The EU has previously announced that it intends to put in place a further package of Russian sanctions by 24 February 2023, to coincide with the one year anniversary of the invasion of Ukraine. In this briefing, we summarise the intended measures within that package and also provide a round-up of some other recent EU and UK developments.
EU
Tenth Russia sanctions package
President von der Leyen announced details of the proposed tenth package on 15 February, calling on Member States to agree and implement the package quickly. The key elements of the proposed package are as follows:
- Further export bans in relation to critical technology and industrial goods. These are said to include items such as electronics, specialised vehicles, machine parts, spare parts for trucks and jet engines, and goods for the construction sector such as antennas or cranes (on the basis that these are goods that may be diverted to Russia's military).
- Further restrictions on dual-use and advanced tech goods including electronic components that can be used in weapons systems, rare earth materials, and thermal cameras. The package will also include the addition of third country entities to the current restrictions on making dual use goods available to listed Russian entities. President von der Leyen's statement notes that seven Iranian entities will be added to the dual use regime, with the EU standing ready to list further Iranian and other third country entities providing sensitive technology to Russia.
- Additions to the designated persons list including propagandists and additional military and political commanders.
- The EU will "track oligarchs trying to hide or to sell their assets to escape sanctions" and set up an overview of all frozen assets of the Russian central bank held in the EU.
- The EU continues to work to tackle circumvention. Special Envoy David O'Sullivan is reaching out to third countries to ensure the strict implementation of sanctions and the prevention of circumvention, and the EU is organising a Sanctions Coordinators Forum with international partners and Member States to strengthen enforcement efforts.
Further details of the measures will be included in the relevant EU legislation, once adopted, In particular, it will be interesting to see how the proposed tracking of oligarchs and registration of frozen central bank assets are intended to operate in practice.
Implementation of oil price cap in relation to petroleum products
The second limb of the G7 oil price cap (the "OPC") came into force on 5 February 2023. As readers will be aware, the first limb of the OPC was introduced in December 2022 (see here for further information) and bans the provision of services related to the seaborne transportation of Russian origin crude oil products, unless purchased at or below the price cap level. The second limb of the OPC (which is now in force) relates to petroleum products.
The new price caps are: (i) $45 per barrel for products traded at a discount to crude oil; and (ii) $100 per barrel for products traded at a premium to crude oil.
The Commission has updated its OPC FAQs to reflect the coming into force of the petroleum element of the OPC, including information on how the price cap applies to different products, the 55 day wind-down period that applies in respect of Russian petroleum products transported at sea on 5 February 2023, and certain other additional clarifications on the operation of the OPC in the EU.
UK
Implementation of oil price cap in relation to petroleum products
As above, the petroleum element of the OPC also came into force in the UK on 5 February 2023.
The Office of Financial Sanctions Implementation ("OFSI") has updated its OPC guidance in respect of the coming into force of the new measures, introduced a new wind-down General Licence in respect of products purchased above the price cap and loaded prior to 5 February, and updated its existing OPC General Licence to reflect the new restrictions.
New cyber sanctions and guidance
In addition to its Russia-specific regime of sanctions imposed in response to the invasion of Ukraine, the UK also maintains a separate cyber sanctions regime, targeting those involved in cyberattacks. On 9 February, the Foreign Commonwealth & Development Office announced the addition of seven Russian nationals to the UK's cyber-related asset freeze list. The individuals are associated with the development of a range of ransomware strains which have targeted the UK and US. For further detail, please see our separate blogpost.
OFSI has recently published new Ransomware and Sanctions Guidance which sets out the recommended steps for organisations which are the victims of ransomware attacks and OFSI's enforcement approach in situations where a ransom payment is made to a sanctioned person. The guidance states that, if the recommended mitigating steps are taken, OFSI (and the National Crime Agency) would be more likely to resolve a breach case involving a ransomware payment through means other than a monetary penalty or criminal investigation which will be of some comfort to victims in these cases.
Although not Russia-related, readers may also wish to note that OFSI has also updated its Charity Sector Guidance to refer to the introduction of humanitarian exemptions from all UK regimes which derive from UN sanctions (via the Sanctions (Humanitarian Exception) (Amendment) Regulations 2023). OFSI has also introduced two Syria-related General Licences to facilitate humanitarian relief efforts in Syria following the recent earthquake. General Licence INT/2023/2711256 has been issued by OFSI in respect of the Syria asset freeze and the Department for International Trade (the "DIT") has issued a general trade licence relating to Syria.
Call for evidence on trade sanctions
The UK Parliament International Trade Committee has launched a call for evidence in relation to UK trade sanctions on Russia, focusing on: (i) the role of the DIT; (ii) the impact of Russia trade sanctions on UK businesses, supply chains and consumers; and (iii) the effectiveness of the government's support, guidance, international cooperation and trade policy in mitigating the impact of those sanctions.
Any parties wishing to submit written evidence should do so by 12pm on 17 March 2023.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
