Briefing: New European Union (“EU”) sanctions package against Russia in response to the crisis in Ukraine | Denton


On 21 and 23 February 2022, the Council of the European Union (“Council”) approved the new fifth package of EU restrictive measures (sanctions) to be adopted in response to the decision of the Russian Federation to recognize the occupied areas of Donetsk. and Luhansk in Ukraine as independent states. These EU sanctions are binding on nationals of an EU Member State wherever located, legal persons incorporated in an EU Member State, all persons located in the EU; all persons in the course of commercial activities carried out wholly or partly within the EU, and to all persons on board aircraft and vessels under the jurisdiction of an EU Member State.

The fifth EU sanctions package officially adopted so far includes the following measures.

1. The EU named five people to its sanctions list against Ukraine on February 21, 2022. The five people are all members of the Russian Duma, elected to represent the Crimean peninsula and the city of Sevastopol on September 19 2021, as well as the head and deputy head of the Sevastopol electoral commission.

2. On the same day, it was announced that Germany would not provide the technical licenses required for the Nordstream 2 project to become operational.

3. On February 23, 2022, the EU adopted the following measures in response to the recognition of Donetsk and Lugansk regions as independent states:

• Additions to the EU Designated Persons List

The EU has added to its list of designated persons all 351 members of the Russian State Duma (the lower house of the Russian parliament) which voted in favor of President Putin’s call to recognize the independence of the self-proclaimed “republics” of Donetsk and Lugansk. The EU has also designated 27 people and entities, which allegedly contributed to undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, to its sanctions list. Among them are not only politicians or officials of the Russian Federation, but also three major Russian banks: Bank Rossiya, Promsvyazbank and VEB.

Being a “designated person” in the EU means that all funds and economic resources owned, held or controlled by a designated person are frozen. Accordingly, EU Persons are prohibited from making funds or economic resources available, directly or indirectly, to or for the benefit of Designated Persons or persons and entities owned or controlled by such Designated Persons.

• Restrictions on the ability of the Russian government and the Central Bank to access EU capital and financial markets and services

EU nationals are now prohibited from dealing in transferable securities and money market instruments issued after 9 March 2022 by:

(a) the Russian government,

(b) the Central Bank of Russia or

(c) any entity acting on behalf of the Central Bank of Russia.

No loans or credits may be made available to these entities after February 23, 2022.

• Restrictions on economic relations with non-government controlled areas of Donetsk and Lugansk regions

In addition to the above, the following specific prohibitions have been adopted with respect to non-government controlled areas of the Donetsk and Lugansk regions of Ukraine (the Restricted territories). These measures are substantially similar to those adopted for Crimea and Sevastopol, prohibiting:

a. Imports of goods originating from Restricted Territories into the EU and provision of finance related to such imports;

  • Contracts entered into before 23 February 2022 may be performed until 24 May 2022, and ancillary contracts necessary for such contracts may be performed if notification is given to the competent authority of the Member State at least ten working days from advance;
  • The import ban does not apply to goods with a certificate of origin under the EU-Ukraine Association Agreement;

b. Acquisition or extension of new real estate, or the financing thereof in the Reserved Territories;

vs. Acquisition or extension of ownership or control of entities in the Restricted Territories, including similar actions and acquisitions;

D. Grant loans or credits to any entity in the Restricted Territories;

e. Create joint ventures in the Restricted Territories or with any entity therein;

F. Provide investment services in relation to (a) – (e) above;

g. Sale or supply, as well as provision of technical or financial assistance relating to specified technology, in the fields of transport, telecommunications, energy and the prospecting, exploration and production of oil, gas and minerals;

  • Contracts concluded before February 23, 2022 may be executed until August 24, 2022, as well as ancillary contracts necessary for the execution of such a contract;

h. Provision of tourist services;

  • Contracts concluded before 23 February 2022 may be performed until 24 August 2022, as can ancillary contracts necessary for the performance of such a contract if they are notified to the competent authority of the Member State at least five working days in advance.

Following the publication of these sanctions, on 24 February 2022 the EU condemned Ukraine’s military aggression, with the High Representative issuing a statement on behalf of the European Union on the invasion of Ukraine by the Armed Forces of the Russian Federation. During her press conference, the President of the European Commission, President Ursula von der Leyen announced that new sanctions would be adopted. It is reported that these new sanctions will aim to limit the access of Russian financial institutions to EU financial markets and to freeze Russian assets in the EU.

Dentons will continue to monitor and report on these developments. .


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