EU Offers Guidance for New ‘No-Russia’ Clause Requirement for Exporters
The European Commission recently issued updated guidance for a requirement that will soon force EU exporters to insert clauses in their contracts that bar reexports of certain sensitive goods to Russia. The document offers guidance on how EU companies should comply with the “no reexport to Russia” clause, how it impacts contracts already in place, how the EU plans to enforce the requirement, what the clause’s wording should include, and more.
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The bloc said EU exporters shouldn’t sell to third-country parties that don’t agree to the contract clause, which was introduced by the EU's December sanctions package against Russia (see 2312180070). It also stressed the clause applies only to “specific types of sensitive goods,” including items related to aviation, jet fuel, firearms, and the list of common high-priority items maintained by the U.S., the EU and others.
The clause requirement also doesn’t apply to exports to certain “partner countries,” including the U.S., the U.K., Japan and South Korea. Still, EU exporters should be “vigilant of any attempts by third parties to draw them into circumvention schemes” regardless of which country they’re based in, the guidance said.
Contracts that were concluded before the effective date of the requirement on Dec. 19 must either include the clause after a one-year transition period or when the contract expires -- whichever comes first. Contracts concluded on or after Dec. 19 must include the clause in their contract by March 20.
The EU said exporters will be required to “prove” that they have the clause in place “if requested by their competent authorities,” and they also must inform their government “as soon as they become aware of a breach or circumvention” of the clause. The exporters also must have “adequate remedies” in place in case their customer violates the clause, which may include terminating the contract “and the payment of a penalty." These remedies “should be reasonably strong and aim to deter non-EU operators from any breaches,” the EU said.
The guidance includes a template clause that exporters can use in their contracts. Regardless of the clause’s wording, the EU said it should be “identified as an essential element of the contract.”