied natural gas. After a transition period of 9 months, the EU will ban the use of EU ports for the transhipment of Russian LNG. This covers ship-to-ship and ship-to-shore transfers and reloading operations. This “does not affect import, but only re-export to third countries via the EU”, said the EU Council in a press release. The European Commission will monitor the implementation and development of this decision and may propose mitigation measures if necessary.
In addition, the EU will prohibit new investments as well as the supply of goods, technologies and services for the completion of LNG projects under construction, such as Arctic LNG 2 and Murmansk LNG. Import restrictions are being introduced on Russian liquefied natural gas via EU terminals not connected to the EU pipeline network. Three terminals are involved: two in Sweden and one in Finland.
Battlefield goods. To crack down on circumvention, the EU has decided that EU parent companies are required to do their utmost to ensure that their subsidiaries in third countries do not engage in any activity resulting in an outcome that the sanctions seek to prevent.
In order to help counter the re-exportation of battlefield goods found in Ukraine or critical to the development of Russian military systems, EU operators selling such battlefield goods to third countries will need to implement due diligence mechanisms capable of identifying and assessing risks of re-exportation to Russia. In addition, EU operators transferring their industrial know-how for the production of battlefield goods to third-country commercial counterparts will now have to include contractual provisions to ensure that such know-how will not be used for goods intended for Russia.
Finance. The EU Council decided to outlaw the use of the ‘System for Transfer of Financial Messages’ (SPFS), a specialised financial messaging service developed by the Central Bank of Russia to neutralise the effect of the restrictive measures. EU entities operating outside Russia are therefore prohibited from connecting to SPFS or equivalent specialised financial messaging services and from conducting transactions with specifically listed entities using SPFS outside Russia.
Furthermore, the EU Council is introducing a ban on transactions with targeted credit and financial institutions and crypto asset providers established outside the EU, when these entities facilitate transactions that support Russia’s defence-industrial base through the export, supply, sale, transfer or transport towards Russia of dual-use goods and technology, sensitive items, battlefield goods, firearms and ammunition.
Funding of political parties and other organisations. The EU Council also decided that political parties and foundations, non-governmental organisations, including think tanks, or media service providers in the EU, will no longer be allowed to accept funding coming from the Russian state and its proxies.
Transports. Specific vessels contributing to Russia’s warfare against Ukraine - transporting military equipment for Russia, stolen Ukrainian grain or supporting the development of Russia’s energy sector - are subject to a ban on access to ports and a ban on providing services. The measure also targets tankers that are part of Putin’s dark fleet which circumvent the EU and Price Cap Coalition caps, all while adopting deceptive shipping practices in complete disregard of international standards. Twenty-seven vessels belonging to this fleet are targeted. This fleet is said to number more than 400 boats.
The EU has also widened the flight ban to land in, take off from or overfly the territory of the EU. It now applies to any aircraft used for a non-scheduled flight and where a Russian natural or legal person, entity or body is in a position to effectively determine the place or time for its take-off or landing. In addition, operators must provide any information requested by Member States’ national competent authorities about non-scheduled flights, including ownership of the aircraft and possibly passengers.
The ban on transporting goods by road within the EU, including in transit, has been extended to cover EU operators 25% or more of which are owned by a Russian natural or legal person.
Import-export controls and restrictions. The EU Council is subjecting 61 entities to stricter export restrictions on dual-use goods and technologies and goods and technologies likely to contribute to the technological development of the Russian defence and security sector, as they directly support the Russian military-industrial complex in its war of aggression against Ukraine - 28 are established in Russia and 33 in third countries: nineteen in China and Hong Kong, one in Kazakhstan, two in Kyrgyzstan, one in India, nine in Turkey and one in the United Arab Emirates.
The list of items subject to restrictions because they could contribute to the technological enhancement of Russia’s defence and security sector has been extended to include nine additional items, such as microwave and aerial amplifiers, flight data recorders and All-Terrain Vehicles.
The EU has also introduced new restrictions on exports of goods that contribute in particular to enhancing Russian industrial capabilities such as chemicals, including manganese ores and rare earth compounds, plastics, excavation machinery, monitors and electrical equipment, and introduced restrictions on imports of helium from Russia.
Diamonds. The 14th sanctions package refines the ban on the import of Russian diamonds already agreed in the 12th package, notably by specifying that the ban does not apply to diamonds that were in the EU or in a third country (other than Russia), or that were cut or manufactured in a third country before the ban on Russian diamonds came into force. It also allows the temporary import or export of jewellery, for example for trade fairs or repairs.
Protection of EU operators. Measures have been taken as well to enable EU operators to seek compensation for damage caused by Russian companies as a result of the implementation of sanctions and expropriation. The EU Council is also creating an instrument to draw up a list of companies subject to a transaction ban for meddling with arbitration and court competence.
Intellectual property. The EU is imposing restrictions on accepting applications for registrations in the EU of certain intellectual property rights by Russian nationals and companies, with the aim of offsetting the actions of the Russian government and courts illegitimately depriving EU intellectual property rights holders of their protection in Russia.
Culture. It will be forbidden to purchase, import, transfer or export Ukrainian cultural property goods and other goods of archaeological, historical, cultural, rare scientific or religious importance, where there are reasonable grounds to suspect that the goods have been unlawfully removed from Ukraine.
Individual sanctions. In addition, 69 individuals and 47 entities have been sanctioned for their actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
They include businessmen, propagandists, members of the army and the judiciary, people responsible for the deportation of Ukrainian children and members of the Federal Security Service (FSB) of the Russian Federation, as well as Russian military and defence industrial companies, companies supplying vital dual-use technologies, transporting weapons and military personnel to the war zone, and those involved in circumventing sanctions.
To see the legal documents: https://aeur.eu/f/csh
To see the draft conclusions of the European Council: https://aeur.eu/f/csf (Original version in French by Camille-Cerise Gessant)