EU Adopts 13th Package Of Sanctions Against Russia Two Years After Its Full?Scale Invasion Of Ukraine And War Of Aggression - Export Controls & Trade & Investment Sanctions - Worldwide

Gunnar Larson g at xny.io
Fri Mar 8 01:30:37 PST 2024 

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February 23, 2024  – On February 23, 2024, the European Union (“EU”)
 adopted <https://ec.europa.eu/commission/presscorner/detail/en/ip_24_963> a
thirteenth package of restrictive measures (sanctions) against Russia after
two years of its war of aggression against Ukraine. The measures aim
at “*further
limiting Russia's access to military technologies*” and to “*drain the
Russian war machine of its revenue sources and key goods and technology*”.
The new EU sanctions were implemented  through
<https://eur-lex.europa.eu/oj/daily-view/L-series/default.html> two Council
Decisions and two Council Regulations.

According to a  factsheet
<https://ec.europa.eu/commission/presscorner/detail/en/fs_24_1021> on the
impact of sanctions also published by the Commission on February 23, 2024,
“[t]*he prospects for the Russian economy for the medium to long term are
bleak. Russia is now a war economy, internationally isolated, over‑reliant
on state support, and more dependent than ever on energy resources and on
the import of technology from China*.” In this context, the latest round of
EU sanctions seeks to tighten measures against Russia's military and
defense sector, targeting further entities in third countries who supply
equipment, as well as those responsible for the illegal deportation and
military re-education of Ukrainian children.
1. Individual restrictive measures

New designations

On February 23, 2024, the EU  added
<https://ec.europa.eu/commission/presscorner/detail/en/ip_24_963> 106
individuals and 88 entities to its restricted parties list through  Council
Implementing Regulation 2024/753
<https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L_202400753>.
The newly-listed entities include Russian companies active in the military
and aviation sectors, especially those manufacturing missiles, drones, and
high-tech components for weapons, companies and individuals supporting the
provisions of armaments in Russia, as well as companies and individuals
involved in the forced transfer and in deportation of Ukrainian children.

In total, as of today, 2144 individuals and entities have been placed on
the EU restricted parties list under the Russian program in respect of
actions undermining or threatening the territorial integrity, sovereignty,
and independence of Ukraine.

Newly-designated individuals and entities are subject to an asset freeze
and a prohibition from making funds and economic resources available to
them, as well as, for individuals, a travel ban in the EU as of the date on
which they were added to the EU restricted parties list.

2. Export-related restrictions

Dual-use (Annex I of Regulation 2021/821) and advanced technology items
(Annex VII of Regulation 833/2014)

   - Extension of the list of entities subject to enhanced restrictions in
   relation to dual-use and advanced technology items  to cover an
   additional 17 new Russian companies and 10 non-Russian entities (Annex IV
   of Regulation 833/2014). Among the non-Russian entities, all trading in the
   area of electronic components, four companies are registered in the
   People's Republic of China (RG Solutions Limited, Guangzhou Ausay
   Technology Co Limited, Shenzhen Biguang Trading Co. Ltd and Yilufa
   Electronics Ltd.) and one each registered in Kazakhstan (TOO Elem Group),
   India (Si2 Microsystems Pvt Ltd), Serbia (Conex Doo Beograd-Stari Grad),
   Thailand (Thai IT Hardware Co. Ltd), Sri Lanka (Euro Asia Cargo (Private)
   Ltd.), and Turkey (Yildiz Çip Teknoloji Elektronik Elektrik Bilgisayar
   Malzemeleri Ticaret Sanayi Limited Sirketi).
   - The list of advanced technology items in Annex VII of Regulation
   833/2014 was extended to include “Aluminum electrolytic fixed electrical
   capacitors” (excluding power capacitors) which have military applications
   (CN Code 8532 22).

Goods which could contribute in particular to the enhancement of Russian
industrial capacities (Annex XXIII of Regulation 833/2014)

   - Extension of the list of goods which could contribute in particular to
   the enhancement of Russian industrial capacities listed in Annex XXIII of
   Regulation 833/2014 to cover every item with the tariff position 8504,
   meaning all “Electrical transformers, static converters (for example,
   rectifiers) and inductors” instead of only the goods within CN Codes
   850432, 850433 and 850434. This amendment is one of the measures to enhance
   air defense in Ukraine, as these items can be used as drone components.
   - New exemption  - The EU introduced an exemption to article 3*k * of
   Council Regulation 833/2014, for the performance until 25 May 2024 of
   contracts *concluded before 24 February 2024, or of ancillary contracts
   necessary for the performance of such contracts**,* as to export of the
   “Electrical transformers, static converters (for example, rectifiers) and
   inductors” falling under CN codes 850410, 850421, 850422, 850423, 850431,
   850440, 850450 or 850490.


3. Import-related restrictions

Iron and steel (Annex XXXVI of Regulation 833/2014)

   - Strengthening of international cooperation -The new package adds the
   United Kingdom to the list of partner countries excluded from the iron and
   steel imports restriction, in addition to Switzerland and Norway, by
   amending the Annex XXXVI of Regulation 833/2014.


4. New FAQs and Guidance on Sanctions Against Russia

Since our  last alert
<https://www.hugheshubbard.com/news/eu-adopts-12th-package-of-sanctions-against-russia-for-its-continued-illegal-war-against-ukraine>,
the Commission has made several updates to its FAQs on the implementation
of Regulations 833/2014 and 269/2014 on its  dedicated webpage
<https://finance.ec.europa.eu/eu-and-world/sanctions-restrictive-measures/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#sanctions>,
including these:

   - Restrictions targeting software
   <https://finance.ec.europa.eu/publications/software_en>: This new FAQ
   specifies what kind of services are prohibited by listing explicitly
   certain (i) software for the management of Enterprise (e.g., ERP or CRM),
   and (ii) design and manufacturing software (e.g., BIM or ETO).
   - Notification and authorization of tanker sales
   <https://finance.ec.europa.eu/publications/tanker-sales_en>: This new
   FAQ sheds some light on the scope of the provision set forth in Article 3q
   of Council Regulation 833/2014, notably by defining what is meant by “other
   transfer of ownership” or “other arrangement entailing a transfer of
   ownership”. The Commission also shared a template of notification that can
   be used by the owner of a tanker in case of sales or other ownership
   transfer.
   - “No re-export to Russia” clause
   <https://finance.ec.europa.eu/publications/no-re-export-russia-clause_en>
   :  This new FAQ is provides guidance on the new requirement, adopted in
   the 12th package, to include a “no re-export to Russia” clause in contracts
   for the export of certain controlled items to third countries. The
   Commission stressed that Article 12g turns this practice of inserting
   sanctions clauses into a legal requirement for certain sensitive goods.
   This FAQ clarifies the application timeline of this new requirement for
   contracts concluded before and after December 19, 2023. It also defines
   what is meant by “adequate remedies” that should be included in such a
   clause pursuant to Article 12g. It finally provides an indicative template
   that EU operators can use.

The Commission also released an updated version of the Guidance for  EU
operators on the implementation of enhanced due diligence to shield against
Russia sanctions circumvention
<https://finance.ec.europa.eu/publications/guidance-due-diligence_en>, as
well as an updated  list of common high priority items
<https://finance.ec.europa.eu/publications/list-common-high-priority-items_en>
.
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