EU Issues Sweeping New Russia Sanctions, Export Control Package
The EU this week announced a new wide-ranging package of Russia sanctions, including designations of more than 140 people and companies as well as new import restrictions on Russian raw materials used to produce certain metals and new export controls on dual-use technology and industrial goods. The package also includes new restrictions on exports of industrial-related services, a broader ban on Russian energy products, a “tighter obligation” for member states to trace assets of sanctioned parties, new anti-sanctions circumvention measures and more.
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The measures, previewed by the EU in November (see 2311200056), include a host of new restrictions aimed at depleting Russia’s sources of revenue that help fund its war against Ukraine, the European Commission and European Council said. Among the new restrictions is a new import ban on raw materials from Russia that are used to produce steel, certain processed aluminum and copper. The import ban on some of those goods will take effect after either a one-year or two-year transitional period.
The EU also introduced a measure to better track sales of tankers to third countries to prevent those ships from being used in so-called shadow fleets that illegally transport Russian oil (see 2310240068). All tanker sales involving EU operators will need to be notified to a national government, the EU said in a guidance document on the new measures, and all sales to Russian people and entities will need an EU approval. “This will help us gather more information on the ‘shadow fleet' currently used by Russia to circumvent the price cap, improve our monitoring of these vessels and bring more transparency to this market,” the bloc said.
Member states will also be required to share information with each other and the commission to help identify ships conducting illegal ship-to-ship transfers, hiding the origin of their cargo or participating in other “deceptive practices” that may signal the boat is evading the Group of 7 price cap on Russian oil. The EU also will extend its import restrictions on Russian energy to cover certain liquefied petroleum gases, which will take effect after a one-year transition period and which will represent about 6% of the EU's total LPG intake from Russia this past year.
The EU noted that it didn’t implement a full ban on imports of Russian liquefied natural gas, saying that ban would have had a “limited” impact because Russia would have been able to redirect most of its LNG exports to Asia. It also said Russia would have benefited from rising global gas prices following a new EU embargo.
Other measures look to target Russia-related sanctions evasion risks, including a new requirement for EU operators to “contractually prohibit the re-export” of certain sensitive goods to Russia, including those related to aviation, jet fuel, firearms and more. The bloc also broadened the scope of goods that are blocked from being allowed to “transit through Russia" and said it will require member states to designate authorities in charge of identifying and tracing the assets of sanctioned persons and companies.
The EU also put in place a new import ban on Russian diamonds and sanctioned 61 people and 86 entities, including parties with ties to Russia’s military and government, its finance sector and its information technology sector. New export controls will apply to certain chemicals, thermostats, motors -- including servomotors for unmanned drones -- machine tools, machinery parts, construction-related goods, design-related software services and more.