Today, the European Union imposed another round of significant sanctions and trade controls on Russia in response to the crisis in Ukraine. In addition to new asset freeze sanctions, the EU implemented a series of new trade restrictions on dealings with the Russian economy, including an import ban on Russian iron and steel products, a ban on exports of luxury items to Russia, and a ban on new investment in the Russian energy sector. The EU also banned the provision of credit rating services to Russia.
Import Ban on Iron and Steel Products
The latest EU measure imposes broad restrictions on dealings in Russian-origin iron and steel products. The measures prohibit the following activities:
- Direct or indirect imports of listed iron and steel products that originate in Russia or have been exported from Russia;
- Direct or indirect purchases of listed iron or steel products that are located in or which originated in Russia;
- Transporting listed iron and steel products originating in or being exported from Russia to any other country; and
- Related technical assistance, brokering services, financing or financial assistance, and insurance and re-insurance.
The list of covered items are included in Annex XVII to the new regulation, and cover a number of categories of steel and iron products, including: Non Alloy and Other Alloy Hot Rolled Sheets and Strips; Non Alloy and Other Alloy Cold Rolled Sheets; Electrical Sheets (other than GOES); Metallic Coated Sheets; Organic Coated Sheets; Tin Mill Products; Non Alloy and Other Alloy Quarto Plates; Stainless Hot Rolled Sheets and Strips; Stainless Cold Rolled Sheets and Strips; Stainless Hot Rolled Quarto Plates; Non Alloy and Other Alloy Merchant Bars and Light Sections; Rebars; Stainless Bars and Light Sections; Stainless Wire Rod; Non Alloy and Other Alloy Wire Rod; Angles, Shapes and Sections of Iron or Non Alloy Steel; Sheet Piling; Railway Material; Other tubes, pipes; Hollow sections; Seamless Stainless Tubes and Pipes; Other Seamless Tubes; Large welded tubes; Other Welded Pipes; Non-alloy and other alloy cold finished bars; and Non Alloy Wire.
Luxury Good Export Ban
Like a recent measure imposed by the United States, today’s EU measure bans the sale, supply, transfer, or export, directly or indirectly, of listed luxury goods valued at more than EUR 300 to persons in Russia or for end use in Russia.
Covered by the ban are an array of luxury and other items, including:
- Caviar and caviar substances
- Cigars and cigarillos
- Perfumes, toilet waters, cosmetics
- Leather, saddlery and travel goods, handbags
- Coats or other garments, accessories and shoes
- Carpets, rugs and tapestries
- Pearls, precious and semi-precious stones, articles of pearls, jewelry, gold- or silversmith articles
- Coins and banknotes (not legal tender)
- Cutlery of precious metal or plated or clad with precious metal
- Vehicles; and
- Works of art, among others
Ban on Investments in Russian Energy
The EU also joined the United States in banning new investments in Russia’s energy sector. Subject to exceptions, the EU investment ban generally prohibits the following investment activities:
- The acquisition of any new, or extension of any existing, participation in Russian or third country entities operating in the Russian energy sector;
- Granting or taking part in any arrangement to grant any new loan or credit or otherwise provide financing for Russian or third country entities operating in the Russian energy sector;
- Creating new joint ventures with such entities; and
- Providing investment services directly related to the above activities.
Asset Freeze Sanctions & SOE Restrictions
Finally, the EU imposed asset freeze sanctions today on 24 Russian individuals and entities, including oligarchs, elites, and companies supporting Russian military capabilities and operations in Ukraine. The new measures also prohibit dealings with listed entities that are owned or affiliated with the Russian government, including entities established outside the EU whose proprietary rights are directly or indirectly owned for more than 50 percent by a listed entity.