I. INTRODUCTION
On 23 June 2023, the European Union (“EU”) published its new package of sanctions targeting Russia in the wake of the conflict in Ukraine. This new package brings the total number of restrictive measures adopted by the EU since the beginning of the conflict to eleven.
It focuses on combating the evasion or circumvention of EU bans on the export of dual-use goods, advanced technologies, and critical components to Russia.
In this regard, we find a range of restrictive measures relating to different sectors such as trade, transport, and energy. These include, among others, restrictions on the sale of sanctioned goods and technology to third countries if these third countries resell such goods or technology to Russia, or a ban on the transit through Russia of certain sensitive goods, such as advanced technology or aviation-related material, exported from the EU to third countries.
The inclusion of new natural and legal persons on the list of designated persons of the European Union and several other measures of a different nature are also envisaged in this new package.
The Decisions and Regulations adopted by the EU in these new sanctions package are detailed below.
1. COUNCIL DECISION (CFSP) 2023/1217 of 23 June 2023 amending Decision 2014/512/CFSP concerning restrictive measures motivated by actions of Russia destabilising the situation in Ukraine and its COUNCIL REGULATION (EU) 2023/1214 of 23 June 2023 amending Regulation (EU) No 833/2014 concerning restrictive measures motivated by actions of Russia destabilising the situation in Ukraine.
As indicated above, the EU aims to minimise the risk of circumvention of the restrictive measures by firstly prohibiting the transit through Russian territory of goods and technology that could contribute to Russia’s military and technological improvement, to the development of its defence and security sector, and to the aviation and space industry.
It is also important to note that the EU introduces a restriction on the sale, supply, transfer or export of sensitive dual-use items and technology that can enhance Russian military, technological or industrial capabilities whose export to Russia is prohibited under Decision 2014/512/CFSP and Regulation (EU) No 833/2014 to third countries for which it has been demonstrated that there is a continuing and particularly high risk that their territory will be used for circumvention.
With regard to the inclusion of natural persons, legal entities, entities and bodies to the list of sanctioned persons, the grounds for inclusion are extended to the following: facilitating violations of the prohibition of circumvention of the provisions of the Regulations on sanctions imposed on Russia or otherwise significantly circumvent such provisions.
Diplomatic cooperation and technical assistance to third countries to prevent circumvention of restrictive measures is also strengthened.
On the other hand, as regards import and export controls and restrictions, the list of items that contribute to Russia’s military and technological improvement is expanded to include electronic components, semiconductor materials, manufacturing equipment and firearms, among others, and new export restrictions are imposed on products that could contribute, in particular, to the improvement of Russia’s industrial capabilities.
A prohibition on the sale, licensing or transfer of intellectual property rights or trade secrets related to prohibited products and technology to Russia is also included in this Decision and in the Regulation.
As regards transport, the measures include the extension of the ban on the transport of goods by road in the Union by Russian-registered trailers and semi-trailers and the prohibition of access to Union ports and locks for vessels illegally disconnecting, disabling, or interfering with their automatic identification systems (AIS). However, exemptions are provided for to allow such vessels access to ports and locks in the territory of the Union in the interest of maritime safety.
In the energy sector, this new package includes a ban on access to EU ports and locks for vessels violating import restrictions on Russian crude oil and petroleum products and specifies that Member States must take measures to obtain alternative supplies of crude oil and limit imports of Russian oil by pipeline. The EU also provides for exemptions for certain essential projects and critical energy supplies that are not banned.
In this regard, the EU through this Decision and Regulation indicates that the temporary derogation granted to Germany and Poland in relation to the supply of crude oil by pipeline from Russia through the northern section of the Druzhba pipeline should be terminated.
Strict and specific exemptions are also foreseen to allow the maintenance of the Caspian Pipeline Consortium (CPC), pipeline that transports Kazakh oil to the EU via Russia and the extension until 31 March 2024 of the exemption to the Sakhalin oil price cap for Japan.
In the financial field, in order to try to avoid circumvention of the prohibition on providing transferable securities to persons in Russia, the prohibition is extended to financial instruments in any currency.
87 new entities are added to the list of legal persons, entities, and bodies in Annex IV to Decision 2014/512/CFSP directly supporting the Russian military-industrial complex, to which tighter restrictions are imposed on the export of dual-use items and technology, as well as items and technology that could contribute to the technological upgrading of Russia’s defence and security sector.
Regarding broadcasting activities, actions by Russian media in or directed at the EU are suspended in order to stop Russian propaganda. The Council thus extends the suspension of broadcasting licences to a further five media outlets [1] .
These measures include the introduction of exemptions from the ban on the provision of certain services to Russian entities related to the creation of firewalls.
The Decision provides for an extension of the deadline for a temporary derogation to allow the provision of legal advisory services to facilitate the divestment of Russian operators in the EU market.
Finally, the Decision stresses the need to improve the exchange of information on export restrictions on sensitive goods used in the conflict and to extend the list of partner countries with equivalent export control measures and to clarify the provisions related to the exchange of information between authorities.
2. COUNCIL DECISION (CFSP) 2023/1218 of 23 June 2023 amending Decision 2014/145/CFSP concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine and its COUNCIL REGULATION (EU) 2023/1215 of 23 June 2023 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.
The Decision provides for exemptions from the asset freeze and the prohibition on making funds and economic resources available to certain entities on the sanctioned list, in order to allow for divestment from Russian companies and the sale of certain securities deposited with specified entities on the list.
In addition, an exception has been made to allow for the implementation, certification, or assessment of a firewall to remove a listed person’s control over the assets of a non-listed entity that it owns or controls. This ensures that the designated person does not derive any benefit while allowing the entity to continue its business activities.
In terms of maritime safety, the Decision provides for a derogation from the asset freeze and a prohibition on the release of funds and economic resources in order to facilitate the provision of pilotage services in certain circumstances.
3. COUNCIL IMPLEMENTING REGULATION (EU) 2023/1216 of 23 June 2023 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.
By this Regulation the EU adds 71 persons and 33 entities responsible for actions that are alleged to undermine or threaten the territorial integrity, sovereignty and independence of Ukraine to the list of persons, entities, or bodies subject to restrictive measures.
II. CONCLUSION
The new package strengthens the set of tools available to prevent circumvention by companies and third countries supporting Russia in its claims.
Specifically, through this new package, measures restricting the sale or export of sensitive dual-use items and technology to third countries that could then transfer them to Russia are specifically allowed. With the new rules, the EU would be able to exert much more pressure than before to put an end to this circumvention practice.
However, because EU member states were concerned that these measures could complicate the EU’s relations with the rest of the world, the European Commission has stated that sanctions against third countries will only be imposed as a last resort.
[1] RT Balkan, Oriental Review, Tsargrad, New Eastern Outlook and Katehon.
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In Madrid, on June 28, 2023
International Trade and Sanctions Department
