New EU sanctions on Russia now in force

On 21 July 2022, the European Union imposed new sanctions on Russia in response to its invasion of Ukraine. The new sanctions include a ban on imports of Russian gold. The new sanctions extend and specify previously imposed sanctions and include new provisions on their implementation.

The new decisions also aim to align the sanctions with decisions made by key partners and clarify practices concerning for example national licensing authorities. A further aim is to make it more difficult to circumvent sanctions and to underline that sanctions imposed by the EU are not the reason for the global energy and food crisis.

Sector-specific economic sanctions were expanded by imposing a ban on import, purchase and transfer of Russian gold. Gold is Russia’s second-largest export after energy. The new sanctions also expanded the list of controlled items, which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector. This expansion brings the list closer to the corresponding lists of key partner countries.

In the transport sector, the closure of ports in European Union Member States to vessels registered under the Russian flag was extended to include locks in order to ensure full implementation of the restrictive measures and avoid circumvention.

In the financial sector, the deposit ban was expanded to include a prohibition on accepting deposits to include those from legal persons, entities or bodies established in third countries and majority-owned by Russian nationals or natural persons residing in Russia, to prevent circumvention.

The exemption from the prohibition to engage in transactions with certain State‑owned entities as regards transactions for agricultural products and the supply of oil and petroleum products to third countries has been extended. The aim of this extension is to emphasise the EU’s commitment to global food and energy security and to prevent the potential negative effects of the EU sanctions.

It was necessary to clarify that, the Union is committed to avoiding all measures which might lead to food insecurity around the globe. Consequently, none of the sanctions or any of those adopted earlier in view of Russia’s actions destabilising the situation in Ukraine target in any way the trade in agricultural and food products, between third countries and Russia. Moreover, the sanctions imposed by the EU do not prevent third countries and their nationals operating outside of the Union from purchasing pharmaceutical or medical products from Russia.

The new sanctions regulations extend the list of individuals and entities subject to sanctions. These sanctions include asset freezes and travel and transit restrictions.  The persons now added to the sanctions list are politicians and authorities at the federal and regional levels in Russia, representatives of the Russian armed forces, the national guard and the security service FSB, leaders of Russian-occupied regions and illegally annexed Crimea, opinion leaders in Russian society, business leaders supporting or benefiting from the Russian government, and leaders of organisations disseminating Russian propaganda. The new entities on the list are organisations and agencies that have participated in Russia’s information influence activities and companies that have supported Russia’s armed forces or participated in the stealing of grain from Ukraine. In addition, the list of sanctioned financial institutions now includes Sberbank.

The newly adopted sanctions specify and expand the capacity of the authorities of Member States to grant authorisation to surrender frozen funds to a listed person or entity. The exemptions concern situations where surrendering the funds could prevent serious effects on human health and safety or the environment or where the funds could be used to make payments to acquire agricultural products and foodstuffs.

The sanctions package includes new obligations to provide information to ensure the enforcement of sanctions. All natural and legal persons and other actors are obliged to provide information that can be used to promote compliance with sanctions imposed by the EU. Within a six-week transition period, those subject to sanctions are obliged to report any property or assets in the EU area in their possession and to cooperate with the competent authorities with regard to verifying the notifications. Conscious and intentional circumvention of sanctions and violation of the obligation to provide information are prohibited.