On 24 June 2024, the Council of the EU adopted its fourteenth package of restrictive measures against Russia, which supplements those discussed in our previous newsflashes. The new package targets 116 additional individuals and entities, along with key sectors of the Russian economy such as energy, finance, and trade. Tighter anti-circumvention measures have also been introduced, including additional due diligence requirements for EU operators.
The Council of the EU has adopted two regulations which both entered into force on 24 June 2024:
- Council Regulation (EU) 2024/1739 of 24 June 2024 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine.
- Council Regulation (EU) 2024/1745 of 24 June 2024 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine.
Anti-circumvention
First, EU operators will have to go the extra mile to ensure they do not take part in any activities that undermine EU sanctions. EU operators were already prohibited from knowingly and intentionally participating in activities the object or effect of which is to circumvent sanctions. The prohibition now explicitly includes activities where an EU operator is aware that its participation may have that object or effect and it accepts that possibility, without deliberately seeking to circumvent sanctions.
EU operators must also make "best efforts" to prevent their foreign subsidiaries from participating in activities that undermine the restrictive measures.
EU operators will have to perform greater due diligence to prevent goods critical to the development of Russian military from reaching Russia, and to ensure that their foreign subsidiaries do the same.
Finally, EU operators that transfer industrial know-how for battlefield goods to third-country counterparts will now have to include contractual provisions to ensure that such know-how will not be used for goods intended for Russia.
Protection of EU operators against foreign proceedings and expropriation
The Council of the EU introduced mechanisms which allow EU operators to claim compensation from Russian persons, for damages incurred due to foreign proceedings and expropriation.
Persons subject to an asset freeze
An additional 69 individuals and 47 entities have been added to the list of persons subject to an asset freeze. This includes Sovcomflot, Russia's largest shipping company specialised in the transport of liquefied gas, crude oil, and petroleum products.
New measures against Russian liquified natural gas (LNG)
The new package prohibits the provision of reloading services in the EU for transshipment operations of Russian LNG (originating in Russia or exported from Russia). Authorities can authorise such activities to ensure the EU's energy supply.
The package also prohibits new investments and the provision of goods, technology, and services for the completion of Russian LNG projects such as Arctic LNG 2 and Murmansk LNG.
Restrictions have also been introduced to target the import of Russian LNG through European LNG terminals that are not connected to the EU gas pipeline network.
New prohibition in relation to the SPFS system
EU operators are now prohibited from connecting to the SPFS system – a Russian version of the SWIFT financial messaging service. Specific exceptions exist to connect to the SPFS system for legitimate business transactions.
Transportation
In the maritime sector, further measures have been adopted to target specific vessels contributing to Russia's warfare against Ukraine, making them subject to a port access ban and a ban on the provision of services.
The new measures broaden the prohibition on the transport of goods by road by targeting EU entities that are 25% or more owned by a Russian person.
In the aviation sector, the new measures broaden the flight ban to any aircraft used for a non-scheduled flight where a Russian person can effectively determine the place or time of take-off and landing (e.g., to reach a holiday destination or a business meeting).
New import-export restrictions
Further restrictions have been placed on the export of goods which contribute to Russian industrial capabilities, targeting chemicals, plastics, excavating machinery, monitors and electrical equipment.
Additional restrictions on the import of Russian helium have been imposed.
Funding of political parties and other organisations
Political parties, foundations, alliances, non-governmental organisations (including think tanks), and media service providers in the EU are now prohibited from accepting financing, donations or any other economic benefit or support from Russia, whether directly or indirectly.
Sanctions against Belarus
Finally, the EU has also announced a new package of sanctions against Belarus. The new measures are designed to close loopholes and prevent circumvention of existing sanctions, with the aim of increasing pressure on Belarus and strengthening the effectiveness of EU sanctions against Russia.
Other measures
These include:
- New restrictions for Russian operators to register certain intellectual property rights in the EU.
- A transaction ban with Russian persons that lodged certain claims against EU persons before Russian courts, as listed in Annex XLIII of Regulation No 833/2014.
- A transaction ban with certain credit and financial institutions or crypto asset services providers established outside the EU, which facilitate transactions that support Russia's defence industrial base.
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