Ukraine ● Focus on the 14th EU sanctions package (sectoral and individual restrictive measures)

Note: on 22 July 2024, the Council of the EU decided to renew the restrictive measures for a further 6 months, until 31 January 2025 (Press release).

By Decision (CFSP) 2024/1744 of 24 June 2024, the Council of the EU adopted the 14th package of sanctions, which includes sectoral restrictive measures. These measures target high value-added sectors of the Russian economy (energy, finance, trade and others), with measures to prevent sanctions being circumvented.

In addition, Decision (CFSP) 2024/1738 of 24 June 2024 adds 69 persons and 47 entities to the list of persons, entities and bodies subject to individual restrictive measures: ban on entry into or transit through the territory of the EU Member States, freezing of funds and economic resources and ban on making funds available to them.

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SECTORAL RESTRICTIVE MEASURES:

Financial sector

• prohibition on EU entities operating outside Russia from connecting to the ‘Financial Message Transfer System (SPFS)’ or equivalent specialised financial messaging services developed by the Central Bank of Russia in order to neutralise the effects of the restrictive measures;
• ban on EU operators carrying out transactions with specifically listed entities using the SPFS outside Russia;
• prohibiting transactions with targeted financial and credit institutions and crypto-asset service providers established outside the EU, where these entities facilitate transactions that support Russia's defence industrial base through the export, supply, sale, transfer or transport to Russia of dual-use goods and technology, sensitive items, battlefield goods, firearms and ammunition.

Foreign funding

• ban on political parties or foundations, alliances, non-governmental organisations (NGOs) - including think tanks - and media service providers in the EU accepting funding, donations or any other economic advantage or support from Russia, whether direct or indirect, in order to combat propaganda and disinformation campaigns.

Arbitration of disputes between Russian or foreign nationals relating to restrictive measures

• allow the imposition of a prohibition on transactions by companies that have recourse to the new provisions of the Russian Arbitration Procedural Code, which give Russian courts, unless otherwise provided for in an international treaty concluded by Russia or an agreement between the parties, exclusive jurisdiction in disputes involving persons subject to restrictive measures or in disputes between a Russian or foreign national and another Russian or foreign national, if such disputes relate to restrictive measures (allowing claims against the assets of EU companies in a third country, which they would otherwise be prohibited from satisfying pursuant to Regulations (EU) No 833/2014 and No 269/2014).

Intellectual property rights and trade secrets

• Restrictions on the acceptance of applications for registration in the EU of certain intellectual property rights by Russian nationals, natural persons resident in Russia and Russian companies, in order to neutralise a competitive advantage for Russian industry resulting from the deprivation of the holders of intellectual property rights from EU Member States of their protection in Russia;
• Obligation for EU operators to contractually prohibit their commercial interlocutors in third countries from using intellectual property rights, materials or information protected by intellectual property rights or as business secrets transferred to them in connection with high-priority items destined for Russia.

Import/Export

• EU operators selling, supplying, transferring or exporting high-priority items to third countries must implement due diligence mechanisms to detect, assess and mitigate the risks of re-export to Russia. Operators must also ensure that their subsidiaries apply these procedures and, from a general point of view, do not participate in the circumvention of sanctions.
• Individual restrictive measures: addition of 61 new entities to the list of persons, entities and bodies supporting Russia's military-industrial complex (including 28 established in Russia and 33 in third countries such as China, Turkey and Kyrgyzstan).
• Addition of certain ‘machine tools’ (e.g. turning, grinding or milling machines) and certain types of ‘all-terrain vehicles’ (e.g. quad bikes and off-road vehicles) to the list of restricted items.
• Restrictions on certain chemicals, including manganese ores, rare earth compounds, plastics, excavators, monitors and electrical equipment.
• Restrictions on imports of helium.
• Addition of Liechtenstein as a partner country for iron and steel imports.

Transport sector

• Measures to prevent circumvention of the flight ban: extension of the ban on landing in, taking off from or flying over EU territory to any aircraft used in the course of a non-scheduled flight and for which a Russian natural or legal person, entity or body is able to determine the actual place or time of take-off or landing; obligation, for non-scheduled flights, for operators to provide, at the request of the competent authorities of the Member State of departure, destination or overflight, the information necessary to verify compliance with the flight ban (information relating to the ownership of aircraft and, where there are reasonable grounds to suspect circumvention of the flight ban, information relating to passengers).
• Anti-circumvention measures for the ban on transporting goods by road within the EU: ban on EU operators that are 25% or more owned by a Russian natural or legal person becoming a road transport company or transporting goods by road within the EU, including in transit.
• Introduction of a sectoral ban on ships: ban on ships: that contribute to Russia's ability to wage war against Ukraine from accessing EU Member States' ports and locks and a wide range of shipping-related services.

Energy sector

• ban on Russian LNG reloading services on EU territory for the purpose of transhipment operations to third countries, applicable to ship-to-ship and ship-to-shore transfers, as well as to reloading operations (impact on re-exports to third countries via the EU, but not on imports);
• an on new investment and the supply of goods, technology and services for the completion of LNG projects currently under construction (Arctic LNG 2, Murmansk LNG);
• restrictions on imports of Russian LNG via EU terminals not connected to the natural gas network.

Cultural, scientific, historical or religious property

• Introduction of a ban on the purchase, import, transfer or export of Ukrainian cultural property and other property of archaeological, historical, cultural, rare scientific or religious significance, where there are reasonable grounds to suspect that such property has been removed from Ukraine illegally; introduction of a ban on related services.

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