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Update on sanctions and trade restrictions against Russia

EU further expands existing sanctions regime

In the wake of the latest and brutal developments in the Russian military's invasion of Ukraine, the European Union has imposed further sanctions and trade restrictions. At the center is a ban on imports of coal and other solid fossil fuels.

Due to the latest escalation of the invasion by the Russian military in Ukraine, the European Union has reacted in a united way and imposed further sanctions against Russia.

1. Restrictions on goods

At the centre of the most recently adopted restrictions on goods are additional export and import bans. This includes a prohibition to purchase, import, or transfer, directly or indirectly, coal and other fossil fuels if these are listed in Annex XXII of Regulation (EU) 833/2014, and originate in or are exported from Russia (e. g. lignite, peat, coke, and more).

In addition, there is a ban on the direct or indirect purchase, import or transfer to the Union of goods listed in Annex XXI of Regulation (EU) 833/2014 that generate substantial revenues for Russia and thereby enable Russia's actions. These include lumber, cement, fertilizers, seafood, and spirits, provided they originate in or are exported from Russia

There are also prohibitions on the sale, supply, transfer or export of various products and technologies that may strengthen Russia's industrial capacity (e. g. chemicals, metal sheets, or pipes).

2. Restrictions on persons

In addition to restrictions on goods, the EU sanctioned a total of 216 natural persons and 17 legal entities. The latter include four important Russian banks, such as VTB Bank.

As a result of the listing, all assets within the EU are frozen. Furthermore, it is prohibited to provide funds or economic resources directly or indirectly to the listed persons.

3. Restrictions on the financial market

To further isolate Russia on the financial market, a number of targeted financial measures were adopted. In this regard, the ban on the export of banknotes and the sale of transferable securities was extended to include all official currencies of the EU Member States other than Euro. In terms of cryptocurrency, it was previously only prohibited to provide cryptocurrency to sanctioned parties. Now, services in relation to cryptocurrency are also prohibited if the total value of the crypto assets exceeds EUR 10,000.

4. Other restrictions

In addition to restrictions related to goods, persons and the financial market, certain natural persons and legal entities are excluded from participation in public tenders in the EU. Russian public bodies are also denied any financial support.

Further, Russian-flagged vessels are prohibited from accessing ports in the territory of the European Union. Finally, Russian and Belarusian logistics and transport companies are not allowed to transport goods on roads in the territory of the European Union, even for transit purposes.

5. What do companies have to consider now?

It remains essential for domestic companies to closely monitor current developments in international trade. This includes, in addition to the evaluation of possible lawful ways of payment, checking whether planned export and import projects are affected by trade restrictions and if exemptions apply. Furthermore, recipients of deliveries and payments should be checked against the relevant sanctions lists. The use of "Know Your Customer"-checks may also be advisable to prevent indirect provisions of funds and economic resources to sanctioned parties.

If you have any questions, please do not hesitate to contact your Deloitte Legal experts.

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