European Commission Updates Russia Sanctions Guidance: On May 12, the European Commission updated its guidance on public procurement sanctions. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
Hungary Demands Solutions to Russian Oil Import Issue: In an interview with Spanish newspaper El Pais on Thursday, Hungarian Foreign Minister Péter Szijjártó outlined the investments Hungary would need to undertake to wean itself off Russian oil, and hoped the EU could provide a solution. He estimated the country would need €500 and €550 million to update its refinery, and €200 million to update its Adriatic Sea pipeline. Hungary has opposed the EU’s proposed ban on imports of Russian oil, and this estimate is the closest Hungary has come to providing a price tag for its support of the package. (https://www.politico.eu/article/hungary-calls-on-eu-for-cash-ban-russian-oil-viktor-orban/).
Ten More European Companies Open Ruble Accounts at Gazprombank: Despite recent uncertainty as to the legality of President Putin’s rubles-for gas payment scheme, ten more European gas buyers have opened ruble-denominated accounts at Gazprombank for the purposes of making gas payments. In all, 20 companies have opened the accounts, with 14 others asking for paperwork to set them up. Sources at Gazprom indicate that only four customers to date have refused to pay for Russian gas in rubles. (https://www.bloomberg.com/news/articles/2022-05-12/ten-more-european-gas-buyers-open-ruble-accounts-for-payments).
Spain Identifies Russian Assets for Seizure: On Thursday, Spanish authorities announced that they had identified assets, including houses, companies and at least one luxury yacht, belonging to 15 Russian oligarchs on the EU sanctions list. Sources within Spanish law enforcement told Reuters that the information was handed over to authorities in April, and the government froze 12 funds and bank accounts, three luxury yachts, and 23 properties. The source identified 10 Spanish companies and 13 foreign ones with ties to sanctioned oligarchs. (https://www.reuters.com/world/europe/spain-finds-yacht-other-assets-15-sanctioned-russian-oligarchs-2022-05-12/).
Siemens Ends Russian Business: German engineering giant Siemens AG announced on Thursday that it would end its 170-year-old business in Russia, saying it “condemn[s] the war in Ukraine.” The company previously advocated for the importance of keeping communication channels open with Russia during the 2014 annexation of Crimea. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-12/card/siemens-to-wind-down-its-russia-business-p9TrjgLtT4FkYFomU3VC).
European Commission Unveils Plan to Export Ukrainian Grain: On Thursday, the European Commission announced a “solidarity lanes” plan to help export 20 million tons of grain out of Ukraine by the end of July. The measures include efforts to connect buyers to Ukrainian grain sellers, give priority to grain exports leaving Ukraine on EU infrastructure networks, and provide shipping equipment and storage for Ukrainian grain. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3002).
European Commission Updates Russia Sanctions Guidance: On May 11, the European Commission updated its guidance regarding sanctions affecting State-owned enterprises. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Publishes Consolidated List of Travel Ban Targets: On May 11, the European Commission published a consolidated list of individuals subject to travel ban measures in the EU. (https://ec.europa.eu/neighbourhood-enlargement/news/implementation-sanctions-commission-publishes-consolidated-list-travel-bans-2022-05-11_en#:~:text=The%20European%20Commission%20has%20today,from%20travelling%20to%20the%20EU).
No Progress on New Sanctions Package: Although Member State representatives met again today to discuss the new sanctions package against Russia, reports confirm that no progress has been made. (https://twitter.com/laurnorman/status/1524354627663237120).
Hungary Says Its Backing of Russia Oil Ban Hinges on Hundreds of Millions of Dollars: Hungary said a deal on a Russian oil ban as out of reach until Brussels offers a solution measured in hundreds of millions of dollars to replace Russian oil in the Hungarian economy or if such ban only covers oil transported by sea and not by pipeline. (https://www.reuters.com/world/europe/hungary-says-eus-russia-oil-embargo-should-exempt-pipeline-shipments-2022-05-11/).
Member States Raise Concerns Regarding Hungary’s Demands: Diplomats from several Member States are reported to have raised concerns about the plan to offer Hungary compensation for the Russian oil ban. (https://www.politico.eu/article/hungary-exemption-russia-oil-pipeline/).
EU Plans to Help EU Countries Confiscate Frozen Assets: The European Commission is reported to prepare a proposal that would make sanctions violation or evasion an EU crime so as to provide Member States with a legal basis to confiscate frozen assets. The proposal is expected to be unveiled on May 25. The matter may be contentious for Member States, which have traditionally been reluctant to accept justice reforms that would need changes to their legal systems. (https://www.reuters.com/world/europe/eu-seeks-ease-rules-seizing-sanctioned-oligarchs-assets-2022-05-11/).
Ukraine Cuts Russian Gas Flowing to Europe: Ukraine’s gas grid operator cut part of Russian gas supplies through two key sections of its pipeline network located in regions controlled by the Russian military, citing interference by occupying forces. Part of these deliveries were re-routed to other pipelines. (https://www.politico.eu/article/ukraine-fires-a-warning-shot-in-russia-gas-dispute/).
Italian PM Confident Ruble-for-Gas Scheme Will Not Disrupt Gas Supply: Italian Prime Minister Draghi stated that he was confident Russia’s demand for European buyers to pay for gas in rubles would not lead to a disruption of supplies, pointing that compliance of such scheme with EU sanctions was a “grey zone” as there is a lack of clarity on the rules. (https://www.reuters.com/business/energy/italys-draghi-sees-little-risk-gas-disruption-over-russian-rouble-demand-2022-05-11/).
Russian Billionaire Files Suit in EU Court over Sanctions Designation: On Wednesday, Russian steel billionaire Alexey Mordashov filed a lawsuit at the EU General Court challenging his recent inclusion on the bloc’s sanctions list. He joins Russian metals billionaire Alisher Usmanov, who filed a similar challenge at the Court last month. (https://www.bloomberg.com/news/articles/2022-05-11/russian-billionaire-challenges-to-eu-sanctions-mount-up).
European Commission Updates Russia Sanctions Guidance: On May 10, the European Commission updated its guidance regarding sanctions and customs-related matters (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
No Breakthrough on Russian Oil Ban in Talks Between Hungary & European Commission Presidents: Following her express trip to Hungary, European Commission President Ursula Von der Leyen did not return with an agreement from the Hungarian president to support to Russian oil ban as part of the new sanctions package. (https://www.politico.eu/article/von-der-leyen-to-travel-to-hungary-over-oil/).
French President Discusses Oil Ban with Hungarian Prime Minister: On Tuesday, French President Emmanuel Macron spoke with Hungary’s Prime Minister Viktor Orban to finalize the EU’s proposed ban on Russian oil, with France trying to ensure a global deal on the new sanctions package. (https://www.reuters.com/world/europe/frances-macron-spoke-hungarys-orban-over-russian-oil-ban-talks-continue-2022-05-10/).
European Commission Considers Indemnifying Hungary to Obtain Support for Oil Ban: As Hungary continues to oppose the proposed Russian oil ban in its current form (despite the European Commission’s proposal for a delayed phase-out period for Hungary, Slovakia and the Czech Republic), the European Commission is reportedly considering efforts to convince Hungary to sign up to the new sanctions package by offering it financial compensation to end its reliance on Russian fossil fuels. An announced videoconference between the Commission and regional players, which was due to discuss cooperation on oil infrastructure this morning, was postponed until further notice. It’s unclear whether a deal with Hungary can be reached before EU ambassadors meet again Wednesday morning. (https://www.politico.eu/article/eu-russian-oil-ban-orban-hungary-cash-sanctions/).
HR Borrell Hopes for New Sanctions Package to be Adopted by Next Monday: High Representative Josep Borrell confirmed that permanent representatives of the Member States were still working to get an agreement on the new sanctions package, although he hoped that an agreement would be reached before the next meeting of the Foreign Affairs Council on next Monday. (https://www.eeas.europa.eu/eeas/syria-press-remarks-hrvp-josep-borrell-brussels-vi-conference-supporting-future-syria-and_en).
Lithuanian Parliament Names Russia a Sponsor of Terrorism: On Tuesday, the Lithuanian parliament passed a resolution declaring Russia’s invasion of Ukraine a “genocide” and labeling Russia as a “perpetrator of terrorism.” The resolution, which passed unanimously, recognized “the full-scale armed aggression — war — against Ukraine by the armed forces of the Russian Federation and its political and military leadership […] as genocide against the Ukrainian people.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-10-22/h_87b1ee5432bc68c4d3ab7b360a3eed99).
Council President Claims the EU is Close to a Deal on New Sanctions: While visiting Kyiv on Monday, European Commission President Charles Michel stated that the EU was “very close to an agreement to ban Russian oil.” (https://www.consilium.europa.eu/en/press/press-releases/2022/05/09/remarks-by-president-charles-michel-at-the-press-conference-with-prime-minister-denys-shmyhal/).
European Commission President Visits Hungary to Reach Deal on Oil Ban: President Von der Leyen is reported to have travelled to Budapest to discuss the ban on Russian oil with Hungarian President Viktor Orban. The trip is expected to yield a deal allowing for the formal green-light of the next sanctions package tomorrow. (https://www.politico.eu/article/von-der-leyen-to-travel-to-hungary-over-oil/).
EU Reported to Drop Plans to Ban Shipping of Russian Oil: On Monday, the Financial Times reported that, in light of opposition from Member States, and in particular Greece, the European Commission has dropped the proposal to prohibit the shipping of Russian oil as part of its next sanctions package, while prohibitions on insurance and financial services to Russian oil cargoes would be maintained. (https://www.ft.com/content/4b4ad184-1d88-4d51-92da-8e698ab3ec3c).
European Commission Considers Concessions to Win Support for New Sanctions Package:The European Commission is reportedly considering offering Eastern countries more money to upgrade oil infrastructure in a bid to convince them to support the new sanctions package, in addition to the phase-out until the end of 2024 agreed for Hungary and until mid-2024 for Slovakia and the Czech Republic. Cyprus is also reported to have concerns with a proposed ban on sale of properties to Russians. (https://www.reuters.com/world/europe/eu-considers-more-funds-eastern-states-bid-deal-russia-oil-ban-2022-05-09/).
Bulgaria Says It Will Veto EU Oil Ban Absent a Derogation: Bulgaria has stated it would not support a new sanctions package if it does not get a derogation from the proposed ban on Russian oil imports. (https://www.reuters.com/world/europe/bulgaria-says-will-veto-eu-oil-sanctions-russia-if-it-does-not-get-derogation-2022-05-08/).
HR Borrell in Favor of Seizing Frozen Russian Assets to Pay for War Bill: Speaking to the Financial Times, High Representative Josep Borrell has indicated that the EU should consider seizing frozen Russian foreign exchange reserves to help pay for the cost of rebuilding Ukraine after the war. (https://www.ft.com/content/82b0444f-889a-4f3d-8dbc-1d04162807f3?shareType=nongift).
Germany Prepares Crisis Plan for Abrupt End to Russian Gas: Germany is reportedly considering an emergency package to address any sudden halt in Russian gas supplies, including taking control of critical firms. (https://www.reuters.com/business/energy/exclusive-germany-prepares-crisis-plan-abrupt-end-russian-gas-sources-2022-05-09/).
No Weekend Deal on Sanctions Package:According to Politico, talks on the EU’s sixth sanctions package broke down on Sunday without a deal. Negotiators are struggling to agree on the details of the EU’s proposed ban on Russian oil imports. Hungary, which has long been a vocal opponent of the ban, is reportedly seeking a “total opt-out” from the ban; the EU has proposed delayed compliance with the ban for Hungary and Slovakia until the end of 2024. Bulgaria is also displeased with the text, as it would like an extended phase-out period. Negotiators will return to the table on Monday or Tuesday, and were optimistic that an agreement could be reached by Tuesday. (https://www.politico.eu/article/eus-russian-oil-ban-stalls-as-hungary-holds-up-sanctions/).
G7 Promises to Ban Russian Oil Imports: After a call with G7 leaders and Ukrainian President Volodymyr Zelenskyy on Sunday, the G7 parties released a joint statement detailing their intended next steps to punish Russian aggression in Ukraine. In spite of the difficulties in passing an EU oil ban, the G7 partners announced their commitment to “phase out our dependency on Russian energy, including by phasing out or banning the import of Russian oil.” The group promised to work together to maintain global supply and price stability in energy markets. (https://www.whitehouse.gov/briefing-room/statements-releases/2022/05/08/g7-leaders-statement-2/).
Italy Freezes Scheherazade Yacht: After a prolonged investigation, Italian authorities announced that they had seized the yacht Scheherazade from the Marina di Carrara on Friday. The announcement of the seizure stated that Italian investigators had found that the ship had “significant economic and business ties” to high-ranking people in Russia subject to sanctions in the EU. The announcement did not name the beneficial owner. (https://www.forbes.com/sites/giacomotognini/2022/05/06/italy-freezes-scheherazade-superyacht-linked-to-vladimir-putin/?sh=54d6655611e8).
European Commission Updates Russia Sanctions Guidance: On May 5, the European Commission updated its guidance documents regarding sanctions targeting access to EU ports. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
EU Rewrites Oil Ban to Give Hungary, Slovakia and Czech Republic More Time: As Hungary, Slovakia and Czech Republic called for more time to phase out Russian oil, the European Commission has proposed a revised draft, which would provide for the possibility for these three countries to import Russian oil until the end of June 2024. Despite this proposal, no agreement has been reached yet on the sixth Russia sanctions package. (https://www.politico.eu/article/eu-re-writes-oil-ban-to-give-hungary-slovakia-and-czech-republic-more-time/).
EU Also Proposes Additional Delays for Oil Shipping: The European Commission, as part of its amendments to convince reluctant Member States, is also reported to have proposed three-month transition before banning EU shipping services from transporting Russian oil, instead of the initial one month in response to concerns by Greece, Malta and Cyprus. An agreement is however not expected until this weekend. (https://www.reuters.com/world/europe/eu-tweaks-russia-oil-sanctions-plan-bid-win-over-reluctant-states-source-2022-05-06/).
Hungary Asks for 5 Years to Phase Out Russian Oil: Hungary has opposed the current proposal by the European Commission for a phasing out of Russian oil imports until the end of 2023, arguing that, due to its particular situation as a landlocked country that can only get oil via pipelines, a five-year delay was needed. (https://www.politico.eu/article/orban-commissions-sanction-plans-a-nuclear-bomb-for-economy/).
European Commission President Confident that New Sanctions Will Be Adopted: The European Commission stated on Friday that she was confident the new sanctions package was on track, despite delays in adoption. (https://www.reuters.com/world/europe/von-der-leyen-confident-eu-will-pass-new-sanctions-package-2022-05-06/).
HR Borrel to Call Meeting Next Week if Russia Oil Embargo Deal Not Forthcoming: The EU’s top diplomat stated that a meeting of EU foreign ministers will be held next week should countries from the bloc fail to reach an agreement over an oil embargo against Russia by the weekend. (https://www.reuters.com/world/europe/eus-borrell-call-meeting-next-week-should-deal-russian-oil-embargo-fail-2022-05-06/).
German Manufacturing Sector Contracts: On Friday, the German Federal Statistics Agency announced that production in the country’s energy sector declined by 3.9 percent in March as compared to February. The agency cited continued lockdowns in China as a primary reason for the slowdown, though restrictions on trade with Russia are not helping the situation. The slowdown may have impacts across greater Europe. (https://www.wsj.com/articles/german-production-flags-hit-by-ukraine-war-and-china-lockdowns-11651838047?mod=livecoverage_web).
European Commission Updates Russia Sanctions Guidance: On May 5, the European Commission updated its guidance documents regarding sanctions targeting luxury goods and trading, asset freeze measures, circumvention and due diligence (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
EU Countries Close to Agreement on New Sanctions: High Representative Josep Borrell was quoted saying that EU Member States were “almost there” in agreeing the bloc’s proposed new package of sanctions against Russia, including an oil embargo (https://www.reuters.com/world/europe/eu-countries-almost-have-agreement-new-sanctions-top-diplomat-says-2022-05-05/).
Although the European Commission Struggles to Find a Consensus: While European diplomats had hoped for the new sanctions package to be adopted on Friday, they now expect the discussions to possibly go into the weekend with a formal adoption of the package on Saturday, as Slovakia and Hungary continue to push for a longer phasing-out period for the application of the oil ban. (https://www.politico.eu/article/von-der-leyens-team-hits-phones-in-scramble-to-find-oil-sanctions-compromise/).
Timing of Russian Oil Ban Is Not the Only Issue: Greece, Cyprus, and Malta are also reportedly concerned with the proposal to prohibit EU-flagged or EU-controlled ships from transporting Russian oil to third countries, while the Nordic countries and the Netherlands have doubts regarding the proposed ban of three more state-owned Russian broadcasters. (https://www.politico.eu/article/sanctions-vladimir-putin-eu-russia-oil-ban-hungary-slovakia-viktor-orban/).
Council President Calls for Confiscation of Sanctioned Russian Assets: In a Thursday interview with Interfax Ukraine, Charles Michel spoke in support of confiscating sanctioned assets to make Russia pay for damages to Ukraine, although he acknowledged that such seizures would entail significant legal issues across the different national legal systems of all 27 Member States. (https://www.politico.eu/article/michel-confiscate-sanctioned-assets-russia-oligarchs/).
France’s Engie Calls for Clearer EU Guidelines on Russian Gas Payments: The French utility company Engie has warned that there were still considerable uncertainties as regards to when payments for gas might be permissible under the current EU sanctions framework, and called on the European Commission to provide detailed guidelines as next payments loom. (https://www.reuters.com/business/energy/engie-still-paying-russian-gas-euros-says-ceo-2022-05-05/).
President Putin’s Purported Girlfriend Suspected to be in Latest EU Sanctions Package: Two sources have said that the EU has proposed sanctions on Alina Kabaeva, reportedly the mistress of Russian President Vladimir Putin, in the latest round of sanctions. The restrictions will freeze her assets and restrict her travel to the EU. (https://www.theguardian.com/world/2022/may/05/head-of-russian-orthodox-church-patriarch-kirill-eu-sanctions-list-draft).
European Banks Post Optimistic Earnings Statements Despite Russian Losses: Two of Europe’s largest banks, Societe Generale and UniCredit both posted losses on business in Russia, valued at 3.1 billion euros and 1.3 billion euros respectively, while maintaining strong profits through the first quarter. The lost business in Russia was a relatively small part of both banks’ business. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-05/card/soci-t-g-n-rale-and-unicredit-shrug-off-russia-losses-gUpGXLPoZxxYv3BOWcmw).
European Commission President Announces New Sanctions Package: Speaking before the European Parliament, President Von der Leyen announced that the EU would impose a new sanctions package against Russia, including (i) additional asset freeze measures, (ii) de-SWIFTing of three banks, including Sberbank, (iii) ban on three Russian State-owned broadcasters, (iv) restrictions on the provision of services by accountants and consultants to Russian companies and (v) a complete import ban on Russian oil (including seaborne and pipeline, crude and refined), with imports phased out “within six months” for crude oil and “by the end of the year” for refined products. (https://ec.europa.eu/commission/presscorner/detail/en/speech_22_2785).
More Details on the New Sanctions Package: Politico reports that the three banks to be excluded from SWIFT would be Sberbank, Credit Bank of Moscow, and Russian Agricultural Bank. Rossiya RTR/RTR Planeta, Rossiya 24 and TV Centre International would be banned from broadcasting in the EU. Patriarch Kirill would be amongst the new asset freeze targets. In addition, Russians will be banned from buying homes and other property within the EU (https://www.politico.eu/article/eu-target-vladimir-putin-oil-bank-propaganda-new-russia-sanction-plan/).
No Agreement Reached by EU Member States on Wednesday on New Sanctions Package: Reuters reports that EU Member States did not reach an agreement on the new sanctions package on Wednesday, although they are set to discuss again on Thursday and could reach an agreement then or later this week. (https://www.reuters.com/world/europe/eu-lay-out-new-sanctions-russia-targeting-oil-imports-2022-05-04/).
EC Proposal that Hungary and Slovakia Receive Special Treatment under Oil Ban: The European Commission is reported to propose that Hungary and Slovakia would be granted until the end of 2023 to stop their Russian oil imports. This exclusion would take the form of a derogation, whereby authorizations may be granted by the competent authorities of Hungary and Slovakia for contracts concluded before the new sanctions package enters into force. (https://www.politico.eu/article/hungary-and-slovakia-set-to-get-one-extra-year-to-kick-off-from-russian-oil/).
Slovakia Still Opposes to EU’s Current Sanctions Plan, While Hungary Expresses Reservations: Slovakia’s Energy Minister has announced his country will not be able to agree to the European Commission’s current proposal for an import ban on Russian oil, stating the proposal to give an extra year to adapt was not enough, as Slovakia expects at least three years is needed to transition off Russian oil. Hungary has also expressed reservations. (https://www.politico.eu/article/russian-oil-ban-slovakia-cant-accept-eus-current-sanctions-plan/).
Bulgaria to Seek Exemption from EU Oil Embargo: The Bulgarian Deputy Prime Minister stated that Bulgaria will seek an exemption from the European Union’s proposed Russian oil embargo if such opt-outs are allowed. (https://www.reuters.com/business/energy/bulgaria-seek-exemption-any-eu-embargo-russian-oil-deputy-pm-says-2022-05-04/).
Czech Republic Also Seeks EU Oil Embargo Exemption: The Czech Republic also announced it would seek an exemption period of two to three years to the European Union’s proposed embargo of Russian oil, gaining time for pipeline capacities to be increased. (https://www.reuters.com/world/europe/czech-republic-talks-eu-oil-embargo-exemption-pm-says-2022-05-04/).
EU Amends Dual-Use Regulation to Withdraw Benefit of General Authorizations to Russia: The EU has amended certain of its general authorizations under its dual-use framework to remove Russia from authorized destinations. This brings the Dual-Use Regulation in line with EU sanctions that prohibit, subject to exemptions and derogations, the export of dual-use items to Russia (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R0699&from=EN).
European Commission Updates Russia Sanctions Guidance: On May 4, the European Commission updated its existing guidance on sanctions targeting luxury goods. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
Sberbank’s European Arm to be Wound Down by Year End: Austrian authorities have announced that Sberbank Europe AG, the European arm of Sberbank, would be wound down by the end of the year as the bank faced failure due to a run on deposits after Russia invaded Ukraine. (https://www.reuters.com/business/finance/european-arm-russias-sberbank-be-wound-down-by-year-end-2022-05-04/).
European LNG Terminals Report Record April: According to commodity tracking firm Vortexa, terminals to import liquefied natural gas in Europe took in a record amount of imports in April, and European imports of oil from non-Russian sources reached their highest levels since before the pandemic. The move comes as the bloc prepares for likely restrictions on energy imports. (https://www.wsj.com/articles/europe-scrambles-for-energy-before-cutting-itself-off-from-russia-11651655058?mod=livecoverage_web).
Maersk Loses Over $717m due to Exit From Russia in Q1: Shipping giant Maersk lost $717 million in the first quarter of 2022, as the company exited Russia following the Ukrainian invasion. According to a Bloomberg report, $627 million of the Russian losses were write-downs and $91 million were increases in operating costs. (https://www.arabnews.com/node/2075611/business-economy).
German Exports to Russia Drop 63 Percent Between February and March: On Wednesday, the German Federal Statistics Agency reported that German exports to Russia declined by 62.3 percent in March, for a total of 900 million euros. German imports from Russia declined by only 2.4 percent over the same period. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-04/card/sanctions-send-german-exports-to-russia-plunging-2FZPrnjTCKG7KGLXO6VX).
Sanctioned Oligarch Sues EU Over Designation: Bloomberg reported on Wednesday that Russian metals billionaire Alisher Usmanov filed an appeal with the EU’s General Court to suspend sanctions on him until a judge makes a final ruling on his case. His plea comes after other sanctioned Russian entities, like RT, attempted to pause restrictions on them. (https://www.bloomberg.com/news/articles/2022-05-04/metals-billionaire-usmanov-files-appeal-over-eu-russia-sanctions).
Italian Authorities Investigating Yacht Ownership: Italian authorities are investigating the ownership of the yacht Scheherazade as the boat prepares for departure from the Tuscan port of Marina di Carrara after sea tests. The yacht has been linked to Russian President Vladimir Putin, who is currently subject to sanctions in multiple jurisdictions, but true beneficial ownership is still under investigation. A spokeswoman for Italy’s financial police stated that, if the yacht left port, Italian authorities would not have any ability to stop it. (https://www.nytimes.com/2022/05/04/world/europe/russia-putin-superyacht-sanctions.html).
European Commission Updates Russia Sanctions Guidance: On May 3, the European Commission updated its existing guidance on sanctions targeting insurance and reinsurance, sale of securities and deposits. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
HR Borrell Confirms Scope of New Sanctions Package: The EU’s foreign policy chief confirmed that the next sanctions package currently prepared by the European Commission would cover the de-swifting of additional banks, asset freeze measures against disinformation actors and measures against oil imports. These new sanctions are expected to be presented on Wednesday. (https://www.reuters.com/world/europe/eus-borrell-says-new-russia-sanctions-hit-oil-cut-more-banks-swift-2022-05-03/).
New Sanctions Package May Require Two Separate Meetings of EU Ambassadors: As the European Commission struggles to convince Member States to approve an import ban on Russian oil, in particular those with heavy dependency on Russian hydrocarbons, officials have been reported to expect that the agreement on a new sanctions package might take two separate meetings between European ambassadors, with the first one scheduled for Wednesday morning. (https://www.cnbc.com/2022/05/03/russia-sanctions-eu-nears-oil-embargo-hungary-and-slovakia-want-exemptions.html).
European Council President “Confident” of Imminent Sanctions on Russian Oil: Speaking on Tuesday at the opening of a new liquefied natural gas terminal in Greece, European Council President Charles Michel said “Our goal is simple: we must break the Russian war machine. And I am confident that the council will imminently impose further sanctions, notably on Russian oil.” (https://www.theguardian.com/world/2022/may/03/eu-sanctions-russian-oil-european-council-president-charles-michel).
Italian PM Calls for End to EU Unanimity Rule on Foreign Policy Decisions: In a speech to the European Parliament, Mario Draghi said that the decision-making capacity to respond to Russia should be accelerated by using a “qualified majority” approach rather than the unanimity rule for the adoption by the EU of foreign policy decisions, including on sanctions (https://www.ft.com/content/17276897-970f-4451-85bd-7a685cec0894).
Lack of EU Sanctions on Russian Diamonds Draws Scrutiny: On Tuesday, Time published a profile of the Belgian diamond industry, noting that the EU has abstained from sanctioning Russian state-owned diamond company Alrosa while the US and UK have already imposed restrictions on the company. Belgian officials stated that a sanction on Russian diamonds would harm the EU more than it harms Russia, similar to arguments used in energy bans. (https://time.com/6172665/russia-diamonds-sanctions-belgium/).
European Commission Updates Russia Sanctions Guidance: On May 2, the European Commission updated its existing guidance on humanitarian aid and sanctions affecting trading. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
EU Ambassadors to Meet on Wednesday to Discuss New Sanctions Package: The new package, expected to target Russian oil, Russian and Belarusian banks, and more individuals and companies, has been discussed by Commission officials and member state ambassadors one-on-one this weekend and is expected to be discussed on Wednesday, although a final agreement may not be reached at this meeting. (https://www.ft.com/content/c8eedb92-9512-4648-8146-d1450fcbd7e9).
EU Considers Sanctions on Russian Nuclear Power Industry: Politico reports that Germany has decided to back potential sanctions on uranium imports from Russia, along with potential sanctions against Rosatom, although Eastern European countries fear there is no authorized nuclear fuel alternative to Russian supply. (https://www.politico.eu/article/russia-nuclear-power-uranium-plants-europe-imports-germany-sanctions-ukraine-war/).
Germany Ends Opposition to Russian Oil Embargo: In Monday interviews, German Finance Minister Christian Linder and Economy Minister Robert Habeck said that German is ready to back an immediate EU ban on Russian oil imports, adding that the country could weather shortages and price hikes. This reverses Germany’s previous position on the oil embargo. The pair noted that Germany is working to cut Russian oil consumption in advance of a ban. (https://www.reuters.com/business/energy/germany-would-weather-russian-oil-ban-despite-shortages-minister-2022-05-02/).
EU Oil Embargo May Exclude Hungary and Slovakia: The European Commission reportedly is considering excluding Hungary and Slovakia, two countries which are highly dependent on Russian oil, from the scope of the Russian oil ban it is currently working on. (https://www.reuters.com/world/europe/eu-may-offer-hungary-slovakia-exemptions-russian-oil-embargo-2022-05-02/).
Italy in Favor of Allowing Energies Companies to Pay for Gas in Rubles, While Waiting for Clarifications: The Italian minister in charge of energy security has spoken in favor of allowing energy companies to pay in rubles for gas, while the legal framework and considerations for such payments are being considered. He stressed that energy companies should not be left in the dark and risk being accused of violating sanctions, while not paying in rubles. The EU Energy Commissioner has confirmed the European Commission would issue more detailed guidance on what energy companies can do within the framework of sanctions (https://www.politico.eu/article/italy-eu-energy-pay-russia-gas-rubles/).
Germany Promises to Continue Sanctions Until Peace Deal Reached: In a Monday interview with ZDF public television, German Chancellor Olaf Scholz promised to maintain sanctions on Russia until it reaches a peace agreement with Ukraine. (https://www.usnews.com/news/world/articles/2022-05-02/sanctions-wont-be-lifted-until-russia-signs-peace-deal-with-ukraine-germanys-scholz).
Hungary Continues Opposition to Oil Embargo:On Monday, Bloomberg reported that a senior official in the Hungarian government said that the Hungarian delegation is prepared to veto EU sanctions on the Russian oil industry if the measures restrict Hungary’s ability to import energy. (https://www.bloomberg.com/news/articles/2022-05-01/hungary-would-veto-eu-sanctions-on-russian-energy-minister-says).
World’s Largest Wind Turbine Manufacturer Cites Ukraine Conflict as a Reason for Q1 Losses: In its revenues report released on Monday, Danish wind turbine manufacturer Vestas said that revenues in the first quarter rose 27 percent to €2.5 billion, but it swung to an operating loss before special items of €329 million from a profit a year ago of €251 million. Even though the conflict in Ukraine is fueling demand for alternative energy sources, the conflict is also disrupting the supply chains the industry needs to construct turbines. Vestas also cited rising inflation as another challenge. (https://www.ft.com/content/91493287-e15e-4c2f-8994-a08583344623).
Finnish Consortium Rescinds Nuclear Power Plant Joint Venture with Russia: On Monday, Fennovioma Oy, a consortium that includes Finnish state-owned power and industrial companies, announced that it was suspending its participation in a joint venture, Hanhikivi 1, to construct a nuclear power plant with the Russian state-owned nuclear enterprise Rosatom. In cancelling the project, it cited difficulties in sourcing materials due to international sanctions. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-02/card/finnish-group-pulls-plug-on-russian-backed-nuclear-plant-wfy9K1a0RMwcp5hsIxSs).
French Utility Company Expands Investments in US LNG: On Monday, French state-backed utility Engie announced that it had signed a contract with Houston-based liquefied natural gas (“LNG”) company NextDecade. The company committed to buy 2.4 billion cubic meters a year of LNG for 15 years. Prior negotiations between the two companies fell apart in 2020 over environmental concerns, but the conflict in Ukraine has made investment in the US more attractive for European companies. (https://www.ft.com/content/920881a4-e72f-4c7e-89d3-587a5d34e0c1).
UEFA Bans Russian Teams, Cancels Russian Bid to Host Euros: On Monday, the Union of European Football Associations (“UEFA”) announced further restrictions on Russian participation in upcoming international events. The Russian women’s national team will no longer compete in the Women’s European Championship and qualification tournaments for the 2023 World Cup, and Russian club teams will no longer participate in the Champion’s League. The announcement also canceled Russia’s bid to host the Men’s Euros in 2028 and 2032. (https://news.sky.com/story/russian-bid-to-host-euros-in-2028-is-thrown-out-12604272).
More Details Emerge on EU Sanctions Package:Bloomberg reported on Saturday that the new EU sanctions package will likely include a ban on Russian oil imports by the end of the year, and the inclusion of more banks in the SWIFT ban, including Sberbank. The oil ban will be phased in gradually, with benchmarks throughout the year. The sanctions package may be formally introduced as soon as the coming week. (https://www.bloomberg.com/news/articles/2022-04-30/eu-to-propose-phasing-out-russian-oil-by-the-end-of-the-year).
Sanctioned Russian Gas Company in Poland Warns of Fire Risk: Novatek Green Energy, a Polish subsidiary of Russian gas company Novatek that is subject to Polish sanctions announced earlier this week, warned that 500 containers filled with liquefied natural gas, which are stuck on railroad tracks in Poland, could explode if they aren’t immediately moved to terminals. Weather conditions are making the situation more tenuous. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-04-30).
Dutch Dockworkers Refuse to Unload Ship with Russian Diesel: On Saturday, unionized dock workers in Amsterdam refused to unload diesel from the tanker Sunny Liger, saying that the contents of the ship was helping to fund the war in Ukraine. The move comes after the ship was refused entry in Sweden and the port of Rotterdam for similar reasons, though its cargo is not currently subject to EU sanctions. (https://www.aljazeera.com/news/2022/4/30/dutch-dockers-refuse-to-unload-ship-with-russian-diesel-cargo).
French President Macron Calls President Zelenskyy: The Elysee Palace confirmed on Saturday that French President Emmanuel Macron called Ukrainian President Volodymyr Zelenskyy on Friday. The call discussed future military assistance to Ukraine, and President Macron said that he would use his second term to restore the territorial integrity of Ukraine. (https://www.elysee.fr/emmanuel-macron/2022/04/30/entretien-telephonique-avec-le-president-de-lukraine-volodymyr-zelensky).
European Commission Updates Russia Sanctions Guidance: On April 29, the European Commission updated its existing guidance on asset freeze measures. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Expected To Discuss 6th Package With Member States Over the Week End: the European Commission is reported to discuss informally proposals for a sixth sanctions package with the EU Member States over the week-end, including an oil embargo, sanctioning Sberbank and additional asset freeze measures (https://twitter.com/MarkerJParker/status/1520049704880508929).
German Economy Ministry Says Opening Gazprombank Account to Pay For Gas Not Necessarily a Breach of Sanctions: the German minister took the position that opening an account with Gazprombank to pay for gas would not breach EU sanctions if contractual obligations are fulfilled by transferring euros or dollars (https://www.reuters.com/world/europe/gazprombank-account-not-necessarily-breach-sanctions-german-ministry-2022-04-29/).
European Commission Announces Extra Sanctions Guidance on Ruble-for-Gas Scheme: as Member States continue to be divided as to whether current EU sanctions prohibit Russia’s ruble-for-gas scheme and what steps must be taken to ensure compliance, the European Commission announced extra guidance would be issued (https://www.reuters.com/business/energy/europe-strains-clarity-russia-stands-by-roubles-for-gas-demand-2022-04-29/).
Germany Supports Potential Sanctions on Russian’s Civil Nuclear Power Imports, Ban on Russian Uranium: EU Diplomats told POLITICO off the record that Germany supports a ban on uranium imports and other items to support the civil nuclear industry, which could impact civil nuclear reactors within Europe. (https://www.politico.eu/article/russia-nuclear-power-uranium-plants-europe-imports-germany-sanctions-ukraine-war/).
Poland’s PGNiG To Provide Gas to Areas Cut Off By Russian Company Novatek: On Friday, PGNiG, Poland’s largest gas company announced that two of its subsidiaries would provide gas to customers affected by a cutoff from Russian firm Novatek, at the order of the Polish Prime Minister. (https://www.reuters.com/article/ukraine-crisis-gas-pgnig/update-2-polands-pgnig-will-deliver-gas-to-novatek-customers-idUSL2N2WR0PT)
European Commission Updates Russia Sanctions Guidance: On April 27, the European Commission updated its existing guidance on sanctions affecting credit rating and sales of securities. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Repeats that Complying with Rubles Payments for Gas Would Breach EU Sanctions: EU officials have been reported to repeat their warning that complying with the Russian decree requiring payments in rubles for gas would be a breach of EU sanctions, after several reports that gas distributors in Germany, Austria, Hungary and Slovakia had been planning to comply with that request. (https://www.ft.com/content/aa0d294b-0982-4f94-a327-a93300444083).
EU Member States Divided Over European Commission’s Guidance on Gas For Rubles Scheme: Member States are reported to have conflicting approaches as regards whether the Russian gas for rubles scheme can comply with EU sanctions. The European Commission takes the view that compliance with EU sanctions would be guaranteed only if firms make clear their obligations are complied with once a payment is made in Euros, and not after it is converted in Rubles. However, Denmark, Finland, Greece, Slovakia and Spain said more clarity was needed. Other countries have casted doubts as regards the European Commission’s interpretation. (https://www.reuters.com/world/europe/europe-struggles-clarity-russias-roubles-for-gas-scheme-2022-04-28/).
EU Energy Groups Ready to Meet Russian Terms for Gas Payments: Germany’s Uniper, Austria’s OMV and Italy’s Eni have all indicated that they were considering or ready to make payments for gas in accordance with Russian terms, after having considered solutions that would be compatible with EU sanctions, challenging in particular the lack of clarity from the European Commission’s guidance in that regard. (https://www.ft.com/content/5c4ecf3f-67c9-4ae6-b1a2-d70f2ef7ac05).
Poland Says Countries Paying for Gas in Rubles Should Be Penalized: While calling for an embargo on Russian gas, Poland also said that countries which agree to pay for gas in rubles should face consequences, although the nature of these expected consequences were not discussed. (https://www.reuters.com/world/europe/poland-says-countries-paying-russian-gas-roubles-should-be-penalised-2022-04-28/).
Germany Ready to Consider Sanctions on Sberbank: Bloomberg reported on Thursday that Germany is willing to consider sanctioning Sberbank in the next round of EU sanctions. Germany had hesitated on the restriction previously out of fear that sanctions on Sberbank would disrupt energy payments. Sberbank is already subject to full blocking sanctions in the US, and the UK has banned clearance of sterling payments through Sberbank. (https://www.bloomberg.com/news/articles/2022-04-28/germany-closer-to-backing-eu-push-to-sanction-russia-s-sberbank).
Italian Legislators Investigate Sanctions Evasion through Central Asian Front Companies: Italian lawmakers are investigating allegations that Italian companies are using front companies in Kazakhstan and other central Asian countries to knowingly sell goods to Russian customers in violation of sanctions laws. Italian employer lobby Confindustria flagged the behavior to the parliamentary committee for the security of the republic, known by its Italian acronym Copasir. Neither Confindustria nor Copasir revealed which companies are under investigation, or how long the investigation will take. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-04-28/card/italy-probes-companies-accused-of-dodging-sanctions-on-russia-ZZY885lzSXwO8NL4p3Tl).2
EasyJet Terminates Russian Leases: Swiss budget airline EasyJet canceled its leases on six Airbus jets owned by Russian state leasing company GTLK shortly after the UK and EU imposed sanctions on Russia, according to a Thursday Bloomberg report.. The aircraft, which are over 11 years old, have all been in storage since 2020, as the pandemic impacted air travel. (https://www.bloomberg.com/news/articles/2022-04-28/easyjet-exits-leases-on-russia-owned-jets-in-sanctions-turnabout).
European Commission Updates Russia Sanctions Guidance: On April 27, the European Commission updated its existing guidance on prohibitions on access to EU ports. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission President Confirms Intensive Work on New Russia Sanctions:President Von der Leyen said the EU is working “intensively” on a 6th sanctions package, which will “come in due time”. She also reiterated that making payments in rubles for gas, where not foreseen by the contracts, would breach EU sanctions (https://www.politico.eu/article/eu-working-intensively-on-new-russia-sanctions-von-der-leyen/).
EU Takes Steps To Ensure Ukraine’s Duty-Free & Quota-Free Access to the EU Market: On April 27, the European Commission put forward a proposal to suspend for one year import duties on all Ukrainian exports to the European Union, as well as the suspension of all EU anti-dumping and safeguard measures on Ukrainian steel (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2671).
European Commission President Announces Immediate Response to Gazprom’s Decision to Stop Gas Deliveries to Poland and Bulgaria:The European Commission President delivered a statement vowing an immediate, united and coordinated response to Gazprom’s decision, including steps to mitigate the impact on European consumers and additional work to ensure sufficient gas supply and storage in the medium term. (https://ec.europa.eu/commission/presscorner/detail/en/statement_22_2685).
EU Considers Use of Sanctioned Assets to Aid Ukraine: Poland is currently leading advocacy efforts at the EU to use the proceeds from seized, sanctioned assets to aid Ukraine. EU officials note that legal authority for such sales would require careful consideration, but the idea is gaining traction in partner nations, like the US and Canada. (https://www.ft.com/content/91ffdd88-fa02-4ae2-931d-f47f042e9ed4).
Bulgaria Exploring Legal Challenge to Gas Shutoff: In a Wednesday interview with CNN, Bulgarian Energy Minister Alexander Nikolov said that the Bulgarian government is exporting legal options to challenge Gazprombank’s shutoff of Russian gas supplies to the country. He said “Bulgargaz, the state-owned entity, has executed the payment and then the money got returned from Gazprom. If we’re talking about a breach of the contract, then it is absolutely clear from a legal and legislation perspective who has breached the contract.” (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-04-27-22/h_bc99d68e7e53749491cbf56a5a8f75e8).
Finland Prepared to Impose Harsher Sanctions on Russia: Speaking at a Veteran’s Day address on Wednesday, Finnish Prime Minister Sanna Marin said that the country was ready to impose tougher sanctions on Russia due to its invasion of Ukraine. She said, “We have sought to influence Russia’s actions by imposing severe sanctions on the country. We are also prepared to impose harsher sanctions. Our stance is clear: cooperation with Russia is not possible as long as the brutal attack continues.” (https://yle.fi/news/3-12420390).
Total Takes Accounting Charge on its Natural Gas Reserves due to Russia Sanctions: French energy provider Total announced on Wednesday that it had taken a $4.1 billion accounting charge on the value of its natural gas reserves as a result of sanctions targeting Russia. Total is one of the few major European gas producers that has not committed to exiting Russian holdings following the invasion of Ukraine, saying a withdrawal would enrich Russia. The write-down indicates that it can no longer count on anticipated reserves located in Russia. (https://www.wsj.com/articles/frances-total-takes-4-1-billion-charge-related-to-russia-sanctions-11651093105?mod=livecoverage_web).
European Commission Updates Russia Sanctions Guidance: On April 26, the European Commission updated its existing guidance on sanctions and central securities depositories, maritime safety and intellectual property rights. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
Poland Sanctions 50 Russian Firms and Oligarchs, Including Gazprom: On April 26, Poland announced that it is imposing sanctions on 50 Russian oligarchs and companies in the form of asset freeze measures and, for individuals, travel ban measures. Targets include Gazprom, Acron, SUEK Polska and KTK Polska. These measures go beyond the sanctions adopted at the EU level. (https://www.reuters.com/world/europe/poland-sanctions-gazprom-among-50-russian-firms-oligarchs-2022-04-26/).
Draft Russian Oil Ban Not Expected to Be Presented to EU Member States on Wednesday: While the European Commission initially planned to present its proposal for a ban on Russian oil imports early this week, it is reported that the proposal will not even be presented to the Member States for their meeting of Wednesday, noting that bilateral meetings between the European Commission and the Member States – aimed at crafting a compromise – have not taken place yet. (https://www.politico.eu/article/russia-ukraine-oil-sanctions-eu-waiting-game-vladimir-putin/).
Estonian President Calls for More Support to Help Ukraine: In an article for Politico, the president of Estonia emphasized that “[e]conomic sanctions must be strong and effective, without exception, and for immediate implementation”, stressed that “[w]e need an oil embargo, and we need it now” and reiterated Estonia’s proposal for an “escrow” to be set up for gas, whereas “[p]art of the payment for gas will be made directly to Russia, while the other part will be transferred to a separate account, frozen for Ukraine, which will be able to use it in the future to rebuild its destroyed nation.” (https://www.politico.eu/article/its-time-to-be-bolder-to-help-ukraine/).
German Energy Minister Predicts Independence from Russian Oil Within Days: During a visit to Poland, German Energy Minister Robert Habeck said “an [oil] embargo has become manageable for Germany,” since the country may be able to find replacements for Russian oil “within days.” This significantly speeds up Habeck’s previous predictions on German independence from Russian oil, which estimated independence by the end of the year. (https://www.reuters.com/business/energy/germany-aims-find-alternative-russian-oil-within-days-2022-04-26/).
Luxembourg Foreign Minister Says Sanctions “Only Way” to Isolate Russia: Speaking at a Tuesday conference in New Delhi, Luxembourg Foreign Minister Jean Asselborn said, “We know that if we discussed the sanctions with Security Council then we have no chance of getting approval as China and Russia who are permanent members of UNSC would never give the vote to our sanction. So this was in our means, and only possible way to say to the Russian President that if you do this then you will be excluded from the international community.” (https://www.devdiscourse.com/article/international/2016181-luxembourg-foreign-minister-thinks-sanctions-only-way-to-stop-russia-from-attacking-ukraine).
European Commission Updates Russia Sanctions Guidance: On April 25, the European Commission updated its existing guidance on sanctions and customs-related matters and sanctions affecting deposits. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Prepares Sixth Sanctions Package: The sixth sanctions package being prepared by the European Commission is reported to include some form of ban on Russian oil and the exclusion of more Russian banks from SWIFT, while the Baltic countries continue to push for more measures against Russian disinformation. (https://www.politico.eu/article/eu-sanction-valdimir-putin-russia-ukraine/).
But No Proposal Expected Until Next Week: According to reports, the presentation and adoption of the sixth sanctions package is more likely to take place next week, despite a meeting of EU ambassadors being scheduled for Wednesday. (https://twitter.com/laurnorman/status/1518584302652567552).
HR Borrell Confirms There is No Agreement on Russian Oil Ban: The EU’s High Representative confirmed that there was not sufficient support from EU Member States yet for a complete embargo or punitive tariff on Russian oil and gas imports. (https://www.reuters.com/business/energy/borrell-says-no-eu-agreement-russian-energy-embargo-2022-04-25/).
EU to Launch Solar Strategy to Reduce Dependence on Russian Fossil Fuels: Speaking at the International Solar Alliance on Sunday, European Commission President Ursula Von Der Leyen said that the EU would be launching a new domestic solar strategy next month as part of its new REPowerEU initiative, to reduce European dependence on Russia. She stated, “For us, Europeans, it is a stark reminder that our dependency on Russian fossil fuels is not sustainable. Because how can you do business with someone, who openly threatens Europe and wages war against one of your closest neighbours?” (https://ec.europa.eu/commission/presscorner/detail/en/speech_22_2602).
German Cabinet Backs Possible Nationalization of Energy Firms: Germany’s cabinet on Monday approved a legal amendment that would enable the government to seize ownership of energy companies as a measure of last resort to secure supplies in the event of an emergency. (https://www.reuters.com/business/energy/german-cabinet-backs-possible-nationalization-energy-firms-2022-04-25/).
European Commission Publishes Updated Russia Sanctions Guidance: The European Commission published updated FAQs regarding EU sanctions concerning banknotes, gas imports, and the energy sector. In particular, the guidance clarifies the EU’s position on Russia’s natural gas payment scheme through Gazprombank. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European External Action Service and US Department of State Issue Joint Statement: The joint statement by the EEAS Secretary General and US Deputy Secretary of State stresses commends “the exceptional display of transatlantic unity and EU-U.S. coordination in response to Russia’s unprovoked military aggression against Ukraine, including on sanctions and export controls”, stressed the “importance of continued coordination on the provision of security assistance to Ukraine and the implementation and enforcement of sanctions targeting Russia and Belarus, together with other like-minded partners” and urged China not to circumvent or undermine sanctions against Russia. The pair added that China should not provide any form of support for Russia’s aggression against Ukraine, and reaffirmed that such support would have consequences for the US’ and EU’s relationships with China. (https://www.eeas.europa.eu/eeas/eu-us-consultations-between-eeas-secretary-general-stefano-sannino-and-united-states-deputy_en).
Commissioner for Trade Calls for Additional Sanctions Against Russia: Speaking at a conference in Washington, Commissioner Dombrovskis stressed that the EU should do everything possible to help Ukraine, including “more and tougher sanctions on Russia” (https://twitter.com/VDombrovskis/status/1517522475223076864).
Amsterdam Trade Bank Declares Bankruptcy:On Friday, the Dutch Central Bank announced that Amsterdam Trade Bank, a smaller subsidiary of sanctioned Russian bank Alfa Bank specializing in trade financing, had declared bankruptcy. The bank said that US and UK sanctions on Alfa Bank had caused operational difficulties, since many of the bank’s counterparties “find it difficult to continue supporting ATB.” (https://www.reuters.com/business/finance/amsterdam-trade-bank-part-russias-alfa-bank-declared-bankrupt-2022-04-22/).
The Netherlands Prepared to Stop Russian Oil and Gas Imports This Year: Speaking on Friday, Dutch Minister for Climate and Energy Policy Rob Jetten stated that the country is “firmly committed” to ending the import of Russian oil and gas by the end of the year. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-04-22-22/h_a62aea68a2ec64ae6309d3cd01bf266d).
EU Sanctions Two Additional Individuals: On April 21, the EU adopted asset freeze measures against two individuals, Serhiy Vitaliyovich Kurchenko and Yevgeniy Viktorovich Prigozhin. (https://www.consilium.europa.eu/en/press/press-releases/2022/04/21/ukraine-eu-sanctions-two-additional-businesspeople-in-relation-to-the-illegal-annexation-of-crimea/).
European Commission Publishes Updated Russia Sanctions Guidance: The European Commission published updated FAQs regarding EU sanctions concerning banknotes, deposits, re-financing, the Russian Central Bank, investments in the Russian energy sector and the provision of humanitarian aid. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Publishes Updated List of Competent Authorities: On April 20, 2022, the European Commission published an updated list of national competent authorities for the implementation of EU sanctions. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/national-competent-authorities-sanctions-implementation_en.pdf).
EU Weighs Various Options for Russian Oil Ban: The European Commission is reported to fine-tune a phase-out of Russian oil imports to be presented to EU Member States next week. There are fears that the proposed mechanism will be watered down to win support from hesitant Member States, notably Germany, Hungary, Austria, the Czech Republic, Slovakia and Bulgaria which fear the economic consequences. The Russian oil ban is expected to differentiate between various grades of Russian oil and whether it is delivered by tanker or pipeline and to be subject to a transition period. (https://www.politico.eu/article/eu-closes-in-on-russian-oil-ban-vladimir-putin-ukraine/).
Shell In Talks With Chinese Companies to Sell Stake in Russian Gas Project: Shell is reported to be in talks with CNOOC Ltd, CNPC and Sinopec to sell its participation in the Sakhalin-2 liquefied natural gas venture. (https://www.reuters.com/business/energy/shell-talks-with-chinese-firms-sell-stake-russian-gas-project-telegraph-2022-04-21/).
Greece to Release Impounded Russian Tanker: Greece is set to release a Russian tanker that had been impounded due to EU sanctions targeting Promsvyazbank. Following checks, Greece concluded that Promsvyazbank is no longer the owner of the tanker and there were no legal grounds to continue impounding it. (https://www.reuters.com/world/europe/greece-release-russian-tanker-amid-confusion-over-sanctions-2022-04-21/).
P&G Says It May Be Unable to Operate in Russia: P&G, which had already taken steps to end new capital investments in Russia and reduce its portfolio to basic hygiene, health and personal care items, stated that it may not be able to stay in business in Russia because of sanctions, restrictions on financial institutions, supply challenges and monetary controls. (https://www.reuters.com/business/tide-detergent-maker-pg-says-may-be-unable-operate-russia-2022-04-20/).
Austria Stopped Importing Russian Oil in March: On Thursday, representatives from Austrian gas company OMV told Russian news outlet TASS that Austria stopped importing and refining oil from Russia in March. Only 7.8 percent of Austrian oil comes from Russia per year, though the country is much more dependent on Russian natural gas. (https://tass.com/economy/1440957).
Crypto Exchange Binance to Limit Offerings in Russia Due to EU Sanctions: On Thursday, crypto exchange Binance announced that it was transitioning accounts with assets exceeding 10,000 euros in value to withdraw-only mode, as a result of recent EU sanctions that banned high-value transactions in digital assets. Sources familiar with the matter estimate that fewer than 50,000 users hold accounts with a value exceeding 10,000 euros, though Russia is one of Binance’s top five markets globally. (https://www.bloomberg.com/news/articles/2022-04-21/binance-set-to-curb-services-to-russia-users-after-eu-sanctions).
Council President Discusses Sanctions with Ukrainian President: Following his visit to Kiev, Charles Michel stated that he discussed sanctions with Ukrainian President Volodymyr Zelenskyy, noting that “today, we went into more detail and identified some additional elements for us to put proposals on the table of the Council and to be able to maintain the maximum pressure on Russia.” (https://www.consilium.europa.eu/en/press/press-releases/2022/04/20/remarks-by-president-charles-michel-at-the-press-conference-following-his-meeting-with-president-volodymyr-zelenskyy-in-kyiv/).
European Commission Works to Cut Cost of Russia Oil Ban: The European Commission is reported to consider tools to persuade skeptical Member States to accept a ban on Russian oil, including prolonged wind-down periods or a gradual ban. While some Member States are pushing for additional measures (including a ban on nuclear fuel, disconnecting Sberbank and Gazprombank from SWIFT and additional media bans), no date has been set yet to propose a sixth sanctions package. (https://www.reuters.com/business/energy/eu-works-cut-cost-russia-oil-ban-win-over-sceptics-source-2022-04-20/).
Latvia Confirms the EU Is Preparing Measures to Prevent Russia From Evading Sanctions: The Latvian Foreign Minister declared on Wednesday that the EU is preparing new measures to prevent Russia from evading sanctions. (https://www.reuters.com/world/europe/eu-preparing-measures-prevent-russia-evading-sanctions-latvia-says-2022-04-20/).
European Central Bank Says All Euro Zone Banks Can Withstand Russian Write-Off: The European Central Bank’s top supervisor stated in a letter that all large euro zone banks can withstand a full write-off of their Russian exposure and still respect their capital requirements. (https://www.reuters.com/business/finance/all-large-euro-zone-banks-can-withstand-russian-write-off-ecb-says-2022-04-20/).
Henkel Exits Russia: On Wednesday, German consumer goods manufacturer Henkel announced that it has decided to exit its business in Russia; it previously announced that it would freeze new investment in Russia. The company will continue to pay its employees after the shutdown. (https://www.henkel.com/press-and-media/press-releases-and-kits/2022-04-19-henkel-to-exit-its-business-in-russia-1654222).
European Commission Updates Russia Sanctions Guidance: The European Commission published update guidance regarding (i) general sanctions issues, (ii) road transport sanctions and (iii) sanctions affecting the sales of securities. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
Italy Says Western Leaders Agreed to Step Up Pressure on Moscow: In a statement following a Tuesday video meeting of Western leaders, Italian Prime Minister said there was “was broad consensus on the need to step up pressure on the Kremlin, including by adopting further sanctions, and to increase Moscow’s international isolation.” (https://www.reuters.com/world/europe/italy-says-western-leaders-agreed-step-up-pressure-moscow-statement-2022-04-19/).
France Supports Russian Oil Import Ban:Speaking to Europe 1 Radio on Tuesday, French Economy Minister Bruno Le Maire said that France is urging other EU countries to support a ban on oil imports from Russia, noting that oil has been President Putin’s “primary source of currency” for several years. While France supports the ban, Minister Le Maire stated that several “European partners” are still hesitant to impose such a ban. (https://www.politico.eu/article/france-bruno-le-maire-eu-prioritize-ban-russia-oil-gas/).
Stellanis to Suspend Russian Operations: On Tuesday, carmaker Stellanis announced that it would suspend operations in Russia due to sanctions and logistical difficulties. The carmaker sold Peugeot, Citroen, Opel, Jeep, and Fiat vehicles in Russia, but only has one percent of the country’s market. The company had already suspended import and export transactions with Russia, and does not know how long the suspension of operations will last. (https://www.reuters.com/business/autos-transportation/stellantis-says-it-is-suspending-production-russia-2022-04-19/).
German Car Parts Supplier Resumes Tire Production in Russia: Tire manufacturer Continental AG has announced the temporary resumption of its tire production for passenger cars in Russia to protect local workers from criminal charges. (https://www.reuters.com/business/autos-transportation/continental-restarts-tyre-making-russian-plant-protect-workers-2022-04-19/).
Greece Impounds Russian Oil Tanker as Part of EU Sanctions: On Tuesday, Greek authorities impounded the Russian oil tanker Pegas off the coast of the Greek island of Evia. Greek authorities stated that the seizure was due to EU sanctions on Russia; the bloc has banned Russian-flagged vessels from entering EU ports, with some exceptions. The vessel’s cargo has not been seized. The Russian Embassy in Athens is working with the Greek government on the seizure. (https://www.reuters.com/world/europe/greece-seizes-russian-tanker-part-eu-sanctions-2022-04-19/).
Hungary to Oppose Energy Sanctions: Speaking during a Tuesday news briefing, Hungarian Foreign Minister Peter Szijjarto stated that the country will not support any sanctions on Russian oil or gas, reiterating statements from the Hungarian government from last week. He added that Hungary will also continue cooperation with Russia in nuclear energy projects. (https://www.independent.co.uk/news/world/europe/hungary-russian-oil-gas-ukraine-b2060671.html).
EU Adopts New Exemptions & Derogations for Humanitarian Purposes: On Thursday, the EU adopted new legal texts which provide for:
o New derogations (i.e., possibility to request an authorization) from asset freeze measures for humanitarian purposes;
o New exemptions and derogations from certain trade control restrictions applicable to Donetsk/Luhansk for humanitarian purposes.
EU Updates Russia Sanctions Guidance: The EU recently updated guidances on technical assistance, sales of securities and crypto-assets. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
Europe Reluctantly Readies Russian Oil Embargo: On Thursday, the New York Timesreported that EU officials were drafting plans for a phased import ban on Russian oil, although the measures would not be discussed until after the second round of the French presidential elections at the earliest. (https://www.nytimes.com/2022/04/14/world/europe/european-union-oil-embargo-russia-ukraine.html).
Brussels Warns EU Countries that Ruble Gas Payments May Breach Sanctions: The European Commission has been reported to have circulated a preliminary legal assessment according to which the payment system contemplated for the purchase of gas in rubles, whereby currencies are switched through accounts held by Gazprombank,risks breaching sanctions by granting Russia control over the timing and rate of foreign currency conversion, as well as by breaching sanctions against Gazprombank. (https://www.politico.eu/article/brussels-warns-eu-countries-that-ruble-gas-payments-may-breach-sanctions/).
Netherlands Instructs Energy Companies to Not Pay for Russian Gas in Rubles: On Thursday, the Dutch government instructed energy companies operating in its territory to refuse Russia’s new terms for purchasing gas, saying that it agreed with the European Commission’s interpretation of the policy that paying for gas through Russia’s Gazprombank scheme violates EU sanctions. The move may inspire other European countries to institute similar restrictions on Russian energy payments. (https://www.bloomberg.com/news/articles/2022-04-14/netherlands-tells-its-companies-not-to-pay-for-gas-in-rubles).
Airbus Urges EU Leaders to Not Restrict Russian Titanium Imports: On Tuesday, Airbus Chief Executive Guillaume Faury said at an annual shareholder’s meeting that EU sanctions on titanium “would not be appropriate.” Titanium is a critical component in airline parts, and Russia is the world’s largest producer of titanium. After the meeting, Airbus spokesmen added that sanctions on titanium would harm the EU more than they would harm Russia. (https://www.reuters.com/business/aerospace-defense/airbus-accelerates-hunt-alternative-titanium-supplies-2022-04-12/).
European Space Agency Ends Cooperation with Russia on Moon Missions: On Wednesday, the European Space Agency (“ESA”) announced that it would suspend cooperation with Russia on the upcoming Luna-25 -26 and -27 missions as a result of Russia’s invasion of Ukraine. The ESA announced that the agency would instead partner with NASA to get the equipment scheduled for these missions to the moon’s surface. (https://www.esa.int/Newsroom/Press_Releases/Redirecting_ESA_programmes_in_response_to_geopolitical_crisis).
Nokia Exits Russia: On Tuesday, Finnish telecommunications provider Nokia announced that, over the last few weeks, the company has “suspended deliveries, stopped new business and are moving our limited R&D activities out of Russia.” The company promised to maintain telecommunications networks it operates in Russia so that outside perspectives can reach the Russian people. Nokia said that the decision should not impact revenue projections for 2022. (https://www.nokia.com/about-us/news/releases/2022/04/12/nokia-to-exit-the-russian-market-no-impact-to-financial-outlook/#:~:text=Over%20the%20last%20weeks%20we,and%20wellbeing%20of%20our%20employees.).
EU Foreign Affairs Ministers Meet to Discuss Sanctions: HR Borrell confirmed that Foreign Affairs Ministers had “continued discussing how to implement these sanctions to avoid any kind of loopholes” and will “continue discussing to see what else can be done. Nothing is off the table, including sanctions on oil and gas. But today, no decision was taken, [it was] just a general discussion analysing the figures”. HR Borrell also confirmed that the EU would first target oil, before gas, as it “is a heavy bill and easier to replace.” (https://www.eeas.europa.eu/eeas/foreign-affairs-council-remarks-high-representative-josep-borrell-press-conference-0_en).
European Commission Prepares Oil Embargo:The Foreign Ministers of Ireland, Lithuania and Netherlands confirmed on Monday that the European Commission was drafting proposals for an EU oil embargo as part of the next sanctions package, though Member States continue to discuss technical details on the scope and phase-in of such a move. Hungary continues to oppose the move and other Member States remain skeptical. (https://www.reuters.com/business/energy/russian-oil-embargo-could-be-part-next-eu-sanctions-package-ministers-say-2022-04-11/).
EU Countries Remain at Loggerheads Over Russian Energy Ban: EU Member States are still reported to have diverging views with regard to a potential ban on imports of Russian energy, due to fears of exacerbating the surge in energy prices. While the European Commission is working on a proposal to restrict oil imports, either through a ban or other measures, new measures were only informally discussed at the meeting of Foreign Affairs Ministers on Monday. (https://www.ft.com/content/540807a8-0e3e-4843-9aee-25b65a724217). The absence of any specific timeline for the imposition of measures on Russian oil was also implicitly confirmed by HR Borrell, speaking before the Foreign Affairs Council meeting, who simply stated that “[s]anctions are always on the table. (…) the Ministers will discuss about what are the next steps.” (https://www.eeas.europa.eu/eeas/foreign-affairs-council-remarks-high-representative-josep-borrell-upon-arrival-1_en).
Sixth Sanctions Package Could Be Presented After Easter: Following the meeting of Foreign Affairs Ministers on Monday, the European Commission is reported to consider presenting a sixth sanctions package, including sanctions on Russian oil, after Easter. (https://twitter.com/RikardJozwiak/status/1513509251007799302).
European Commission Updates Sanctions Guidance: The European Commission has published update guidance documents with regard to (i) general questions, (ii) asset freeze measures, (iii) central securities depositories, (iv) luxury goods and (v) access to EU ports. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
European Commission Updates List of Competent Authorities: The European Commission has published an updated list of competent authorities for sanctions matters. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/national-competent-authorities-sanctions-implementation_en.pdf).
Swedish Company Ericsson Announces “Indefinite Suspension” of Russian Business:Swedish company Ericsson – which had already suspended deliveries to Russia – announced on Monday that they had suspended all business activities in Russia for an indefinite period of time, setting aside provisions for losses and placing local staff on paid leave. (https://www.ft.com/content/dc09be0f-fec1-4b17-b660-94ae6acf9950).
France-Based Société Générale to Sell Stake in Rosbank to Russian Oligarch: Société Générale is reported to consider the sale of its participation in Rosbank and its Russian insurance operations to a holding company owned by Vladimir Potanin. (https://www.ft.com/content/21b64f70-e71e-47d7-bf24-ad90dfa6a854).
Danish Saxo Bank Terminates Russian and Belarusian Clients: The bank announced its decision to terminate all Russian and Belarusian clients was made as a result of sanctions, and would take full effect on June 8. (https://www.reuters.com/world/europe/saxo-bank-terminates-russian-belarussian-clients-following-sanctions-2022-04-09/).
VTB No Longer Has Control of EU Subsidiary According to German Regulator: German regulator BaFin reportedly took the view that VTB no longer exercises control over its EU subsidiary due to measures ring-fencing VTB Bank (Europe) SE from its parent company. (https://www.bafin.de/SharedDocs/Veroeffentlichungen/DE/Pressemitteilung/2022/pm_2022_04_10_VTB_Bank.html).
EU Adds 21 Russian Airlines to the EU Air Safety List: The EU Air Safety List details airlines that are subject to an operating ban or operational restrictions within the EU because they do not meet international safety standards. 21 Russian airlines were added due to serious safety concerns linked to Russia’s forced re-registration of foreign-owned aircraft, knowingly allowing their operation without valid certificates of airworthiness. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2389).
Czech Prime Minister States that the Czech Republic Could Cut Russian Energy Imports in 5 Years: The Czech Prime Minister has been quoted as considering the country’s reliance on Russian energy “one of the greatest security risks,” with the goal of completely avoiding dependence on Russian energy within the next 5 years. (https://www.reuters.com/business/energy/czechs-should-cut-energy-dependence-russia-within-five-years-prime-minister-2022-04-09/).
France Expels Six Russian Diplomats: On Sunday, France announced that it was expelling six Russian diplomats suspected of working as spies under diplomatic cover in Paris. These expulsions add to the 35 expulsions announced earlier last week. (https://www.france24.com/en/france/20220411-france-expels-six-suspected-russian-spies-operating-under-diplomatic-cover).
Italy Signs Gas Deal with Algeria: On Monday, Italy announced an agreement with Algeria that would increase Italian gas imports from Algeria by 40 percent. The move was likely done to reduce Italy’s reliance on Russia as a source for natural gas imports. Italian Prime Minister Mario Draghi, who signed the deal, said “others will follow,” referencing other deals. (https://www.reuters.com/business/energy/italy-signs-deal-with-algeria-increase-gas-imports-2022-04-11/).
Austrian Federal Chancellor Meets with Putin: on Monday, Federal Chancellor Nehammer met with Putin and conveyed the message that “sanctions against Russia will remain in place and will continue to be tightened as long as people continue to die in Ukraine” (https://twitter.com/samgadjones/status/1513525787818926083).
Chancellor Scholz Discusses Sanctions with President Zelenskyy: On Sunday, German Chancellor Olaf Scholz held a phone call with Ukrainian President Volodymyr Zelenskyy. According to President Zelenskyy’s account of the call, the two discussed “anti-Russian sanctions, defense and financial support for Ukraine.”Germany has been hesitant to impose restrictions on energy imports from Russia, while President Zelenskyy has vocally called for such restrictions in recent weeks. (https://twitter.com/ZelenskyyUa/status/1513097304861032450?s=20&t=r2xNQFDWtXsk3-Ksl1iWyQ).
Austrian Chancellor Visits Kyiv, Signals Readiness for More Sanctions: Austrian Chancellor Karl Nehammer visited Kyiv on Saturday to discuss military and financial support to the country. He stated that the EU was willing to implement more sanctions on Russia, and Ukrainian President Volodymyr Zelenskyy welcomed this development. (https://www.cnn.com/europe/live-news/ukraine-russia-putin-news-04-09-22/h_5924a1326021f43c242aeb7888fd7560).
EU Adopts 5th Sanctions Package: the EU has adopted its 5th sanctions package against Russia through a series of legal actions (Legal Texts: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2022:110:TOC and https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2022:111:TOC). These include the following:
o Asset freeze measures against four Russian Banks (VTB Bank, Bank Otkritie, Novikombank, Sovcombank) as well as 18 entities and 217 individuals, including oligarchs, businesspeople, Kremlin officials, proponents of disinformation and information manipulation, as well as family members.
Member States may, in their discretion, choose to authorize certain wind-down activities, by 9 October 2022 for:
(i) operations, contracts, or other agreements, including correspondent banking relations, concluded with the 4 sanctioned Russian banks before 8 April 2022; or,
(ii) where necessary for the sale and transfer of rights in a legal person, entity or body established in the Union where those proprietary rights are directly or indirectly owned by a sanctioned person, provided the proceeds of such sale and transfer remain frozen.
o Additional financial measures including:
(i) Cryptocurrency Service Restrictions to prohibit the provision of crypto-asset wallet, account or custody services to Russian nationals, residents or entities, if the total value of crypto-assets per wallet, account or custody provider exceeds EUR 10,000. This adds to existing financial sanctions prohibiting the acceptance of deposits from Russian nationals, residents or entities whose existing deposits exceed EUR 100,000 per credit institution.
(ii) Restrictions on Trusts, prohibiting the provision of certain trust registration or management services to trusts having as a trustor or beneficiary: (i) Russian nationals, residents, or entities; (ii) any entity owned or controlled by any individual or entity described in (i); or (iii) any individual or entity acting on behalf or at the direction of any of the foregoing. The prohibitions also cover acting, or arranging for another person to act, as a trustee, nominee shareholder, director, secretary or a similar position, for such a trust.
o Additional Import Bans and Import-Related Technical, Financial and Other Service Prohibitions including:
(i) Coal and Solid Fossil Fuel Restrictions which prohibit any purchase, import or transfer into the EU, directly or indirectly, of coal and other solid fossil fuels, as listed in Annex XXII of Regulation 833/2014, that are of Russian origin or otherwise exported from Russia The prohibition extends to technical assistance, brokering or other services as well as the provision of manufacture, maintenance and use of the foregoing items directly or indirectly in relation to the import ban, as well as to related financing and financial assistance.
(ii) Other Significant Russian Imports, further expanding the import ban to include an expansive list of items which generate significant revenues for Russia, as set forth in Annex XXI of Regulation 833/2014, including but not limited to various chemical agents and compounds, cement, rubber products, wood, spirits, liquor, high-end seafood, glass products, aluminum plates, sheets and strip.
As a result of the new ban on coal and solid fossil fuels imports, exceptions / authorizations that were available for trade control measures in relation to imports of coal or solid fossil fuels have been removed.
o Additional Export and Export-Related Technical, Financial and Other Service Prohibitions including:
(i) Items Determined to Contribute to the Enhancement of Russian Industrial Capacities, as listed in Annex XXIII of Regulation 833/2014, which covers an extensive list of additional products including but not limited to certain machinery and mechanical appliances, rail, tractors, vehicles and vehicle parts, optical products, plants, mineral products, chemicals, tanning or dyeing extracts, lubricants, glues, photographic or cinematographic goods, plastics, rubber products, wood, pulp, paper, textiles and textiles articles, stones, plaster, ceramic, glass and glassware, and base metals. The prohibition extends to technical assistance, brokering or other services as well as the provision of manufacture, maintenance and use of the foregoing items directly or indirectly in relation to the import ban, as well as to related financing and financial assistance.
(ii) Jet fuel and fuel additives, as listed in Annex XX of Regulation 833/2014;
(iii) Arms Ban imposing a complete prohibition on exports and services related to arms and related materials of all types (i.e., removing the prior contract exception that applied based on the previous arms embargo enacted in 2014).
(iv) Further Expansion of Existing Control Lists including:
– Annex VII of Regulation 833/2014 has been extended to cover miscellaneous items, including quantum computing, advanced semiconductors, sensitive machinery, transportation and chemicals;
– Annex X of Regulation 833/2014 has been extended to cover items suited for use in oil refiningand items suited for use in liquefaction of natural gas, as listed in Annex X of Regulation 833/2014 (which has also been amended to clarify that controls do not cover the full customs codes listed in that annex);
– Annex XVIII of Regulation 833/2014 (luxury items) has been extended to cover certain optical articles and equipment of any value.
These prohibitions are subject to exceptions and/or authorizations, including for winding down operations.
o Restrictions on the transport sector including:
(i) A ban on Russian ‘road transport undertakings’ (land freight companies), preventing them from transporting goods by road within the EU, including in transit;
(ii) A ban on access to EU ports for Russian-flagged vessels after April 16, 2022, including for vessels that have changed their Russian flag or registration after February 24, 2022.
These bans are subject to a number of exceptions and/or authorizations.
o Public Funding and Contracting Restrictions including:
(i) Public Procurement Prohibitions on awarding or continuing the execution of public procurement contracts to or with (i) Russian nationals and entities established in Russia, (ii) entities whose proprietary rights are more than 50% owned by them and (iii) individuals or entities acting on their behalf or at their direction (including subcontractors, suppliers or entities whose capacities are being relied on, where they account for more than 10 % of the contract value).
This ban is subject to a number of authorizations, as well as a wind-down exception until October 10, 2022.
(ii) Public Financing and Financial Assistance Prohibitions on the provision to Russian entities with over 50% public ownership or public control of financing, financial assistance and benefits under any EU, Euratom or Member State programs (e.g., Horizon 2020, Horizon Europe, Euratom, Erasmus+), subject to certain exceptions.
o Expansion of Existing Reporting obligations to cover detected instances of breach, circumvention and attempts at breach or circumvention of the prohibitions set out in this Regulation through the use of crypto-assets.
o Clarifications on existing restrictions including
(i) Amendments to the grounds for exemptions and authorizations in relation to prohibitions on dual-use items and advanced technology items as listed in Annex VII of Regulation 833/2014;
(ii) Extension of prohibitions on the sale, supply, transfer or export to Russia or for use in Russia of EUR-denominated banknotes to all banknotes denominated in EU currencies;
(iii) Extension of prohibitions on the sale of EUR-denominated transferable securities to Russian citizens, residents and entities to all transferable securities denominated in EU currencies.
o Additional Belarus Restrictions. The 5th sanctions package also covers Belarus and provides for the following measures:
(i) A ban on Belarusian road transport undertakings, preventing them from transporting goods by road within the EU, including in transit;
(ii) Extension of prohibitions on the sale, supply, transfer or export to Belarus or for use in Belarus of EUR-denominated banknotes to all banknotes denominated in EU currencies;
(iii) Extension of prohibitions on the sale of EUR-denominated transferable securities to Russian citizens, residents and entities to all transferable securities denominated in EU currencies.
Effective Dates. The new asset freeze measures entered into force as from their publication in the Official Journal on April 8, 2022. Other measures enter into force on April 9, 2022.
Press releases and Q&A:
European Commission Announces That €30 Billion of Russian and Belarussian Assets Have Been Frozen: Following a meeting of the “Freeze and Seize Task Force” established to ensure coordination of the enforcement of EU sanctions against Russia and Belarus, the European Commission announced that €29.5 billion of Russian and Belarussian assets have been frozen, while about €196 billion of transactions have been blocked as reported by more than half of the Member States. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2373).
EU Oil Embargo on Russia Expected “Sooner Rather than Later”: EU officials, including High Representative Borrell, have been reported to believe that the adoption of a ban on Russian oil import was “more of question of when, rather than if”, as political pressure for such a move is mounting. Some Member States are also considering pushing for nuclear fuel to be part of the sanctions regime, in addition to the controversial gas sanctions. (https://www.ft.com/content/fe2aee92-4a98-4158-9f4e-e5b5a38becbf).
But Russian Oil Embargo Will Not Be Tabled at EU Meeting on Monday: According to a senior EU official, there will be no formal proposal for a Russian oil embargo to be discussed by Member States at the meeting of EU foreign ministers scheduled for next Monday, due to divisions between Member States. (https://www.reuters.com/article/ukraine-crisis-eu-oil-idAFL5N2W63D9).
Hungary Reported to Be the Loudest Opponent to an Oil Ban: Hungarian Prime Minister, Viktor Orbán, is reported to be the “single biggest roadblock to ratcheting up sanctions” on Russian oil, as Germany becomes increasingly open to the idea. Hungary however continues to claim that it will block any sanctions on oil and gas. (https://www.politico.eu/article/hungary-emerges-as-main-roadblock-in-future-oil-sanctions-against-russia/).
European, Parliament Calls for a Full Embargo on Russian Oil, Coal, Gas and Nuclear Fuel: In a resolution adopted on Thursday, the European Parliament called for additional punitive measures against Russia, including “an immediate full embargo on Russian imports of oil, coal, nuclear fuel and gas,” the exclusion of Russia from the G20 and other multilateral organizations, the exclusion of Russian banks from SWIFT, a ban on Russian vessels’ access to EU ports and road freight transport from and to Russia and Belarus and the seizure of all assets belonging to Russian officials or the oligarchs associated with Putin’s regime, their proxies and strawmen and those in Belarus linked to Lukashenka’s regime. (https://www.europarl.europa.eu/news/en/press-room/20220401IPR26524/meps-demand-full-embargo-on-russian-imports-of-oil-coal-nuclear-fuel-and-gas).
Finland Will Return Seized Art Works to Russia: Following the introduction of an exception to the export ban on luxury goods for cultural artifacts, Finland has announced that it will return art works that had been on loan from Russian museums. (https://www.reuters.com/world/europe/russia-says-paintings-seized-finland-return-this-weekend-2022-04-08/).
Von der Leyen States Payments for Gas in Rubles Violate EU Sanctions: In a Friday interview with CNN, European Commission President Ursula Von der Leyen said that any payments for Russian gas made in rubles would be a violation of EU sanctions law. The announcement comes after Hungarian President Viktor Orban stated a willingness to pay for Russian gas with rubles earlier this week. President Von der Leyen stated in the interview that the EU was in negotiations with Hungary on the issue of sanctions compliance. (https://www.cnn.com/europe/live-news/ukraine-russia-putin-news-04-08-22/h_fa7065e787fefaff368b02dc2150d472).
Germany Could End Russian Oil Imports This Year: During a Friday press appearance, German Chancellor Olaf Scholz stated that Germany could end Russian imports “this year.” He added, “we are actively working to get independent from the import of [Russian] oil.” (https://www.reuters.com/business/energy/germany-could-end-russian-oil-imports-this-year-scholz-2022-04-08/).
Member States Agree on 5th Sanctions Package With Adoption Expected Tomorrow: EU Member States have agreed to adopt a 5th sanctions package against Russia. This package is currently subject to a written procedure due to be concluded by tomorrow morning. New measures should be published after that in the Official Journal of the EU. The French Presidency of the Council confirmed the package includes (i) sanctions against oligarchs, Russian propaganda actors, members of the security and military apparatus and entities in the industrial and technological sector linked to the Russian aggression against Ukraine, (ii) asset freezes against several Russian banks, (iii) ban on coal imports from Russia, (iv) embargo on arms to Russia, (v) ban on exports to Russia, including high-ban on imports from Russia of raw and critical materials, (vii) ban on access to EU ports for ships flying the Russian flag and (viii) ban on Russian and Belarusian road transporters. (https://twitter.com/Europe2022FR/status/1512154182299619332).
Member States Agree on Russian Coal Ban… With a 4-Month Wind Down: Member States have been reported to have agreed on a 4-month wind-down period for current coal contracts, following push by Germany to extend this period. Spot purchases will be halted immediately. (https://www.reuters.com/business/energy/eus-full-ban-russian-coal-be-pushed-back-mid-august-source-2022-04-07/).
HR Borrell Confirms the EU Member States Will Discuss Oil Embargo Next Monday: Speaking upon arrival for the NATO Ministerial meeting, High Representative Borrell confirmed that, further to the 5th sanctions package expected tomorrow – the EU Foreign Affairs Ministers will discuss the possibility of an oil embargo at their meeting on next Monday. (https://www.eeas.europa.eu/eeas/nato-remarks-high-representative-josep-borrell-upon-arrival-ministerial-meeting-0_en).
Finnish Foreign Minister Say Seized Russian Artworks Should be Returned to Museums: Following the announcement that Finnish customs had seized works of art worth around 42 million euros due to EU sanctions on luxury goods, the Finnish Foreign Minister stated such works of art should be able to be returned to museums, although current EU rules do not provide for such an exception. (https://www.reuters.com/world/seized-russian-artworks-should-be-returned-museums-finnish-foreign-minister-2022-04-07/).
Bank of Spain Says Banks Are Worried About Russia Sanction “Puzzle”: The Bank of Spain Director General indicated that banks and supervisors are concerned about implementing sanctions against Russia oligarchs as they vary in scope and in who they target across different jurisdictions, creating a puzzle of sanctions for internationally active banks, thereby emphasizing the practical difficulties in implementing sanctions. (https://www.reuters.com/business/finance/supervisors-banks-worried-about-puzzle-different-russia-sanctions-spanish-2022-04-07/).
Austria Expels Four Russian Diplomats: Following other European nations, Austria announced on Thursday that it would be expelling 4 Russian diplomats for “behavior incompatible with their diplomatic status.” (https://www.reuters.com/world/europe/austria-says-it-is-expelling-four-russian-diplomats-2022-04-07/).
EU to Extend Financial Sanctions on Russian High-Profile Executives: The EU is expected to extend the list of persons subject to asset freezes and travel bans to high-profile executives, including the chief of the e-commerce platform Ozon, the majority stakeholder in gold miner Polyrus, the chair of Sberbank, the director-general of Surgutneftegas and a top executive of Russia’s largest aluminum producer Rusal. Sanctions are also expected to target Putin’s daughters (https://www.ft.com/content/da05eabe-161a-43ee-a2a1-5e1a212583b4).
European Council President Expects Sanctions on Russian Oil and Gas in the Future: European Council President Charles Michel said he expects measures on Russian oil and gas will be needed “sooner or later.” A decision on the issue will depend heavily on Germany’s position. The German Finance Minister indicated that cutting gas was not possible at the moment and that it will be necessary to differentiate between oil, coal and gas. (https://www.politico.eu/article/eu-move-ban-russia-oil-gas/).
European Council President Details New Sanctions Against Russia: European Council President Charles Michel addressed the European Parliament. President Michel praised a proposal from several Member of Parliaments that would grant asylum for Russian soldiers who disobey Russian orders. He mentioned that the EU was toughening its sanctions and stated his intent to target any attempt to circumvent sanctions. He said the EU will stop Russian vessels from entering EU ports and impose a ban on Russian and Belarussian road transport operators. The EU will impose a full transaction ban on more banks in order to further weaken Russia’s financial system, and will coordinate efforts with the G7. (https://www.consilium.europa.eu/en/press/press-releases/2022/04/06/report-by-president-charles-michel-to-the-european-parliament-plenary-session/).
Russia Still Has Friends in Italy: The no-show of certain politicians during Ukrainian President Volodymyr Zelenskyy’s address to the Italian Parliament in March underlines the close link between certain Italian politicians and Russia. Certain political figures voted against sending arms to Ukraine. Around 12 percent of Italians think the Russian invasion is justified, according to a recent poll. (https://www.politico.eu/article/italy-russia-love-affair-no-end/).
New French Sanctions Guidance: The EU Treasury published new guidance in the form of Q&As and a presentation. The Guidance is intended to help professionals detail the scope of EU sanctions and their obligations. (https://www.tresor.economie.gouv.fr/Institutionnel/Niveau3/Pages/ddf1c77a-ba70-4001-b0bb-ba9d8d5c0604/files/6b473d32-e982-4543-adc9-a3cd1c609f71; https://www.tresor.economie.gouv.fr/Institutionnel/Niveau3/Pages/ddf1c77a-ba70-4001-b0bb-ba9d8d5c0604/files/b131a971-0850-4214-8be8-7e837d70a372).
European Commission President Calls for Sanctions on Russian Oil: In an address to the European Parliament, Commission President Ursula von der Leyen called for sanctions on Russian oil and Russian oil revenues. President von der Leyen mentioned the possibility to diverting a share of oil revenues to an escrow account to limit the revenue Russia can make from fossil fuel sales. (https://ec.europa.eu/commission/presscorner/detail/en/speech_22_2321).
Commission to Start Infringement Procedures Against Malta on Golden Passports: On Wednesday, the European Commission sent a reasoned opinion to Malta regarding its investor citizenship scheme. The Commission found that the granting of EU citizenship in return for pre-determined payments or investments, without any genuine link to the Member State concerned, is in breach of EU law. A similar procedure is being conducted against Cyprus and one may be triggered against Bulgaria. Malta now has to reply to the Commission, and if its answer is not satisfactory, the Commission may bring the case before the Court of Justice of the EU (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2068).
Russian Coal Import Ban Still Under Discussion: While the Fifth Sanctions Package got broad approval among EU members, the ban on Russian coals imports appears to be one of the items still under discussion. The Fifth Sanction Package is expected to be adopted tomorrow. (https://twitter.com/laurnorman/status/1511682938982866955; https://twitter.com/RikardJozwiak/status/1511665752339800068).
Greece, Norway Expel Russian Diplomats:Following other European countries, Greece and Norway announced on Wednesday that they would be expelling Russian diplomats from their countries. Greece announced it was expelling 12 people and Norway announced it was expelling 3 people. (https://www.aljazeera.com/news/2022/4/6/greece-norway-order-expulsion-of-russian-diplomats).
Dutch Authorities Freeze 516 Million Euros in Assets: On Wednesday, Dutch Foreign Minister Wopke Hoekstra announced that the country had frozen 516 million euros in assets as a result of new sanctions on Russia. Officials in the Netherlands seized 14 Russian yachts and 12 superyachts currently under construction in Dutch shipyards. The Foreign Minister stated that no Russian-owned superyachts are currently anchored in the Netherlands. (https://www.forbes.com/sites/siladityaray/2022/04/06/dutch-government-seizes-14-russian-owned-yachts/?sh=2fc77f5071e3).
European Commission Announces Fifth Sanctions Package: In a press statement, the European Commission President announced that a new sanctions package had been submitted to the Member States, providing for (i) an import ban on Russian coal, (ii) a full transaction ban on 4 Russian banks, including VTB Bank, (iii) a ban on access to EU ports for Russian(-operated) vessels and a ban on Russian and Belarusian road transport operators, (iv) extended export control prohibitions targeting Russia, including on quantum computers, advanced semiconductors, sensitive machinery and transportation equipment, (v) new import bans on Russian wood, cement, seafood and liquor, (vi) a ban on participation of Russian companies in public procurement and exclusion of all financial support to Russian public bodies and (vii) new asset freeze measures (likely targeting oligarchs and their family members).
This package is expected to be discussed by Member States on Wednesday and adopted either on Wednesday on Thursday.
The European Commission President also stated that the EU continues to consider additional sanctions, including on oil imports and other measures such as taxes or specific payment channels such as an escrow account. (https://ec.europa.eu/commission/presscorner/detail/en/statement_22_2281).
French Minister Predicts EU Will Hit Russian Oil and Coal Within Days: While the European Commission has not announced yet a ban on oil imports, which represent the largest value of EU’s mineral fuels imports from Russia (https://www.politico.eu/article/eu-sanction-russia-oil-war-crime-ukraine/), French EU Minister Clément Beaune appeared confident that the EU will also target oil imports at some point. (https://www.politico.eu/article/france-predicts-eu-move-on-oil-ahead-of-gas-in-next-sanction-package/).
Council of the EU Adopts Conclusions on Strategic Autonomy of the European Economic and Financial Sector: The conclusions notably highlight the importance of maintaining a well-functioning own EU sanctions regime, stressing “the importance of coordination between Member States regarding the implementation of sanctions, to ensure their effectiveness and maximize their impact,” commending the actions already taken to ensure uniform implementation and enforcement of EU sanctions, as well as support on-going actions to combat circumvention (including through crypto-assets) and emphasizing the importance of continued efforts to enforce strictly and uniformly all sanctions adopted. The conclusions also reiterate the EU’s opposition to extra-territorial sanctions and the importance of protecting EU operators from the effects thereof. (https://www.consilium.europa.eu/en/press/press-releases/2022/04/05/council-adopts-conclusions-on-strategic-autonomy-of-the-european-economic-and-financial-sector/).
Ukraine Calls on EU to Centralize Gas Purchases to Push Down Prices: Officials from Ukraine have called on the European Commission to nominate one authority to negotiate gas purchases at the EU level, in an effort to push down prices below current spot rates. The idea is to reduce profits for Gazprom, while allowing Ukraine to keep on earning transit fees (https://www.politico.eu/article/ukraine-eu-play-rough-russia-gas-prices/).
EU Excludes 19 Members of the Permanent Mission of the Russian Federation to the EU: the EEAS has announced that based on a decision by HR Borrell, 19 members of the Permanent Mission of the Russian Federation to the EU have been declared personae non-gratae for engaging in activities contrary to their diplomatic status (https://www.eeas.europa.eu/eeas/russia-european-union-declared-19-diplomats-personae-non-gratae_en).
More EU Countries Expel Russian Diplomats: Citing national security concerns, officials in Sweden, Spain, Denmark, Portugal and Italy all announced that they were expelling Russian diplomats on Thursday. Italy announced it was expelling 30 diplomats, Spain announced it was expelling 25, Denmark announced 15, Portugal announced 10, and Sweden announced 3. (https://www.washingtonpost.com/world/2022/04/05/russian-diplomats-expulsions-france-war-crimes-probes/, https://financialpost.com/pmn/business-pmn/portugal-to-expel-10-russian-embassy-staff).
Belgium Freezes 2.7 Billion Euros in Assets: In a Tuesday statement, the Belgian Ministry of Finance announced that, since the imposition of sanctions on Russia, the country had blocked financial transactions amounting to 196.4 billion euros, and is withholding assets worth 2.7 billion euros. (https://www.thebulletin.be/belgium-blocks-russian-assets-worth-almost-eu200-billion).
European Commission Issues Notice to Economic Operators, Importers & Exporters on Circumvention: In a notice, the European Commission invited EU economic operators to exercise caution vis-à-vis sanctions in light of risks of circumvention through exports to third countries and imports from third-countries. Economic operators are invited to implement due diligence measures and informed that customs authorities may carry out more strict controls to ensure sanctions are complied with. (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.CI.2022.145.01.0001.01.ENG&toc=OJ%3AC%3A2022%3A145I%3ATOC)
EU Readies More Sanctions: EU ambassadors are expected to meet on Wednesday to discuss new sanctions in light of the massacre of civilian populations in Russia-held towns in Ukraine. Measures to be discussed include additional asset freeze measures, increased export restrictions, a ban on Russian ships using EU ports and a potential ban on Russian energy imports (https://www.ft.com/content/84b82726-d4d0-446c-a409-f61037686315). In a press statement in the early hours of April 4, High Representative Borrell also confirmed that the EU was working on further sanctions against Russia. (https://www.consilium.europa.eu/en/press/press-releases/2022/04/04/ukraine-declaration-by-the-high-representative-on-behalf-of-the-eu-on-russian-atrocities-committed-in-bucha-and-other-ukrainian-towns/).
Ban on Russian Oil Possible, but Not Guaranteed: As part of a progressive approach, EU Member States may agree first to ban imports of Russian oil, although there is no guarantee that a consensus between the different Member States can be reached by Wednesday. (https://www.politico.eu/article/pressure-mounts-on-berlin-to-block-russian-oil/).
Polish PM says Germany is the Main Roadblock to Tougher Russian Sanctions: During a news conference, the Polish PM stressed that Germany, rather than Hungary, was the Member State opposing new sanctions on energy the most. (https://www.reuters.com/world/europe/germany-is-main-roadblock-tougher-russian-sanctions-polands-pm-says-2022-04-04/).
Vienna Rejects Sanctions on Oil & Gas: On Monday, Austria’s finance minister ruled out any EU sanctions that target oil and gas coming from Russia, emphasizing the country’s dependence and the need to ensure that sanctions should not hit the EU more than Russia. (https://www.politico.eu/article/austria-rejects-sanctions-against-russian-oil-gas/).
France Calls for More Energy Sanctions: French President Emmanuel Macron said he was in favor of banning imports of Russian oil and coal, while refraining from calling for a ban on imports of gas. (https://www.politico.eu/article/emmanuel-macron-call-more-energy-sanction-ukraine-russia-war-crime/).
European Commission Updates Guidance: On April 4, the European Commission updated its Russia sanctions guidance regarding circumvention, crypto assets, deposits and Euro-denominated banknotes. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
France to Expel “Many” Russian Diplomatic Personnel: On Monday, the French Foreign Ministry announced that it would expel “many” Russian diplomatic personnel “whose activities are counter to our security interests.” The Ministry did not specify how many diplomats would be expelled under this action. (https://www.diplomatie.gouv.fr/en/country-files/russia/news/article/russia-statement-by-the-ministry-for-europe-and-foreign-affairs-spokesperson-04).
German Finance Minister Balks at Blanket Energy Ban: Speaking to the press before meetings in Brussels, German Finance Minister Christian Lindner stated, “It is clear we must end as quickly as possible all economic ties to Russia. Gas cannot be substituted in the short term.” He added that a blanket ban on Russian energy imports would hurt EU member states more than it hurts Russia, and urged colleagues to consider bans on oil, coal, or gas, which could be replaced at varying speeds. (https://www.reuters.com/world/europe/eu-must-end-all-economic-ties-russia-fast-possible-lindner-2022-04-04/).
Poland Considering Sanctions on United Russia Party Members: Polish Prime Minister Mateusz Morawiecki announced on Monday that he was asking the EU to consider sanctions against all members of the United Russia political party. United Russia is the largest political party in Russia and counts over 2 million people as members. (https://tass.com/world/1431925).
EBRD Excludes Russia and Belarus from Funding: After suspending operations in both countries, the European Bank for Reconstruction and Development (“EBRD”) announced Monday that its board had voted to exclude Russia and Belarus from receiving funding for projects. The measure would also prevent both countries from receiving technical assistance from the EBRD. (https://www.ebrd.com/news/2022/board-of-governors-vote-for-firm-action-against-russia-and-belarus.html).
Deutsche Bank CEO Predicts Recession if Germany Imposes Ban on Russian Gas:Deutsche Bank CEO Christian Sewing stated that the German economy is already expected to slow by 2% due to the war in Ukraine, and added, “The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable.” (https://www.reuters.com/business/energy/germany-faces-steep-recession-if-russian-oil-gas-halted-banks-2022-04-04/).
EU Announces New Sanctions in Response to Bucha: In Sunday tweets, European Commissioner Ursula Von Der Leyen and European Council President Charles Michel both stated that new EU restrictions would be coming as a result of accounts of Russian soldiers committing atrocities against civilians in Bucha, Ukraine. Commissioner Von Der Leyen said, “Perpetrators of war crimes will be held accountable,” and President Michel said, “Further EU sanctions & support are on their way.” Politico confirmed that EU ministers have agreed to “speed through and tighten” further Russian sanctions. (https://www.politico.eu/article/ukraine-russia-civilian-executions-war-massacre/).
Germany Supports Further Sanctions: In Sunday press events, German Chancellor Olaf Scholz stated “We will decide on further [sanctions] … in coming days. President Putin and his supporters will feel the consequences.” He was responding to new news reports of atrocities against civilians in Bucha, Ukraine. (https://twitter.com/vonderburchard/status/1510660305453518850?s=20&t=3tcYDhcpO0q9uF6CpVKzFw).
Latvia Says Baltic States Are No Longer Importing Russian Gas: In a Sunday Radio interview, Uldis Bariss, CEO of Conexus Baltic Grid, Latvia’s natural gas storage operator, stated that the Baltic states Estonia, Latvia, and Lithuania had all stopped importing Russian natural gas, beginning on April 1. The statement expands on Lithuania’s announcement yesterday, where Lithuanian President Gitanas Nauseda called on the rest of Europe to join Lithuania in the effort. (https://www.aljazeera.com/amp/news/2022/4/3/baltic-states-stop-russian-gas-imports-over-ukraine-invasion).
Lithuania Suspends Purchases of Russian Gas: In a Saturday statement, Lithuanian President Gitanas Nauseda announced that Lithuania would no longer accept Russian gas, saying that all natural gas coming into the country will enter through the Klaipeda port. He added, “If we can do it, the rest of Europe can do it too.” Lithuania has not suspended transit of Russian natural gas to the Kaliningrad exclave, despite the day’s announcement. (https://www.reuters.com/business/energy/lithuania-ceasing-all-russian-gas-imports-domestic-needs-2022-04-02/).
Eastern Europeans Push for More Punitive EU Sanctions Measures: Poland and the Baltic countries are proposing new punitive measures against the Russian economy, arguing that initial rounds of EU sanctions need to be stronger to achieve their stated goal of ending President Vladimir Putin’s ability to wage war (https://www.politico.eu/article/eastern-europeans-conjure-up-plans-to-raise-new-penalties-pressure-on-vladimir-putin-russia/).
Polish Prime Minister Calls for More Robust Sanctions: Polish Prime Minister Mateusz Morawiecki tweeted on Friday that “the sanctions are supposed to stop Putin. If they haven’t it means they are not robust enough!” (https://twitter.com/MorawieckiM/status/1509827033316179992).
Commission Provides Interpretation of “Financial Assistance for Trade”: In a reply to FAQs, the European Commission provides further guidance on the interpretation of the definition of “financial assistance for trade.” The Council of the European Union had already provided its interpretation of “financial assistance for trade” in its own guidelines. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-financial-assistance_en.pdf).
Commission Provides Further Reply to FAQs on Deposits: The European Commission provided further interpretation regarding restrictions on deposits in the EU for Russian nationals. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-deposits_en.pdf)
EU Warns China Not to Help Putin Bust Sanctions: During Friday’s EU-China summit, EU leaders stated that they expect China not to interfere in foreign sanctions programs imposed on Russia, even if it does not impose sanctions on Russia itself. EU representatives warned China of the reputational and commercial consequences that China’s involvement in the war in Ukraine could bring. (https://www.politico.eu/article/eu-china-xi-jinping-russia-president-vladimir-putin-sanctions-ukraine-war/).
EU Parliament President Visits Ukraine: Roberta Metsola is the first president of an EU Institution to visit Ukraine since the beginning of the war. President Matsola tweeted on Friday, “I’m in Kyiv to give a message of hope.” (https://www.dw.com/en/ukraine-eu-parliament-president-visits-kyiv/a-61325745).
EU Calls on China to Support Efforts to Stop War in China: The European External Action Service issued a press release on Friday on the EU-China summit. In the statement, the EU underlined the shared responsibility of EU and China as global actors to work for peace and stability. It called on China to support efforts to bring about an immediate end to the war in Ukraine, consistent with China’s role in the world as a permanent member of the UN Security Council, and noted the country’s uniquely close relations with Russia. The statement also mentions that any attempts to circumvent sanctions or to aid Russia by other means must be stopped. (https://www.consilium.europa.eu/en/press/press-releases/2022/04/01/eu-china-summit-restoring-peace-and-stability-in-ukraine-is-a-shared-responsibility/).
Gazprom Quits Business in Germany: On Friday, Russian gas company Gazprom announced that it was terminating its participation in Gazprom Germania GMBH, which includes subsidiaries in the Czech Republic, UK, and Switzerland. The company provided limited detail in its announcement of the shutdown, but analysts suggest that the closure is due to intense regulatory scrutiny in Europe. (https://www.reuters.com/business/energy/russias-gazprom-exits-german-business-amid-row-over-pricing-2022-04-01/).
EU Prepares New Sanctions Against Russia: The EU is reportedly preparing new sanctions package against Russia over Russia’s invasion of Ukraine that could be available as soon as next week. The magnitude of these new measures will depend on Moscow’s stance regarding gas payments in rubles. The Commission is also consulting with EU governments to make sure existing sanctions are not bypassed.(https://www.eureporter.co/general/2022/03/31/eu-readying-new-russia-sanctions-may-retaliate-over-rouble-payments-for-gas/).
EU Official Clarifies EU’s Red Lines Towards China: Ahead of the EU-China summit, EU officials are looking for reassurances that China has no intention to provide an economic lifeline to Russia. (https://twitter.com/laurnorman/status/1509549148999196672).
Estonian Prime Minister Calls on EU to Capture Part of the Energy Payments to Russia: Reiterating calls from earlier in the week, Estonian Prime Minister Kaja Kallas called on the EU to set up an escrow account to capture part of the payments for Moscow’s oil and gas and use it to rebuild Ukraine. The Prime Minister said the idea would be discussed among EU leaders on Thursday evening, although several member states were still assessing how this could be implemented. (https://euobserver.com/world/154587).
German Economy Minister Discusses Sanctions Impact: In a Thursday interview with public broadcaster ZDF, German Economy Minister Robert Habeck stated that Germany “will be poorer” due to Russia’s invasion of Ukraine and the accompanying sanctions programs. However, he said “I believe that we are ready to pay this price which is small enough compared to the sufferings in Ukraine.” (https://www.cnn.com/2022/03/31/business/germany-economy-war/index.html).
First EU/US High-Level Dialogue on Russia: The meeting between representatives from the Department of State and the European External Action Service on Wednesday is intended to coordinate EU and US policies and actions related to Russia. This inaugural session focused on EU and US strategic objectives and policy coordination aimed at ending Russia’s war of aggression against Ukraine. The next high-level meeting is set to take place in late 2022. (https://www.eeas.europa.eu/eeas/euus-joint-press-release-eeas-and-us-department-state-first-high-level-dialogue-russia_en).
EU and US Oppose Linking Ukraine Peace Talks to Sanctions Relief for Russia: US and EU officials underlined that only a full ceasefire, troop withdrawal and return of captured territory to Ukraine would be enough to trigger discussions over lifting sanctions on Russia’s economy.(https://www.ft.com/content/a3c13f6d-3924-4abd-aa00-b29f1d65e0cf).
Slovakia Reduces Staff at the Russian Embassy: Claiming that their activities were not in line with the Vienna convention on diplomatic relations, the Foreign Affairs Ministry of Slovakia decided to reduce the staff of the Russian Embassy in Bratislava by 35 people on Thursday. (https://spectator.sme.sk/c/22873806/slovakia-will-reduce-staff-at-the-russian-embassy.html?utm_source=POLITICO.EU&utm_campaign=20f7761969-EMAIL_CAMPAIGN_2022_03_31_05_10&utm_medium=email&utm_term=0_10959edeb5-20f7761969-190616844).
Commissioner McGuiness’ Statement on EU-US Dialogue on Sanctions: EU Commissioner for Financial Stability, Financial Services, and the Capital Markets Union Mairead McGuinness, who is responsible for sanctions, released a statement on the EU-US sanctions dialogue on Wednesday. In the announcement, she stressed the need to ensure “effective and full implementation of sanctions across jurisdictions” as a priority and the importance of cooperation with the US and other partners (https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_22_2166).
Ukraine Minister of Foreign Affairs Discussed 5th Sanctions Package With HR Borrell: Dmytro Kuleba, Ukraine’s Minister of Foreign Affairs, discussed with High Representative Josep Borrell the “need to elevate sanctions pressure” through a 5th package of sanctions that should come as soon as possible and be as tough as possible.” (https://twitter.com/DmytroKuleba/status/1509144517663936519).
EU First-Tier Court Rejects RT France’s Request for Interim Measures to Suspend Sanctions:The President of the EU General Court rejected France’s request for interim measures to suspend sanctions against Russia, as urgency had not been established. However, the procedure on merits of the claim will be an accelerated one. (https://curia.europa.eu/jcms/upload/docs/application/pdf/2022-03/cp220054fr.pdf).
Poland to Scrap Russian Energy and Calls on the EU to Follow Suit: After proposing a unilateral ban on coal imports yesterday, Poland has announced it would end all imports of Russian energy by the end of 2022 today. The country called on other Member States to follow their lead, and urged the European Commission to introduce a new tax on Russian fossil fuels. (https://www.politico.eu/article/follow-my-lead-on-scrapping-russian-energy-poland-tells-the-eu/).
Germany Activates Gas Conservation Strategy:On Wednesday, German Economy Minister Robert Habeck activated the “early warning phase” of Germany’s gas emergency plan. The move establishes a crisis team with representatives from the Economics Ministry, gas regulators, and the private sector. During a news conference announcing the plan, Minister Habeck urged Germans to reduce natural gas consumption, saying “every kilowatt hour counts.” (https://www.reuters.com/business/energy/germany-declares-early-warning-potential-gas-supply-disruptions-2022-03-30/).
Ukraine Pushes for Import Ban on Russian Diamonds: Ukrainian President Volodymyr Zelenskyy is scheduled to speak to the Belgian parliament tomorrow; he is expected to push Belgium to ban imports of Russian rough diamonds, like the US has already done. Belgium and other key players in the diamonds sector are instead advocating for a multilateral ban before the EU takes any action on the issue in order to avoid diversion of Russian diamonds to other centers in India and the UAE. (https://www.politico.eu/article/diamond-trade-puts-belgium-in-antwerp-tough-spot-in-front-of-ukraine-zelenskyy/).
European Commission Publishes FAQ on Donetsk-Luhansk restrictions: The guidance is limited to the question of how operators can assess which areas in the Donetsk and Luhansk oblasts are considered as not under the control of the authorities of Ukraine and therefore subject to restrictions. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-oblasts_en.pdf)
EU Jet Lessors Struggle to Get their Planes Back After Contracts Cancelled Due to EU Sanctions: While EU jet lessors have been forced to cancel contracts with Russian airlines as a result of EU sanctions, they are now unable to repossess the planes that have been stranded in Russia. (https://finance.yahoo.com/news/eu-sanctions-forced-jet-lessors-070552949.html).
Italy Seizes Assets of Alisher Usmanov: Italy has been reported to have seized a €600,000 bulletproof car, a property complex worth €17 million and six corporate cars belonging to Alisher Usmanov, in application of asset freeze measures. (https://www.theguardian.com/business/2022/mar/29/usmanov-car-seized-sardinia-eu-sanctions-putin).
Germany Reaches Deal to Pay for Russian Gas in Euros: On Wednesday, the German government announced that it had received assurances from Russian President Vladimir Putin that Germany would be allowed to pay for gas in euros. The transaction will be routed through Gazprombank and transferred into rubles in Russia. (https://www.dw.com/en/germany-says-putin-agreed-to-keep-payments-for-gas-in-euros/a-61310461).
EU to Press China on Sanctions Circumvention: Ahead of Friday’s EU-China summit, Bloomberg is reporting that EU representatives will press Beijing to not sell arms to Russia or circumvent sanctions imposed on Russia. China rejected speculation that it was assisting Russia, adding that continued pressure may damage diplomatic relations with a key trading partner. (https://www.bloomberg.com/news/newsletters/2022-03-29/eu-to-press-china-on-russia-sanctions).
Poland to Ban Russian Coal Imports: On Tuesday, Polish government spokesman Piotr Mueller announced that the country was banning the import of Russian coal for national security reasons. Poland imports one fifth of its coal from Russia. The country has urged the EU to ban the import of oil and gas from Russia. (https://www.politico.eu/article/poland-to-ban-russian-coal-imports/).
EU Countries Expel Russian Diplomats: Several EU countries, including Belgium, the Netherlands, the Czech Republic, and Ireland announced on Tuesday that they were expelling Russian diplomats from their posts. Belgium cited national security as the reason for the expulsion, and Dutch authorities stated that the diplomats they expelled were Russian intelligence agents. (https://www.reuters.com/world/europe/belgium-expels-21-russian-diplomats-foreign-ministry-2022-03-29/).
European Commission Publishes Revised List of National Competent Authorities for Sanctions (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/national-competent-authorities-sanctions-implementation_en.pdf).
European Commission Updates Russia Sanctions Guidance: The European Commission has today updated and/or published guidance on asset freeze measures (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#assets), trading (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-trading_en.pdf) and exports of euro-denominated banknotes (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-euro-banknotes_en.pdf).
EBRD to Close Offices in Moscow, Minsk: On Monday, the European Bank for Reconstruction and Development (“EBRD”) announced that it is in the process of closing its Resident Offices in Moscow, Russia and Minsk, Belarus. Its statement on the matter said that the closure “is the inevitable outcome of the actions taken by the Russian Federation with the help of Belarus.” (https://www.ebrd.com/news/2022/ebrd-to-close-its-offices-in-moscow-and-minsk-.html).
European Council Issues Conclusions on Russian Military Aggression Against Ukraine Following Two-Day Meeting: Following itsmeeting of 24-25 March 2022, the European Council issued a statement reiterating inter aliathat the EU “remains ready to close loopholes and target actual and possible circumvention as well as to move quickly with further coordinated robust sanctions on Russia and Belarus to effectively thwart Russian abilities to continue the aggression”. The European Council also calls on all countries to align with those sanctions and warns that “[a]ny y attempts to circumvent sanctions or to aid Russia by other means must be stopped” (https://www.consilium.europa.eu/media/55082/2022-03-2425-euco-conclusions-en.pdf).
European Commission President Von Der Leyen Reiterates Commitment to Sanctions Enforcement and Circumvention Prevention: Speaking at a joint press conference following the meeting of the European Council of 24-25 March 2022, President Von Der Leyen stated that the EU will “sharpen” its sanctions and put efforts on enforcing these sanctions, and on preventing circumvention and evasion, but did not reference any new sanctions. (https://ec.europa.eu/commission/presscorner/detail/en/statement_22_2020). Similar statements were made by EC President Charles Michel. (https://www.consilium.europa.eu/en/press/press-releases/2022/03/25/remarks-by-president-charles-michel-upon-his-arrival-for-the-second-day-of-the-european-council/).
European Commission Publishes Guidance on Luxury Goods Export Ban: The European Commission has updated its Russian sanctions FAQ webpage to provide guidance on the scope of the luxury goods export ban, including the determination of the EUR 300 value threshold and what is to be understood by an “item.” (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#luxury). The FAQ on customs related questions has been updated accordingly. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-customs_en.pdf).
German Guidance Not Fully Consistent with European Commission Guidance: German authorities have published their own FAQs on Russia sanctions. In some cases, responses provided are in opposition with those provided by the European Commission. For instance, Germany considers there is no need to aggregated ownership of sanctioned parties, unless there are concrete indications that several EU-listed companies are acting together in exercising the shareholder rights. (https://www.bmwi.de/Redaktion/DE/FAQ/Sanktionen-Russland/faq-russland-sanktionen.html).
French Authorities Willing to Provide Guidance on Ownership or Control of Non-Listed Parties: The French authorities have made available a form for requests for opinion regarding the ownership or control of a non-listed party by a sanctioned individual or entity. The form requires a detailed analysis of the applicant’s assessment as to the existence of ownership or control. (https://www.tresor.economie.gouv.fr/Institutionnel/Niveau3/Pages/ddf1c77a-ba70-4001-b0bb-ba9d8d5c0604/files/bc73a324-ea0a-46b8-929f-5613e18d46ff)
Poland, Slovenia and the Czech Republic Issue 10-Point Plan to Support Ukraine: The three countries are advocating inter alia for cutting off all Russian banks from SWIFT, blocking Russian ships from EU ports, blocking road transport in and out of Russia, imposing sanctions not only on oligarchs but on the entire business environment, suspending visas for Russian citizens, imposing sanctions on all members of Putin’s party, placing a total ban on export to Russia of technologies that can be used for war and excluding Russia from all international organizations. (https://www.politico.eu/article/poland-10-point-plan-save-ukraine/).
EU Member States Reported to Struggle With the Freezing and Seizing of Assets of Sanctioned Parties: Member States are reported to face challenges, which differ from one Member State to another, with only a small fraction of funds of sanctioned parties being actually frozen. Inconsistencies in enforcement of EU sanctions between the different Member States is also noted. The difference between freezing and seizing assets is also highlighted as a key issue, since seizures generally require specific and separate legal proceedings under the laws of each Member States (https://www.reuters.com/world/europe/freeze-seize-eu-struggles-target-oligarchs-assets-2022-03-24/).
European Commission and US Issue Joint Statement on European Energy Security: In a joint statement, the European Commission and the United States committed to reducing Europe’s dependency on Russian energy, by setting up a task force on energy security with the aim of reinforcing US-EU cooperation, including through – amongst other actions – the US striving to ensure additional LNG volumes for the EU market of at least 15 bcm in 2022 with expected increases going forward. (https://ec.europa.eu/commission/presscorner/detail/en/statement_22_2041).
Politico Publishes Matrix on Ukraine’s Allies: The matrix notably highlights the position of the different EU Member States regarding a potential ban on Russian energy. (https://www.politico.com/interactives/2022/ukraine-european-allies-matrix/).
HR Borrell Confirms European Council Summit Will Discuss Sanctions: In press remarks before the summit of the EU heads of state, High Representative Borrell confirmed that leaders were expected to discuss additional sanctions against Russia, although cautioning that “the Summit does not take concrete decisions and only provides political guidance for the technical bodies, and for the Foreign Affairs Ministers to decide in concrete terms.” He nonetheless expects the European Union Council to provide guidance on how to continue increasing the sanctions – personal sanctions and sectoral sanctions. (https://eeas.europa.eu/headquarters/headquarters-homepage/113429/european-council-remarks-high-representative-josep-borrell-upon-arrival_en).
European Council Open to More Sanctions: After a European Council meeting on Thursday evening, the Council issued a press release on the situation in Ukraine. On sanctions, the Council said it was “ready to close loopholes and target actual and possible circumvention as well as to move quickly with further coordinated robust sanctions on Russia and Belarus to effectively thwart Russian abilities to continue the aggression.” It added that it will align sanctions with other countries’ sanctions programs, and work to cut off sanctions evasion. (https://www.consilium.europa.eu/en/press/press-releases/2022/03/26/european-council-conclusions-on-the-russian-military-aggression-against-ukraine-24-march-2022/).
Baltic States and Poland Call Put Pressure for Additional Sanctions: In a joint letter to the leader of the European Union sent on March 24, the Prime Ministers of the Baltic States and Poland called for the EU to Ban Russian and Belarusian Road Freight Transport and to Block Ships from Entering EU Ports. (https://lrv.lt/en/news/prime-ministers-of-baltic-states-and-poland-call-on-the-eu-to-ban-russian-and-belarusian-road-freight-transport-and-to-block-ships-from-entering-eu-ports).
While Other Member States Continue To Oppose Russian Energy Import Ban: Belgian PM Alexander de Croo was quoted saying that a full embargo on Russian energy would have a “devastating impact” on the European economy and that the EU was “not going to impose sanctions that weaken [it] unnecessarily.” (https://twitter.com/RosieBirchard/status/1507014863150727172).
Trade Commissioner States that the EU Assesses Scenarios Involving Full Halt to Russian Gas Supplies: Commissioner Dombrovskis reported that the European Commission was assessing scenarios involving partial or full disruption of gas deliveries from Russia next winter so as to assist Member States in preparing their gas supply contingency plans. (https://www.reuters.com/business/energy/eu-says-assessing-scenarios-potential-russian-gas-halt-next-winter-2022-03-24/?rpc=401&).
German Chancellor Rejects Putin’s Rubles-for-Gas Demand: Speaking at a press conference following the G7 summit of March 24, German Chancellor Olaf Scholz discarded Putin’s proposal, referring to existing contractual clauses that require payments to be made in Euro or Dollars. (https://www.politico.eu/article/germanys-scholz-rejects-putins-rubles-for-gas-demand/).
The new clarifications notably confirm that ownership or control by sanctioned parties have to be aggregated for the purposes of determining whether a non-designated entity is “owned” or “controlled” by a sanctioned party and therefore presumed to be subject to asset freeze measures.
President Charles Michel had expressed a similar position earlier today in its report to the European Parliament plenary session: “[w]e are implementing these sanctions and working to close the loopholes that provide an escape for Russia, and we are prepared to do more, to starve Putin’s war machine”.
European Commission Compiles Guidance Documents and FAQs on Russia Sanctions: The European Commission set up a webpage where guidance documents and FAQs on Russia sanctions are compiled.
This includes new FAQs on assets freeze, circumvention and due diligence, crypto assets, Euro-denominated banknotes, refinancing restrictions, Euro-denominated securities and intellectual property rights, as well as the aviation sector.
This webpage is expected to be updated “soon” to cover more topics.
New EU Sanctions Still Considered But Unity Lacks: While new sanctions targeting additional Russian banks, cutting access to SWIFT to more financial institutions, restricting access of Russian ships to EU ports and possibly energy (mainly oil) import ban continue to be on the table, some Member States are reported to be wary of “sanctions fatigue”, the need to ensure that sanctions are legally watertight and the potential long-term economic implications of harsher sanctions. As reported yesterday, despite Member States meeting again as from Thursday, High Representative Borrell stated that he does not expect new sanctions to be adopted this week.
European Central Bank Chief Warns of Cryptocurrency as Sanctions Evasion Tool: In remarks before an online banking forum, European Central Bank head Christine Lagarde stated that she was “most concerned” about the use of crypto assets as a tool to avoid sanctions on Russia. She noted the “high volume” of rubles being converted to digital assets after many countries imposed economic sanctions on Russia for its invasion of Ukraine. (https://www.barrons.com/news/ecb-s-lagarde-concerned-about-crypto-use-to-dodge-russia-sanctions-01647967508?refsec=afp-news).
Renault Resumes Moscow Operations: French automaker Renault has resumed operations in Russia. Operations were suspended in February as a result of uncertain supply chain issues; the current resumption of operations is expected to last for 3 days. Renault holds a controlling stake in Avtovaz, which makes Russian Lada vehicles. (https://www.dw.com/en/renault-resumes-car-production-in-russia-as-rivals-withdraw/a-61211840).
TotalEnergies To Cut Sourcing from and Investments in Russia: In a public press release, TotalEnergies committed to stop purchasing Russian oil and gasoil by end of 2022. TotalEnergies also decided to no longer record proved reserves for Arctic LNG 2 in its accounts or to provide any more capital for this projects.
EU Member States Continue Discussions Over New Sanctions But Remain Divided: EU foreign ministers met again on March 21, 2022 to discuss further sanctions against Russia, but divides remain between the Baltic States and Poland, advocating for more sanctions, including an oil embargo, while Germany fears the economic consequences of any type of energy ban. Hungary also declared that sanctioning energy was a red line for them. While EU sanctions on energy are not ruled out, Member States are reported to consider first cutting oil imports, which is more easily replaceable, before considering any wider ban that would also target gas imports.
High Representative Borrell confirmed that foreign ministers “will continue talking about what kind of sanctions we can think of again, more – especially related with energy,” but declined to comment on the precise scope of the discussions.
A meeting between EU leaders and US president Joe Biden, scheduled for Thursday, is expected to focus on potential new sanctions, together with means to avoid Russia circumventing sanctions.
No Formal Adoption of New Sanctions Expected This Week: While EU foreign affairs ministers met today, and as EU leaders are expected to meet this week to discuss potential new sanctions, High Representative Borrell has been quoted as saying that “formal adoption of sanctions require procedure and I don’t think during this week it will be formal adoption of sanctions, according with our procedures.”
EU is Wary of Potential Challenges Against Sanctions and Weak Enforcement: While EU officials consider that new sanctions are more robust against potential Court challenges, one of the main concern remains the risk of weak enforcement by Member States.
European Commission Publishes Guidance on Customs Related Questions on Russia Sanctions:The document, which compiles all sanctions against Russia and provides clarity on certain points, is available below:
Council Formally Approves the Strategic Compass: on March 21, the Council of the European Union formally approved the Strategic Compass, which provides for an ambitious plan of action for strengthening the EU’s security and defense policy by 2030.
France Seizes Russian Assets: In a Sunday interview, French Minister of the Economy and Finance Bruno Le Maire announced that the country had frozen 22 billion Euros of Russian Central Bank assets held in Russia, along with 150 million Euros in funds held by Russian individuals in French enterprises. The Minister also announced that the country had seized property worth “half a billion Euro” owned by around 30 Russians, including two yachts. (https://tass.com/economy/1424731).
EU Threatens Trade Measures Against China In Case Of Weapons’ Deliveries To Russia: The EU echoed US statements by warning China that providing military equipment or support to Russia would result in the imposition of trade barriers against China. (https://www.politico.eu/article/eu-has-very-reliable-evidence-china-is-considering-military-aid-for-russia/)
EC Stresses Importance of Enforcing Sanctions Against Russian and Belarussian Sanctioned Parties:Alongside the establishment of the G7’s Russian Elites, Proxies, and Oligarchs (“REPO”) Task Force, the European Commission has launched a “Freeze and Seize” Task Force, to ensure EU-level coordination to implement sanctions against listed Russian and Belarussian oligarchs. The European Commission has stressed the importance of cooperation between the two task forces to ensure the maximum efficiency of sanctions.
European Commission Issues Guidance Note on Russia Sanctions Export Controls: On March 17, the European Commission published a guidance note regarding the scope of controls under Russia sanctions applicable to dual-use items and advance technology items. The guidance note provides useful clarifications and recommendations regarding the scope and application of these controls.(https://trade.ec.europa.eu/doclib/docs/2022/march/tradoc_160079.pdf).
EU Space Agency Suspends Mission to Mars with Russia: On Thursday, the European Space Agency announced that it had suspended the ExoMars mission to Mars, which it had been organizing in coordination with Russia. The Agency cited the “present impossibility” of working with the Russian space agency Roscomos. (https://www.independent.co.uk/news/uk/exomars-esa-rosalind-franklin-russia-kazakhstan-b2038123.html).
EU Member States Do Not Rule Out 5th Sanctions Package But Focus Should Be On Closing Loopholes:While there are still divisions between Member States on whether or not additional sanctions should be imposed against Russia, including the divisive issue of an energy ban, the European Commission is reported to prepare the groundwork for a fifth sanctions package. Nevertheless, no specific “trigger” appears to have been agreed as to when and if this fifth sanctions package should be adopted. At the moment, the focus of the majority of Member States seems to concern the necessity to close loopholes to ensure the effectiveness of already adopted sanctions.
EU Re-Allocates Steel Safeguard Quotas Following Import Ban Against Russia and Belarus: On March 15, 2022, the European Commission adopted a Regulation amending the quotas available under steel safeguard measures to re-allocate, as from April 1, 2022, quotas that were previously reserved for Russian and Belarusian imports. The European Commission’s move is justified by the need to avoid a shortage in steel supply in the EU.
EU Imposes New Sanctions Against Russia: The fourth package of sanctions targeting Russia has been adopted today and consist of:
o Asset freeze measures on 15 individuals, including oligarchs and media personalities, and 9 entities in the military and defense sectors.
o Restrictions on the energy sector, defined as covering, with the exception of civil nuclear-related activities:
(i) the exploration, production, distribution within Russia or mining of crude oil, natural gas or solid fossil fuels, the refining of fuels, the liquefaction of natural gas or regasification;
(ii) the manufacture or distribution within Russia of solid fossil fuel products, refined petroleum products or gas; or
(iii) the construction of facilities or installation of equipment for, or the provision of services, equipment or technology for, activities related to power generation or electricity production.
Restrictions on the energy sector consist in:
(i) Limited grounds for authorizations for exports and services related to dual-use items and high-technology items (as listed in Annex VII of Regulation 833/2014), where intended for the energy sector;
(ii) Prohibition on investments in entities (inside or outside Russia) operating in the energy sector in Russia (including prohibitions on acquisition of participations in legal persons, on the granting of financing, on the creation of joint ventures and on the provision of related investment services).
o Prohibition on exports and services related to items suited for oil exploration / production purposes (as listed in Annex II of Regulation 833/2014, which, previously, were subject to an authorization requirement and only prohibited in relation to specific oil projects).
o Prohibition on exports of luxury goods (as listed in Annex XVIII of Regulation 833/2014), where their value exceed EUR 300 per item (except if otherwise provided in Annex XVIII).
o Prohibition on imports, purchase and transport of, as well as services related to certain iron and steel products originating in or exported from Russia (as listed in Annex XVII of Regulation 833/2014, modelled on the EU safeguard measures on iron and steel products).
o Prohibition on engaging in any transactions with entities listed in Annex XIX of Regulation 833/2014 (i.e., OPK OBORONPROM, United Aircraft Corporation, Uralvagonzavod, Rosneft, Transneft, Gazprom Neft, Almaz-Antey, Kamaz, Rostec, JSC PO Sevmash, Sovcomflot and United Shipbuilding Corporation), the entities outside the EU they own for more than 50% and any entity, inside or outside the EU, acting on their behalf or at their direction.
o Extension of the list of individuals and entities for which specific (limited) authorization requirements apply in relation to exports and services related to dual-use items and high-technology items (as listed in Annex VII of Regulation 833/2014).
o Prohibition, as of April 15, 2022, on the provision of credit rating services or access to any subscription services in relation to credit rating activities.
The legal texts are available at:
See also the European Commission’s press release and FAQ:
See also the Council’s press release:
40 WTO Members, Including All EU Member States Issue Joint Statement At the WTO: in a communication published on 15 March 2022, Albania, Australia, Canada, the EU Member States, Iceland, Japan, South Korea, Moldova, Montenegro, New Zealand, North Macedonia, Norway, the UK and the US issued a joint statement at the WTO condemning Russia’s military assault on Ukraine and emphasizing that they will take any actions considered necessary, including “actions to suspend concessions or other obligations with respect to the Russian Federation, such as the suspension of the most-favoured-nation treatment to products and services of the Russian Federation”. The WTO members also consider that Belarus’ accession process should be suspended in light of Belarus’ material support to the actions of Russia.
EU Agrees on Fourth Sanctions Package: EU member states have agreed to a fourth package of sanctions against Russia. Though text of the legislation is not yet public, it is reported to include a revocation of Russia’s most-favored-nation trading status, a ban on Russian steel and iron imports, an export ban on luxury goods to Russia, an addition of 14 oligarchs to the list of sanctioned Russian billionaires, and a suspension of Russia’s membership in multilateral banks. (https://www.reuters.com/world/europe/eu-member-states-press-ahead-with-new-package-sanctions-against-russia-2022-03-14/).
Additional Russian Oligarchs and Media Personalities To Be Subject To Asset Freeze Measures:while legal texts are not published yet, some names of asset freeze targets have been leaked, including R. Abramovich (owner of Chelsea FC); G. Khan (shareholder of Alfa Group); A. Kuzmichev (shareholder of Alfa Group); V. Rashnikov (owner of MMK); V. Rashevsky (CEO of EuroChem); A. Ryumin (head of Rosseti PJSC); S. Kerimov (owner of Nafta Moscow); A. Gasparyan, A. Sheynin and K. Ernst (media personalities); along with entities in the defense and military sectors, including Zelenodolsk Shipyard.(https://www.politico.eu/article/eu-sanctions-chelsea-owner-roman-abramovich-oligarch-russia/).
EU Ambassadors Meet to Finalize New Sanctions Package Sunday, Expected to Adopt Text Monday:On Sunday, EU ambassadors met to discuss new sanctions; text for the measure is expected to be announced on Monday. The measures are reported to include sanctions on 15 new oligarchs, including Chelsea Football Club owner Roman Abramovich; sanctions on Russian state-owned enterprises not yet listed; a rating ban on Russian banks; an import ban on Russian steel and iron products; a ban on new investment in the Russian energy sector; and an export ban on luxury goods to Russia. (https://www.ft.com/content/e4ebb442-bbe9-442d-bb29-e490c7c20ae6).
Italy Seizes World’s Largest Sailing Yacht: Shortly after the EU placed Russian billionaire Andrey Igorevich Melnichenko on its sanctions list, Italian authorities seized his Sailing Yacht A in the port of Trieste. The Italian government stated that it was the world’s largest sailing yacht. (https://www.reuters.com/world/europe/italy-seizes-russian-oligarch-melnichenkos-sailing-yacht-2022-03-12/).
Germany Aims to be Independent of Russian Oil, Coal This Year: In an interview on Saturday, German Economy and Finance Minister Robert Habeck stated Germany “will be independent of Russian coal by the autumn and nearly independent of Russian oil by the end of the year.” However, he stated that cutting off imports of Russian gas will be more difficult, since the country imports more than half of its gas from Russia. (https://www.barrons.com/amp/news/germany-aims-to-be-nearly-free-of-russia-oil-this-year-01647088507).
European Commission Announces New Sanctions Package: following the meeting of Heads of State in France over the last couple of days, the European Commission President announced that the EU would impose additional sanctions against Russia affecting trade, market access, membership in international financial institutions, crypto-assets, exports of luxury goods, the steel and energy sectors and additional oligarchs, namely:
o Denial of Most-Favored-Nation status, meaning inter alia that higher customs tariffs may be imposed on Russian imports;
o Work towards suspending Russia from multilateral financial institutions, such as the International Monetary Fund and the World Bank;
o New assets freeze measures against “more individuals and more companies”, including oligarchs, regime-affiliated elites, their families and prominent businesspeople in the steel, military, financial and investment services and media sectors, together with the establishment of a G7 task force to target Russian elites;
o Ensuring that crypto assets cannot be used to circumvent sanctions;
o Export control restrictions on luxury goods;
o Import ban on “key goods” in the iron and steel sector;
o Prohibition on new investments across Russia’s energy sector, including investments, technology transfers and financial services for energy exploration and production.
EU Heads of State Meet To Discuss the Ukraine Crisis: Heads of state are holding an informal meeting in France to discuss the EU’s reaction to the war in Ukraine. Speaking before the meeting, European Council President stated that “[t]o be very concrete, we propose to decide to phase out Russian gas”. In addition to energy dependence, other topics to be discussed include the EU’s defense capabilities, Ukraine’s relationship with the EU and the humanitarian crisis.
New EU Sanctions Against Russia Adopted: on March 9, 2022, the EU adopted additional restrictive measures against Russia, which consist of:
o Asset freeze (and travel ban) measures against 160 individuals, consisting of 14 oligarchs, prominent businesspeople and family members and 146 members of the Russian Federation Council;
o Extension of restrictions on access to capital to Russian Maritime Register of Shipping, thereby imposing prohibitions affecting transferable securities and money-market instruments issued by, as well as loans or credits granted to that entity and certain affiliates;
o Clarification that restrictions on access to capital cover “transferable securities” in the form of crypto-assets and of the “common understanding” that loans and credits can be provided by any means, including crypto assets;
o Restrictions on export (including the placing on board of Russian-flagged vessels) and services related to certain maritime navigation goods and technology, as listed in (now) Annex XVI of Regulation 833/2014;
o Additional information requirements between the Member States in relation to certain authorizations that can be granted to proceed with transactions that are otherwise controlled where necessary for maritime safety purposes;
o Clarification that the Russian National Wealth Fund should be treated as an entity acting on behalf or at the direction of the Central Bank of Russia for the purpose of the prohibition on transactions related to the management of reserves, as well as assets of, the Central Bank of Russia and entities acting on its behalf or at its direction;
o Extension of the exception on the prohibition of certain deposits by Russian individuals or entities to nationals and residents of EEA countries or Switzerland, in addition to the EU;
o Clarification of exceptions to the prohibition on public financing or financial assistance for trade with, or investment in, Russia for small and medium-size enterprises;
o Confirmation that controls on items listed in Annex VII of Regulation 833/2014 do not apply to non-controlled items containing or more controlled components, subject to rules on circumvention.
EU Sanctions Against Russia Transposed Against Belarus: on March 9, 2022, the EU also imposed additional sanctions against Belarus, which replicate existing sanctions against Russia, namely:
o Clarification that restrictions on access to capital cover “transferable securities” in the form of crypto-assets and of the “common understanding” that loans and credits can be provided by any means, including crypto assets;
o Clarification of the “common understanding” that asset freeze measures on “funds” and “economic resources” cover crypto-assets;
o Clarification that anti-circumvention provisions apply to all restrictions set out in Regulation 759/2006;
o Prohibition on the provision of specialized financial messaging services for three Belarusian banks (Belagroprombank, Bank Dabrabyt and Development Bank of the Republic of Belarus) and the Belarusian entities that they own for more than 50%;
o Prohibition on transactions related to the management of reserves, as well as of assets of the Central Bank of Belarus, including transactions with any entity acting on its behalf or at its direction;
o Prohibition, as of 12 April 2022, of the listing or provision of services on EU trading venues for transferable securities of any Belarusian entity with over 50% public ownership;
o Prohibition on the provision of public financing or financial assistance for trade with, or investment in, Belarus;
o Prohibition on deposits by Belarusian nationals, residents or entities, if the total value of their deposits exceeds EUR 100 000 per credit institution;
o Prohibition for Union central securities depositories from providing certain services for transferable securities issued after 12 April 2022 to any Belarusian citizen, resident or entity;
o Reporting requirements on credit institutions in relation to deposits exceeding EUR 100 000 held by Belarusian citizens, residents and entities, as well as Belarusian golden passport or golden visa holders;
o Prohibition on the sale of EUR denominated transferable securities issued after 12 April 2022 (or units in collective investments undertakings providing exposure to such securities) to any Belarusian citizen, resident or entity;
o Prohibition on the sale, supply, transfer or export of EUR denominated banknotes to Belarus or for use in Belarus;
o Confirmation that controls on items listed in Annex VII of Regulation 759/2006 do not apply to non-controlled items containing or more controlled components, subject to rules on circumvention.
EU Member States to Adopt New Sanctions Tomorrow: Member States are set to meet tomorrow to approve additional sanctions against Russia and Belarus. Sanctions expected to be adopted would consist in:
o additional asset freeze measures against oligarchs,
o restrictions on exports of maritime equipment and navigation technology, as well as related services,
o the removal of three Belarusian banks from the SWIFT system, and
o restrictions targeting cryptocurrencies
EU Excludes Oil & Gas Import Ban… For Now: while the EU is taking steps to reduce its dependency on Russian oil and gas, some Member States, notably Germany, the Netherlands, Bulgaria and Italy, have been reluctant to impose a ban on import thereof from Russia due to fears of the impact this may have on EU economies.
However, sanctions against Russian oil and gas are not completely off the table. Russia’s invasion of Ukraine will be at heart of an informal meeting of members of the European Council, convened for March 10 and 11, 2022. The question of whether the EU should ban impose sanctions against Russian energy is expected to be discussed again in that context.
High Representative Borrell Announces Sanctions Against Malign Disinformation Actors: speaking before the European Parliament, the chief of the European External Action Service announced an upcoming proposal for a “horizontal regime that will allow [the EU] to sanction malign disinformation actors”.
Member States representative discuss further sanctions against Russia, but face opposition from Germany and the Netherlands on energy import ban: As Member States continue to discuss the potential imposition of new sanctions against Russia, Germany has come forward to oppose a potential ban on imports of Russian oil and gas, noting that “Europe has deliberately exempted energy supplies from Russia from sanctions” and “Europe’s supply of energy for heat generation, mobility, power supply and industry cannot be secured in any other way”. The Netherlands are reportedly aligned with Germany’s position.
France, enforcing sanctions on Russia, seizes ship in English Channel. French authorities seized Russian cargo ship, “Baltic Leader” in the English Channel, following OFAC’s designation of the vessel as an entity owned by US and EU-sanctioned Promsvyazbank. https://www.reuters.com/world/europe/france-seizes-ship-suspected-violating-russia-sanctions-official-2022-02-26/
Dassault Halts Private Jet Sales to Russia on Sanctions. Dassault Aviation SA announced cessation of sales for business jets to Russian clients on sanctions lists and intention to “freeze contracts” following review of customer lists. https://www.bloomberg.com/news/articles/2022-03-04/france-s-dassault-halts-private-jet-sales-to-russia-on-sanctions
Member States Discuss New Sanctions Against Russia: EU foreign affairs ministers met today to discuss the potential adoption of a new sanctions package against Russia.
European Commission Introduces EU Sanctions Whistleblower Tool: The European Commission has rolled out a new tool to facilitate the reporting of potential sanctions violation. The tool takes the form of a secured online platform, which allows for the anonymous reporting of past, current or planned EU sanctions violations. Information reported through the tool will be analyzed by the European Commission, which will share anonymized reports to the Member States for enforcement.
EU Considers Removing Russia’s Most Favored Nation Treatment under WTO Rules: Member States have reportedly supported a decision to lift Russia’s most favored nation treatment under WTO rules, which means that the EU could impose higher tariffs on imports from Russia.
EU Leaders Consider New Sanctions Package: At a meeting of the EU Political and Security Committee, diplomats discussed new possible sanctions on Russia. These measures could target oligarch’s families, trust funds, and property. Further restrictions on SWIFT were discussed, the proposal received some pushback, with some insisting on waiting for the initial SWIFT bans to go into force 10 days from now before implementing new ones. Debate remained preliminary, but a new sanctions package could be put on the table as early as Friday. (https://www.politico.eu/article/eu-next-possible-russia-targets-ports-oligarch-families-trust-funds/).
Fourth Sanctions Package Against Russia Adopted: the legal texts finalizing the additional sanctions agreed by the EU Member States on February 27, 2022 have been adopted and target access to SWIFT, the Russian Direct Investment Fund, euro denominated banknotes and Russian State-owned media.
In detail, these measures consist of:
o Prohibitions on the provision of specialized financial messaging services against seven Russian banks (Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VEB and VTB Bank) and the Russian entities that they own for more than 50%;
o Prohibitions on the sale, supply, transfer or export of euro denominated banknotes to Russia;
o Prohibitions on investment, participation or contribution to projects co-financed by the Russian Direct Investment Fund;
o Prohibition on broadcasting of certain Russian State-owned media (RT and Sputnik) and suspension of broadcasting licenses, authorization, transmission and distribution arrangements.
o Reinforced cooperation between the United States and the European Union on the effectiveness and consistent application of export control measures.
The legal texts are available at:
Press releases are available at:
New Sanctions Against Belarus Adopted: while Member States had also agreed on February 27, 2022 to ramp up the existing sanctions against Belarus, the legal texts have also been adopted today and provide for far-reaching restrictions
New sanctions against Belarus include:
o Asset freeze measures against certain Belarusian military officers;
o Prohibitions on export and services (technical assistance, brokering services, other services, financing and financial assistance) related to:
These new restrictions are subject to various exceptions or authorizations, including for wind-down.
o Prohibition on import, transport and services (technical assistance, brokering services, financing and financial assistance) related to:
These new restrictions are subject to wind-down exceptions.
o Extension of existing controls:
o Removal of prior contract exceptions for restrictions on (i) tobacco products, (ii) potash, (iii) mineral products, (iv) access to capital and (v) insurance / re-insurance.
o Reinforced cooperation between “partner countries” and the European Union on the effectiveness and consistent application of export control measures.
Large German Firms Cut Ties with Russia: a number of large European firms have announced their intention to withdraw from or suspend sales to the Russian market, including Siemens, Mercedes-Benz and BMW.
Neighboring States Align Sanctions Packages with EU: The European Council released several statements welcoming neighboring states for aligning their sanctions with those already implemented by the EU. These neighboring countries include North Macedonia, Montenegro and Albania, Bosnia and Herzegovina, Iceland, Liechtenstein, Norway, and Ukraine. (https://www.consilium.europa.eu/en/press/press-releases/2022/03/01/declaration-by-the-high-representative-on-behalf-of-the-eu-on-the-alignment-of-certain-countries-concerning-restrictive-measures-in-view-of-russia-s-actions-destabilizing-the-situation-in-ukraine/).
EU Set to Delist 7 Banks from SWIFT: EU Ambassadors have agreed on a list of Russian banks to be removed from the SWIFT system. These include VEB RF, Bank Rossiya, VTB Bank, and Bank Otkritie. Sperbank and Gazprombank are not among the banks to be delisted in this preliminary round. The decision to delist the entities will ultimately need approval from the SWIFT board. (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-F03-01/card/eu-set-to-delist-seven-banks-from-swift-including-vtb-bank-bqT4IoQCgXHTW5uRofDp).
Third Sanctions Package Partially Enters Into Force: the following restrictive measures were adopted and immediately entered into force following their publication in the Official Journal:
o Asset freeze measures against 26 Russian oligarchs, politicians, journalists, media personalities and military officials, as well as one entity: SOGAZ;
o Travel ban measures against the individuals that have been designated as subject to asset freeze measures;
o Restrictions on Russian aircraft landing in, taking off from or overflying the territory of the EU; and
o Restrictions on transactions related to the management of reserves as well as of assets of the Central Bank of Russia.
Russian aircrafts & Russian Central Bank sanctions:
New asset freeze and travel ban measures:
Additional Sanctions Expected Shortly:
o For Russia: restrictions targeting access to SWIFT for selected Russian banks; restrictions on the issuance of golden passports and ban on certain Russian State-owned media in the EU;
o For Belarus: asset freeze measures and export control restrictions on mineral fuels, tobacco, wood and timber, cement, iron and steel, dual-use items.
While these sanctions have been politically endorsed, the legal texts have not been adopted yet.
EU Announces Further Measures Targeting the Air Transport and Media Sectors to Respond to the Russian Invasion of Ukraine: Following the announcement on February 26, 2022 of new restrictions targeting access to SWIFT, the Russian Central Bank, golden passport issuance and of the participation in transatlantic sanctions coordination, European Commission President Von der Leyen confirmed that the EU would also:
o Ban on EU airspace, by prohibiting Russian-owned, -registered or -controlled aircraft from landing in, taking or off or overflying the EU;
o Ban on Russian State-owned media in the EU, including Russia Today, Sputnik and their subsidiaries;
In the same address, referring to the joint announcement of February 26, the European President Commission indicated that:
o The Central Bank of Russia would be subject to an asset freeze;
o Russian oligarchs would be made subject to asset freeze measures.
EU Also Announces Further Measures Targeting Belarus, As Complicit in the Attack Against Ukraine: In the same address, the European Commission President announced that a new package of sanctions against Belarus would be adopted, including:
o Export control restrictions on mineral fuels, tobacco, wood and timber, cement, iron and steel, dual-use items;
o Asset freeze measures against “those Belarusians helping the Russian war effort”.
Political Endorsements of New Sanctions Packages February 28, 2022: In the evening of February 28, 2022, High Representative Borrell convened a meeting of EU Foreign Affairs Ministers to provide the political endorsement for the new sanctions packages against Russia and Belarus. He confirmed that the measures discussed above were approved by EU Member States, although details have not been circulated yet. Finalization of the legal texts and formal approval for adoption and publication in the Official Journal is expected “in the following hours”. High Representative Borrell confirmed that “everything needs to be done before tomorrow morning”.
EU Opens the Door for More Sanctions: in an address to the Ukrainian People, the European Council President, summarizing recent sanctions announcements, opened the door for more sanctions by concluding that the EU “will go further”.
o The Press and Information Office of the Federal Government of Germany stated that restrictions on access to SWIFT will apply to “all Russian banks that are already sanctioned by the international community, and, if necessary, other Russian banks.” (https://www.bundesregierung.de/breg-de/aktuelles/verbuendete-schliessen-russische-banken-aus-swift-aus-2008220).
The second sanctions package, in response to the invasion of Ukraine by Russian troops, was published and entered into force on February 25, 2022. Legal texts are available in the Official Journal of the EU at:
The package includes new sanctions and export controls providing for:
1. Additional asset freeze and travel ban measures against Russian and Belarusian politicians and officials. Putin and Lavrov included, although not subject to travel ban measures.
2. New Export Controls and Restrictions on Related Services (technical assistance, brokering services, other services, financing or financial assistance) to or for use in Russia, targeting:
(i) Dual-use items,
(ii) Goods and technology which might contribute to Russia’s military and technological enhancement, or the development of the defense and security sector (“Strategic Items”),
(iii) Goods and technology suited for use in oil refining, and
(iv) Goods and technology suited for use in aviation or the space industry.
Of note, exceptions or authorization schemes are foreseen to allow for the winding-down of operations based on existing contracts.
Furthermore, specific exceptions and authorizations are also foreseen for restrictions on dual-use items and Strategic Items, including an exception mechanism akin to general licenses and authorizations for exports or services for the exclusive use of Russian entities owned or controlled by EU or US entities.
3. A definition of “financing or financial assistance”, clarifying that this involves a disbursement or commitment to disburse its own funds or economic resources by the relevant provider.
4. Special authorization requirements for the export of and the provision of services related to dual-use items and Strategic Items to 64 State-owned entities in the military and defense sectors, whereby such exports and services can only be authorized based on specific grounds, reminiscing of the US BIS Entity List.
5. Restrictions on specific services related to goods and technology suited for use in aviation or the space industry, including:
(i) insurance and reinsurance; and
(ii) overhaul, repair, inspection, replacement, modification or defect rectification of an aircraft or component, with the exception of pre-flight inspection.
6. Restrictions on public financing or financial assistance for trade with or investment in Russia, subject to limited exceptions.
7. Extension of restrictions on access to capital to four State-owned and private banks, as well as eight State-owned companies in the aerospace and defence, automotive, military, infrastructure, shipping and shipbuilding sectors.
These restrictions target Alfa Bank, Bank Otkritie, Bank Rossiya, Promsvyazbank, Almaz-Antey, Kamaz, Novorossiysk Commercial Sea Port, Rostec, Russian Railways, JSC PO Sevmash, Sovcomflot and United Shipbuilding Corporation. They also extend to certain entities which they own for more than 50% or which act on their behalf or at their direction.
These restrictions affect transferable securities / money-market instruments issued after April 12, 2022 and loans / credits granted after February 26, 2022.
8. Existing restrictions on access to capital, as applicable to Sberbank, VTB Bank, Gazprombank, VEB, Rosselkhozbank, OPK Oboronprom, United Aircraft Corporation, Uralvagonzavod, Rosneft, Transneft and Gazprom Neft, were reinforced.
9. Restrictions on the listing and provision of services on EU-registered or -recognised trading venues for transferable securities of Russian entities with over 50% public ownership as of April 12, 2022.
10. Restrictions on financial inflows and investments from Russia to the EU, targeting:
(i) A prohibition on deposits by Russian nationals, residents and entities exceeding 100 000 EUR per credit institution, coupled with specific reporting requirements for credit institutions (covering also “golden passports” or “golden visas” holders);
(ii) A prohibition for EU central securities depositories from providing certain services for transferable securities issued after April 12, 2022 to any Russian national, resident or entity;
(iii) A prohibition on the selling of euro denominated transferable securities issued after April 12, 2022 or units in collective investment undertakings providing exposure to such securities to any Russian national, resident or entity.
11. Restrictions on visa policies through the partial suspension of the application of the EU-Russia Agreement on the facilitation of the issuance of visas.
A third EU sanctions package is already under discussion, although details are yet to emerge. Expected measures could involve additional asset freeze measures (notably to target oligarchs) and further restrictions on the financial sector.
Following a meeting of EU Ministers for Finance on February 25, 2022, they announced that the European Commission and the European Central Bank have been tasked to “assess the consequences of cutting further the access of Russian institutions to the financial system. All options are on the table”.
EU to Sanction Putin, Lavrov: In a Friday press conference, EU High Representative for Foreign Affairs Josep Borrell confirmed that the EU was moving to sanction Russian President Vladimir Putin and Russian Foreign Minister Sergei Lavrov. The pair maynot be subject to a travel ban in an attempt to keep diplomatic channels open. (https://www.ft.com/content/5e7282fc-4ea0-482d-a81a-8abb52228472).
EU Finance Ministers Promise “Immediate” Sanctions Implementation: In a press conference, the Finance Ministers of the European Union supported the restrictive measures agreed upon on Febryart 25, and promised to implement the sanctions package in their home countries “immediately.” The statement came after a meeting where they discussed the economic consequences of the Ukraine invasion, particularly in the energy sector. (https://www.consilium.europa.eu/de/press/press-releases/2022/02/25/ukraine-press-statement-from-the-eu-ministers-for-finance-european-commission-and-the-european-central-bank/).
Second Sanctions Package Announced: The adoption of a second sanctions package has been announced by the European Commission’s president in the early hours of the day:
The package was announced to (i) “target strategic sectors of the Russian economy by blocking their access to technologies and markets that are key for Russia” and (ii) “freeze Russian assets in the European Union and stop the access of Russian banks to European financial markets”
Initial Sanctions Package Adopted: The European Council adopted conclusions on Russia’s unprovoked and unjustified military aggression against Ukraine in the evening of February 22, 2024 (https://www.consilium.europa.eu/en/press/press-releases/2022/02/24/european-council-conclusions-24-february-2022/)
These lay out, in general terms, the scope of this second sanctions package: “[t]hese sanctions cover the financial sector, the energy and transport sectors, dual-use goods, as well as export control and export financing, visa policy, additional listings of Russian individuals and new listing criteria”.
Although the precise scope of this second sanctions package has not been disclosed, measures reported as under consideration include:
(i) additional asset freeze measures;
(ii) new listing criteria;
(iii) restriction on new listings on EU stock exchanges for certain State-owned entities;
(iv) extension of restrictions on access to capital to certain banks and state-owned enterprises, notably in the aerospace, defense, shipping and shipbuilding sectors;
(v) restrictions on export and services related to:
– dual-use goods,
– strategic goods for the military sector and advanced technologies (including electronics, sensors, telecommunications, marine applications and lasers),
– aircraft and parts, and
– equipment needed to upgrade Russian oil refineries;
(vi) restrictions on new large deposits by Russian nationals in EU financial institutions; and
(vi) restrictions on visa-free travel for Russian diplomatic passports.
The legal texts of this second sanctions package are expected to be finalized and formally adopted on February 25, 2022.
The European Council’s conclusions of February 24, 2022 confirm that a new sanctions package against Belarus should be prepared, to be adopted at a later date.
EU Sanctions Published – EU sanctions published just before midnight CET (February 23, 2020): https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2022:042I:FULL&from=FR
o Sanctions against over 375 individuals and entities, notably including Bank Rossiya, Promsvyazbank and VEB.RF, several banking executives, high-ranking public officials and businesspersons
o Restrictions on non-government controlled areas of Donetsk and Luhansk
o Restrictions on the ability of the Russian government to access capital and financial markets and services
(i) Dmitriy Yuryevich GRIGORENKO, Chairman of the Supervisory Council of the VTB Bank;
(ii) Maxim Gennadyevich RESHETNIKOV, member of the Supervisory Council of the VTB Bank
(iii) Denis Aleksandrovich BORTNIKOV, Deputy President and Chairman of VTB Bank Management Board; and
(iv) Andrei Leonidovich KOSTIN, President of the VTB Bank Management Board.
The implications this may have in terms of whether VTB Bank might be considered as “controlled” by sanctioned parties would need to be further considered.