In late June, the European Union adopted the 14th package of economic and individual restrictive sanctions on Russia. The aim of this new wave of restrictions is to deal a further blow to Putin’s regime and those who perpetuate his war of aggression against Ukraine.
The latest package includes restrictive measures on additional 116 individuals and entities responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, as well as industry-specific measures. Read on for more details on the latest restrictions by category.
Energy Sector Sanctions
In order to ensure that European facilities are not used to transship Russian liquified natural gas (LNG) to third-party countries, the EU has forbidden reloading services of Russian LNG in EU territory for the purpose of transshipment operations to third-party countries. This covers both ship-to-ship transfers and ship-to-shore transfers, as well as reloading operations. This restriction does not affect imports, only exports to third-party countries via the EU. Additionally, the EU’s latest package prohibits new investments in LNG projects.
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Financial Sanctions
The EU outlawed the use of the ‘System for Transfer of Financial Messages’ (SPFS), a specialized financial messaging service developed by the Central Bank of Russia to neutralize the effect of restrictive measures. EU entities operating outside of Russia will be forbidden from connecting to the SPFS or equivalent specialized financial messaging services. European companies are also banned from making transactions with listed entities using SPFS outside of Russia.
Additionally, this package of sanctions introduced a ban on transactions with targeted financial institutions and cryptocurrency providers established outside of the EU. The Council identifies a list of entities that have been known to facilitate transactions that support Russia’s defense-industrial base through the export, supply, sale, or transfer of dual-use goods and technology, sensitive items, firearms, and ammunition.
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Anti-circumvention Restrictions
An additional portion of this new sanctions package equips the EU with additional tools to crack down on sanctions circumvention. European companies will now be required to make an effort to ensure that their subsidiaries do not take part in any activities that would go against any existing sanctions.
In order to help counter the re-exportation or diversion of military goods found in Ukraine, EU operators selling such products will need to implement due diligence mechanisms capable of identifying and assessing risks of re-exportation to Russia, and further mitigating any associated risk. This restriction also applies to the “industrial know-how” of the production of military goods.
To learn more about anti-circumvention tactics and strategies, watch a replay of our webinar: Russia Export Controls and Dual-Use Technology: Mitigating Diversion Risk.
