Following the continued tensions in the Ukraine and Russia's suspected military involvement in destabilising the region, the European Union has imposed new sanctions against Russia.
The sanctions have been embodied in Council Decision 2014/512/CFSP and Council Regulation (EU) No 833/2014.
The sanctions came into force on 1 August 2014 and include:
- A military arms embargo on selling all military items to Russia, which includes Russian state entities, companies and citizens or any items for use in Russia. There are similar prohibitions on providing technical assistance, financing and financial assistance, and brokering services to Russia. There is also a ban on the purchase, import or transport of military goods from Russia.
- A similar prohibition on all items that fall under dual use, meaning any items that could be used in the preparation of military equipment or used to support military action cannot be sold to Russian entities or for use in Russia. However, any applications for an export licence for items intended for purely civilian use will be assessed on case by case basis.
- A requirement for an export licence for the export of certain energy-related equipment and technology to Russia (or any other country if such equipment or technology is for use in Russia). A licence will not be granted if there are reasonable grounds to determine that the export is for projects pertaining to deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia.
Despite the very serious and wide ranging sanctions, EU member states, including the UK, will be able to review contracts in place before 1 August 2014 and authorise their continued operation. Any company that currently has contracts for the sale of prohibited items to Russia hoping to gain approval must provide a copy of the relevant contract or agreement in support of their licence application. However, the existence of a relevant contract does not guarantee that a licence will be granted.
These embargoes follow the imposition of targeted financial sanctions, imposed in March 2014, prohibiting the movement of assets to and from entities considered to undermine and threaten the territorial integrity and sovereignty of Ukraine - this includes government agents, banks and other corporate bodies.
These sanctions are broad in scope and carry very severe penalties for companies and individuals who ignore them, including long terms of imprisonment for individuals who either act alone or help direct company decisions. If you have concerns about any international trading relationship or want a compliance review please contact the regulatory team at Shoosmiths who will be able to assist you.