Last Friday, the European Union adopted its sixth round of sanctions against Russia, including the highly anticipated ban on imports of Russian seaborne crude oil and petroleum products and the provision of related services, subject to certain exceptions.
The European Union’s latest package also expands its ban on the provision of SWIFT interbank messaging network services, expands the EU dual-use export ban, prohibits the broadcasting or advertising of content from certain Russian media outlets to the European Union, prohibits the provision of various consulting services to Russia, and expands EU asset freeze restrictions.
EU Energy Ban
The latest EU sanctions package prohibits those subject to EU jurisdiction from directly or indirectly purchasing, importing, or transferring listed crude oil or petroleum products originating in, or exported from, Russia, subject to the exceptions below. Notably, the EU ban currently does not apply to imports by pipeline of CN 2709 00 crude oil into Member States. The direct or indirect provision by EU persons of related services, such as insurance, technical assistance, brokering services, or financing or financial assistance, is also prohibited.
The list of products subject to the EU Energy Ban are set out in Annex XXV to Regulation (EU) No 833/2014, as amended. Specifically, the Annex describes the following two categories of energy products subject to the EU embargo, which are further defined by reference to the EU’s Combined Nomenclature (CN):
- CN Code 2709 00, Petroleum oils and oils obtained from bituminous minerals, crude; and
- CN Code 2710 00, Petroleum oils and oils obtained from bituminous minerals, other than crude; preparations not elsewhere specified or included, containing by weight 70 % or more of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations; waste oils.
EU Energy Ban Exceptions
The EU Energy Ban takes immediate effect, but features transitory periods for preexisting contracts and other exceptions. For contracts concluded before June 4, 2022, EU persons may continue conducting the following transactions, provided that the relevant Member State satisfies EU notification requirements:
- EU persons may continue conducting limited transactions for near-term delivery of energy products falling under CN 2709 00 until December 5, 2022; and
- EU persons may continue conducting limited transactions for near-term delivery of energy products falling under CN 2710 00 until February 5, 2023.
Temporary derogations allowing the importation of seaborne crude oil are also available to landlocked Member States whose supply of crude oil by pipeline is interrupted for reasons outside of the Member State’s control.
Nor does the ban apply to listed seaborne crude oil and energy products originating from third countries that are only being loaded in, departing from, or transiting through Russia, provided that the origin and owner of the products are non-Russian.
The EU measure contains specific derogations for the Czech Republic, Bulgaria, and Croatia.
The latest measures imposed a number of further restrictions.
First, the EU also imposed SWIFT-related restrictions on Sberbank, Credit Bank of Moscow, JSC Russian Agricultural Bank, and Belinvestbank (Belarusian Bank for Development and Reconstruction). Persons subject to EU jurisdiction shall be prohibited from providing specialized financial messaging services to Sberbank, Credit Bank of Moscow, and JSC Russian Agricultural Bank, and Belinvestbank, including to entities whose proprietary rights are directly or indirectly owned, 50 % or more, by the same.
Second, the EU expanded its dual-use ban to capture additional exports that may enhance Russia and Belarus’s military and technological capabilities. The measures include the addition of 80 chemicals to its list of goods subject to export requirements. Alongside the expanded list of goods and technology are significant additions to the list of Russia and Belarus entities subject to EU dual-use restrictions.
Third, the measure prohibits those subject to EU jurisdiction from advertising products or services in any content produced or broadcast by designated individuals or entities, including the following:
- Rossiya RTR / RTR Planeta;
- Rossiya 24 / Russia 24; and
- TV Centre International.
Fourth, similar to a recent move by the United States, the EU imposed a ban on the direct or indirect provision of various services, such as accounting, auditing, bookkeeping or tax consulting services, or business management consulting or public relations services to the Government of Russia or Russian entities. The service ban includes various exceptions to its prohibitions.
Fifth, the EU is now requiring that Member States impose appropriate criminal penalties for sanctions violations. Member States are also required to provide appropriate measures of confiscation of proceeds derived from EU regulation infringements.
Finally, the EU added 65 individuals and 18 entities to its asset-freeze. The designations focus on Russian military and defense targets, and proliferators of disinformation. As a reminder, all funds and economic resources belonging to, owned, held, or controlled by designated individuals or entities shall be frozen, and no funds or economic resources shall be made available, directly or indirectly, for the benefit of such individuals or entities.