Tenth European Union sanctions package - new sanctions on Russia

On 26 February, the 10^th European Union sanctions package against Russia in connection with the ongoing military offensive against Ukraine entered into force. The following are the most important new sanctions that have an impact on companies. 

Commerce

• A ban was established on the transit through the Russian territory of dual goods originating in the European Union. Dual goods are goods that can be used directly for military purposes. In certain exceptional cases, such as where the transit of dual goods is necessary for humanitarian or medical purposes, this prohibition shall not be applicable. 
• A ban was established on the transit through Russian territory of firearms, their parts and essential components originating in the European Union.
   
• A ban was established on the export to Russia of various turbo engines and equipment for their maintenance. Contracts already concluded may be executed until 27 March 2023.
   
• A ban was established on imports from Russia of mineral waxes and bitumen products. Contracts already concluded may be executed until 27 May 2023.
   
• A ban was established on imports from Russia of carbon and rubber. Contracts already concluded may be executed until 30 June 2024. 
• A ban was established on the export from Russia of iron and flat-rolled non-alloy steel products. Contracts already concluded may be executed until 27 March 2023. However, the competent authorities of a Member State may continue to authorise the export of those products where it is established that the export is necessary for the production of titanium products for aviation purposes, where the supply of titanium products from elsewhere is not possible. 
• An exception was provided that Member States may authorise the sale of bakery stoves to Russia if it is established that this is necessary for private use by natural persons. 
• A ban was established on the provision of gas storage facilities to Russian citizens and companies with more than half of the board members being Russian citizens. Contracts already concluded may be executed until 27 March 2023. By way of derogation, options for storage of liquefied gas may continue to be offered to persons associated with Russia. 
• An export ban was established on the export of the products of 96 legal entities. The list mainly includes Iranian companies producing drones or components used in military activities for Russia.
   
• A ban was established on the export of various products to Russia. These products include, for example, various industrial goods, electronic goods, vehicles and their spare parts.   

Management of companies

• An exception was provided that transactions with companies in majority ownership of Russian citizens are permitted if the purpose of the transaction is to get rid of the involvement in the management of the company or its subsidiaries by 31 December 2023.
   
• As of 27 March 2023, Russian citizens and residents will not be allowed to be a part of the management board of companies registered in the European Union that own critical infrastructure or provide vital services. The prohibition does not apply to Russian citizens and residents who are simultaneously citizens of a Member State of the European Union.  

Financial sector

• Financial institutions and financial undertakings shall, by 13 March 2023, and every three months thereafter, provide the European Commission and the competent authority of the Member State with information on the operations relating to the management of the reserves and assets of the Central Bank of Russia. 

Sanctions concerning air traffic 

• Air carriers operating non-scheduled flights between Russia and the European Union directly or via a third country are required to forward information on flights to the competent authority of the Member State at least 48 hours before the start of the flight. A Member State may prohibit the operation of a flight by immediately notifying both the European Commission and the air carrier thereof. 

Other sanctions 

• The list of sanctioned persons has been updated with 87 persons and 34 legal entities. Among the sanctioned natural persons are mainly high-ranking Russian state officials who have influenced the decisions on the conduct of hostilities in Ukraine, officials working for the Russian regime in the Russian-occupied territories, persons involved in the management of the private military company Wagner, some journalists engaged in and contributing to the distribution of Russian propaganda, and Iranian citizens who help supply Russia with drones of Iranian origin. The sanctioned legal entities include mainly various Russian banks and funds that help fund Russian military activities in Ukraine. 
• From 10 April 2023, the ban on the distribution of RT Arabic and Sputnik Arabic in the European Union will apply.

The regulation establishing the new sanctions is available here.