News Story

Russia/Ukraine: Additional EU Sanctions Against Russia

September 08, 2014

Sectoral Sanctions. The EU has adopted Council Regulation No. 960/2014, dated September 8, 2014 (amending Council Regulation 833/2014 of July 31, 2014). The new regulation expands the existing EU sanctions regime, including prohibition of the following:

  • The sale, supply, transfer, or export, directly or indirectly, of certain “dual-use” goods and technology to nine designated Russian entities in the defense sector. The affected goods and technology are listed in Annex I to EU Regulation (EC) No. 428/2009, which establishes export controls for goods and technology capable of civil or military applications. Related services, technical assistance, and financing are also prohibited. There are certain exceptions, including for preexisting contracts or for use in the aeronautics and space sector.
     
  • Provision of the following services for deepwater oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia, directly or indirectly: drilling, well testing, logging and completion services, or supply of specialized floating vessels. Exceptions apply in cases of preexisting contracts or certain events threatening health or environmental impact.
     
  • Provision of financing or insurance, directly or indirectly, in connection with goods or technology listed in the “Common Military List” established by the EU (or related technical assistance) to any person in Russia.
     
  • The purchase or sale of, provision of investment services for or assistance in the issuance of, or other dealings with certain debt or equity securities issued by designated Russian financial institutions (Gazprombank, Russian Agricultural Bank, Sberbank, VEB, VTB Bank), their subsidiaries outside the EU, or persons acting on their behalf. The affected securities now include shares or equivalent securities, certain bonds or other forms of “securitized debt,” or depositary receipts (collectively defined as “transferable securities”) and money-market instruments. The ban applies to debt securities issued from August 2 to September 12, 2014 with a maturity greater than 90 days and after September 12, 2014 with a maturity greater than 30 days.
     
  • The purchase or sale of, provision of investment services for or assistance in the issuance of, or other dealings with certain debt or equity securities issued by designated Russian entities connected with military goods or services (three entities are currently listed, including United Aircraft) or the sale or export of crude oil or petroleum products (Gazprom Neft, Rosneft, and Transneft are currently listed), together with their subsidiaries outside the EU or persons acting on their behalf. Again, the affected securities include transferable securities and money-market instruments. The ban applies to debt securities with a maturity greater than 30 days.
     
  • Any arrangements for new loans or credit with a maturity exceeding 30 days to any person covered under the previous two points (i.e., the designated Russian financial institutions, listed entities connected with military goods or services or the sale or export of crude oil or petroleum products, their subsidiaries outside the EU, or persons acting on their behalf). Exceptions are provided for “loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the [EU] and Russia or . . . to provide emergency funding to meet solvency and liquidity criteria” for EU subsidiaries of the designated Russian financial institutions (Gazprombank, Russian Agricultural Bank, Sberbank, VEB, VTB Bank), but these exceptions do not allow funding of the persons covered under the previous two points.
     
  • Participation in activities that have the object or effect of circumventing the above prohibitions.

See here

Direct Sanctions. The EU also adopted Council Regulation No. 961/2014, dated September 8, 2014. The new regulation adds 24 persons to the EU “blacklist” previously established under Regulation No. 269/2014, dated March 17, 2014. All trading with the listed persons (or their subsidiaries or certain other affiliates) is banned.

See here

The above is intended to highlight the main features of the new sanctions and is not a comprehensive summary. The overall situation remains fluid, as governmental authorities continue to monitor the situation in Ukraine and consider further policy adjustments. We are following events closely and expect to provide future updates when appropriate.

Economic and Political Environment in Ukraine and Russia Resource Center >>