Ukraine/Russia ● 11th EU sanctions package (freezing of funds and restrictive measures) applicable in Monaco

The 11th package of European Union sanctions, applicable to Monaco, includes measures to freeze funds and economic resources, as well as restrictive measures (sectoral and individual), which should not be confused.

Their primary purpose is to combat the increasing circumvention of EU sanctions.

Freezing of funds and economic resources

Pursuant to Council Implementing Regulation (EU) 2023/1216 of 23 June 2023 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, Ministerial Decision 2023-52 of 26 June 2023 added 104 entries (71 individuals, 33 entities) to the national list for freezing funds and economic resources.

It should also be noted that the European asset freeze regime was reviewed twice in June 2023.

The criteria for designation on the list of natural or legal persons, entities or bodies subject to an asset freeze and a prohibition on making funds and economic resources available to designated persons or entities have been amended.

—The amendments resulting from Council Regulation (EU) 2023/1215 of 23 June 2023 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, which gives effect to Council Decision (CFSP) 2023/1218 of 23 June 2023:

Natural or legal persons, entities or bodies that facilitate violations of the ban on circumvention or that significantly undermine not only the asset freeze measures but also all the restrictive measures (see below) imposed against Russia in connection with the situation in Ukraine, the annexation of Crimea and Sevastopol, and the recognition of the Ukrainian oblast areas of Donetsk and Luhansk may now be included on the asset freeze list.

The EU is targeting operators from third countries, not subject to the restrictive measures, who would help Russia to circumvent them, which could potentially strengthen its ability to wage war. and weaken the effectiveness and purpose of these restrictions.

According to the Council, the following indicators could signal a circumvention of the restrictive measures:

1. A company from a third country whose main activity is to purchase goods subject to restrictions within the EU which are then transported to Russia.
2. The involvement of Russian persons or entities at any stage of the process.
3. The recent establishment of a company for the purpose of handling restricted goods destined for Russia.
4. A significant increase in the turnover of a third country company involved in these activities.
   in a way that contributes to Russia's ability to wage war).

Regulation (EU) No 269/2014 also introduced new exemptions from the freeze to allow the disposal of assets held in Russian companies and certain types of securities held jointly with certain listed entities, or the provision of pilot services in specific circumstances, or the continuation of business activities (establishment, certification or evaluation of a firewall removing the control that a listed person has over the assets of an EU entity).

— The amendments resulting from Council Regulation (EU) 2023/1089 of 5 June 2023 amending Regulation (EU) No 269/2014, which gives effect to Decision (CFSP) 2023/1094 of 5 June 2023:

It is now possible to designate on the freeze list influential businesswomen and businessmen operating in Russia [in any economic sector] and members of their close families or other natural persons who benefit from them, or businesswomen and businessmen [removal of the criterion of influence], legal persons, entities or bodies engaged in economic activities that provide a substantial source of income to the Government of the Russian Federation, which is responsible for the annexation of Crimea and the destabilisation of Ukraine.

In this way, the Council aims to increase pressure on the Russian government by combating the practice of influential businessmen and women dividing their funds and assets among close family members and others, often with the aim of concealing these assets, circumventing restrictive measures and retaining control of the resources at their disposal.

In practice, these new criteria make it more difficult for professionals to anticipate who may be subject to future sanctions, which means that updates to the national assets freeze list will have to be monitored even more closely.

Restrictive measures (sectoral and individual)

Council Regulation (EU) 2023/1214 of 23 June 2023 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine, gives effect to Council Decision (CFSP) 2023/1217 of 23 June 2023. In particular:

• Extension of the ban on supplying securities to persons in Russia to financial instruments denominated in any currency;
• Extension of the list of items that contribute to Russia's military and technological build-up or to the development of its defence or security sector (e.g. electronic components, semi-conductor materials, precursors of energy and weapons materials, etc.);
• Additional restrictions on exports of goods likely to contribute to the strengthening of Russian industrial capacities;
• Intellectual property bans to prevent access to or re-use of protected material and information (in relation to goods and technology whose sale, supply, transfer or export to a person, entity or body in Russia or for use in Russia is prohibited);
• Suspension of the EU broadcasting licences of two Russian media under the permanent control of the Russian leadership, and a ban on broadcasting their content.
• Extension of the ban on transporting goods by road in the EU on trailers and semi-trailers registered in Russia, including when they are towed by lorries registered outside Russia.
• Prohibition of access to ports and locks on EU territory for ships in respect of which the competent authorities have reasonable grounds to suspect that they are illegally jamming, switching off or deactivating their on-board Automatic Identification System (AIS) when carrying Russian crude oil and petroleum products, in breach of SOLAS regulation V/19, point 2.4.

In addition, 87 new entities (Russian and from third countries: Iran, China, Uzbekistan, the United Arab Emirates, Syria and Armenia) have been added to the list of entities directly supporting Russia's military-industrial complex (against which stricter restrictions have been imposed on exports of dual-use goods and technologies and goods and technologies likely to contribute to the technological strengthening of Russia's defence and security sector).

Finally, exemptions and derogations are provided for in order not to harm Hungary, Japan and EU supplies:

• Exemption from the ban on the purchase, import or transfer of certain items which generate substantial revenue for Russia and which are necessary for the operation, maintenance or repair of cars on line 3 of the Budapest metro.
• Extension until 31 March 2024 of the exemption from the price cap mechanism for the Sakhalin-2 (Сахалин-2) project, located in Russia, to ensure Japan's energy security.
• Introduction of exemptions to the bans so as not to jeopardise critical energy supplies, imports of which from third countries into the EU are not banned, guarantee the proper maintenance and operation of Caspian Pipeline Consortium (CPC) infrastructure, which allows the purchase, import or transfer of goods falling under CN code 2709 00 that originate in Kazakhstan and only load, depart or transit in Russia.

On the other hand, the temporary derogation granted to Germany and Poland for the supply of crude oil to Russia via the northern section of the Druzhba pipeline has come to an end.