EU Announces New Rounds Of Sanctions As Russia's War In Ukraine Marks One Year

• Jurisdiction: European Union
• Law Firm: Hughes Hubbard & Reed LLP
• Subject Matter: International Law, Export Controls & Trade & Investment Sanctions
• Author: Mr Jan Dunin-Wasowicz, Edouard Gergondet, Nicolas Burnichon and Aurore Maroteau
• Published date: 13 March 2023

Nine years after the beginning of Russia's invasion and occupation of Crimea and one year after its full-scale invasion of Ukraine, the G7 Leaders issued a statement on February 24, 2023, committing to strengthening existing sanctions against Russia and "presenting a united front through the imposition of new coordinated economic actions against Russia." Acting on this statement, new sanctions were introduced in the days that followed by the European Union and the United States (See HHR Client Advisory).

On February 25, 2023, the EU adopted a tenth package of restrictive measures (sanctions) against Russia, "giving another turn of the screw to the government of the Russian Federation and those responsible for Russia's continuing war of aggression." The new package introduces a series of measures designed to further weaken the Russian government's ability to wage and finance its war, including (i) new asset freeze listings, (ii) enhanced reporting obligations, (iii) trade sanctions affecting more than 11.4 billion euros of exports and 1.3 billion euros of imports, and (iv) sectoral sanctions in the field of energy, transport and media.

The new EU measures were implemented through five Council Decisions and five Council Regulations.

1. Individual restrictive measures

New designations

On February 25, 2023, the EU added 87 individuals and 34 entities to its restricted parties list through Council Implementing Regulation 2023/429. The newly-listed individuals and entities include, among others, decision makers, proxy authorities in occupied regions of Ukraine, individuals and entities related to the Russian military and defense sectors, individuals responsible for the deportation and forced adoption of Ukrainian children, propagandists and media entities, entities providing substantial sources of revenue to Russia (including in the financial and industrial sectors), as well as four Iranian individuals involved in the supply of drones to Russia and one shipping company from the United Arab Emirates linked to Sovcomflot. Newly-designated entities include financial institutions such as Alfa-Bank, Rosbank, Tinkoff Bank and the Russian National Reinsurance Company, as well as the National Wealth Fund of the Russian Federation.

In total, as of today, 1473 individuals and 205 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.

Additions to the EU's restricted parties were also adopted on the same day against one individual under the Mali sanctions regime, through Council Implementing Regulation 2023/428, and against eight individuals and seven entities under the Global Human Rights Sanctions regime, through Council Implementing Regulation 2023/430, all related to the Wagner Group.

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 respectively added to the EU's restricted parties list.

Extension of existing deadlines for derogations

Pursuant toCouncil Regulation 2023/426, the wind down period for divestments has been extended. Authorizations can now be granted for the sale and transfer of proprietary rights owned by asset freeze targets in EU entities by May 31, 2023 (instead of February 28, 2023) or six months from their listing, whichever is later.

New derogations

Pursuant to Council Regulation 2023/426, the relevant enforcement authorities of the competent Member States ("National Competent Authorities") may authorize the release of certain frozen funds or economic resources of, or the making available of certain funds or economic resources to:

• Alfa-Bank, Rosbank and Tinkoff Bank for
  • The termination by August 26, 2023, of operations, contracts or other agreements concluded with those banks before February 25 2023; and
  • Transactions that are necessary for the purchase, import or transport of agricultural and food products (including wheat and fertilizers).
• Alfa-Bank for
  • Transactions for the disbursement of funds by the Jewish Claims Conference to beneficiaries in the Russian Federation by November 26, 2023, irrespective of when the operations, contracts or other agreements were concluded.
• Commercial Vehicles - GAZ Group for
  • The termination by August 26, 2023, of operations...