- EU Strengthens Economic Sanctions Against Russia
- September 24, 2014 | Authors: Curtis M. Dombek; Neil Ray
- Law Firms: Sheppard, Mullin, Richter & Hampton LLP - Los Angeles Office ; Sheppard, Mullin, Richter & Hampton LLP - San Francisco Office
The European Union (EU) put into effect on Friday (September 12, 2014) a new round of economic sanctions against Russia over its role in Ukraine. The new measures include further restrictions on (i) dual-use goods and technology to specified entities; (ii) the provision of services in relation to projects regarding deep water oil exploration and production, arctic oil exploration and production, or shale oil projects in Russia; (iii) services related to goods and technology listed in the EU’s Common Military List (CML); and, (iv) access to capital markets. They also introduce a new prohibition on certain types of loans and credit to specific Russian entities. Finally, 24 individuals (but not entities) have been added to the EU’s list of those subject to a travel ban and an asset freeze. A brief summary of the main changes implemented by Council Regulation No. 960/2014 (amending Council Regulation 833/2014) follows below.
Exports of Dual-Use Goods and Technology: The ban on exporting dual-use goods and technology for military use in Russia has been extended to also include a list of nine mixed defense companies. There is also a prohibition on the provision of related services (technical assistance, brokering, financial assistance, etc.) in connection with the dual-use items to the same listed entities.
Oil Exploration and Production Restrictions: There is a much wider prohibition in the direct or indirect provision of services associated with deep water oil exploration and production, arctic oil exploration and production, or shale oil projects in Russia including drilling, well testing, logging, and the supply of floating vessels.
CML Services: There is a prohibition on the provision of insurance and reinsurance services for the sale, supply, transfer or export of goods and technology listed in the CML.
Access to Capital Markets: EU nationals and companies can no longer provide loans to five major Russian state-owned banks. Also, trade in new bonds, equity or similar financial instruments with a maturity exceeding 30 days, issued by the same banks, has been prohibited. The same restrictions have been extended to three major Russian defense companies and three major energy companies. Providing services related to the issuing of the above financial instruments, e.g. brokering, is also included in the new prohibition.
Additional Individual Designations: Finally, 24 individuals have been added to the EU’s designated party list bringing the total number of individuals subject to sanctions to 119; the number of designated entities remains 23. In addition, the legal basis has been widened to allow imposing asset freezes and travel bans on person or entities conducting transactions with separatist groups in the Dombass region.
The EU is monitoring the implementation of the current ceasefire in Ukraine and stated that it may roll-back certain sanctions depending on the developments on the ground.