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EU Sanctions Against Russia: 12th Package

The 12th round of sanctions against Russia has been adopted by the EU. It applies since 1 January 2024. This package aims to address loopholes, fight sanctions circumvention, and impose more import and export limitations on Russia.


Executive Overview

This package contains new import and export prohibitions (e.g., prohibiting the shipment of Russian diamonds to Europe) and further lists of Russian persons and corporations. Additionally, the package makes it more difficult to evade the oil price restriction by carefully monitoring how ships are utilised. It also entails tougher penalties for foreign corporations that evade sanctions and more stringent requirements for asset tracing.



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Full Guide of the EU Sanctions Against Russia

Background

The European Union is fully committed to supporting Ukraine's economy, society, military forces, and rebuilding efforts in the future. The EU's response to Russia's unwarranted military aggression against Ukraine is centred on sanctions, which weaken Russia's military and technological prowess, cut off the nation from the most advanced international markets, deny the Kremlin the money it needs to finance the conflict, and put increasing pressure on Russia's economy.


Are Sanctions Against Russia Effective?

Sanctions help the EU achieve its main goal, which is to keep pushing for a fair and durable peace rather than simply another unsolved war. Over time, as the sanctions weaken Russia's economic and technological basis, their impacts intensify. Additionally, the EU keeps making sure that the sanctions do not affect Russia's exports of energy and agrifood to other nations.


These are the main components of the 12th package:


I Listings of Individuals, Organisations and Entities

More than 140 more people and organisations had their assets frozen. This includes both private military enterprises and those involved in the military and defence industries in Russia. This encompasses not just key economic players but also participants from the IT industry. The actions also go after the people behind the recent illegitimate "elections" in the areas of Ukraine that Russia has temporarily seized, the people behind the forced "re-education" of Ukrainian children, and the propagandists and disseminators of false information who back Russia's aggressive actions against Ukraine.


29 Russian and non-Russian companies—including those registered in Singapore and Uzbekistan—have been added to the list of entities connected to Russia's military-industrial complex.


EU Sanctions Update: Russia Individuals & Entities Listed: Stay updated on the EU's sanctions against Russia with our blog post. Discover the constantly updated list of individuals and entities affected. https://www.customsmanager.info/post/eu-sanctions-against-russia-list-of-individuals-entities-updated


II Import and Export Restrictions

  • Russian diamond import prohibition: limits on the importation of non-industrial diamonds that are extracted, processed, or manufactured in Russia. The planned restrictions are a part of a global G7 diamond embargo that aims to deny Russia access to this significant source of income, which is estimated to be worth €4 billion annually. By January 1st, 2024, at the latest, all G7 nations will impose a direct ban on diamond exports from Russia. A prohibition on Russian diamonds polished in a third nation will go into force on March 1, 2024, and it will be extended to lab-grown diamonds, jewellery, and watches with diamonds on September 1, 2024. The G7 will develop a strong verification and certification framework for rough diamonds based on traceability to enhance the efficacy of these measures.

  • New restrictions on the import of certain metal items from Russia include a prohibition on raw materials for the manufacturing of steel, processed aluminium products, and other metal goods.

  • Additional export limitations apply to industrial and dual-use commodities valued at €2.3 billion annually, as well as innovative technology products. More specifically:

  • In an effort to further undermine Russia's military capabilities, new export restrictions have been placed on dual-use and sophisticated technology products, such as chemicals, thermostats, DC motors, servomotors for unmanned aerial vehicles (UAVs), machine tools, and machinery components.

  • New export restrictions on EU industrial items, such as batteries, equipment and components, construction-related commodities, processed steel, copper and aluminium goods, lasers, and batteries, are intended to further impair Russia's industrial capabilities.

  • Software relating to design and business cannot be supplied to Russian firms or the Russian government. The intention is to further impair Russia's manufacturing sector capabilities. We have collaborated closely with our overseas partners, such as the US and the UK, on service restrictions.


EU Sanctions Update: Import and Export Prohibitions To exert pressure on the Russian economy, the sanctions are designed to limit trade activities and financial transactions between the EU, Russia and across specific industries. Discover all the economic sanctions imposed https://www.customsmanager.info/post/eu-steel-iron-import-sanctions-against-russia

III. New listing criterion

The EU decided to include those who gain from the coerced handover of ownership or control of EU firms' Russian subsidiaries to the list of those eligible for listing. By doing this, it will be made sure that no one gains from the losses incurred by EU businesses when their subsidiaries are taken over by Russian owners or management against their will.

  • It is now possible to maintain dead individuals on the asset freeze list to guard against any possible undermining of the freezing mechanism.

  • There are stricter requirements on Member States to aggressively track down the assets of individuals on the list to stop and identify instances of sanction violations or evasion.


IV. Energy

Oil price limit: We have tightened the international G7+ oil price cap by enacting additional procedures to monitor tanker sales to third nations more carefully and requiring more thorough attestation requirements. This is intended to make it more difficult for Russia to continue the conflict. This will assist in combating Russia's "shadow fleet," which it uses to get around the price restriction. To guarantee that our actions and future direction are in line, the EU is having frequent discussions with its G7 allies in this regard.


Liquified petroleum gas (LPG) imports are now prohibited, with a potential effect on yearly imports exceeding €1 billion. Current contracts will be grandfathered in for a maximum of 12 months.


V. Update to Circumvention Measures


Unusual, rising trade numbers for certain goods/countries provide concrete proof that Russia is actively trying to get around the sanctions. This means that we need to urge our neighbours for even tighter collaboration and step up our efforts to combat circumvention. The first concrete outcomes are readily apparent. Certain nations are implementing systems to keep an eye on, regulate, and prohibit re-exports. We have also decided, in collaboration with like-minded partners, on a list of Common High Priority sanctioned items to which companies must exercise extra caution and which foreign nations are prohibited from re-exporting to Russia.


 Furthermore, a list of commodities that are sanctioned inside the EU and deemed economically vital has been compiled, alerting enterprises and third nations to the importance of these goods.



Moreover, Operators are required by contract to prohibit the re-export of certain sensitive commodities categories to Russia, including as items connected to aviation, jet fuel, weapons, and items on the Common High Priority list.


There is also an introduction of a new law requiring notice of specific transfers of money out of the EU by EU firms that are controlled by Russians or entities based in Russia to the extent that the transfer is more than 40%.


Guidance on Circumvention against Russia: The EU has provided instructions for EU businesses, advising them to use more caution to prevent Russian sanctions evasion. Download it here. https://www.customsmanager.info/post/eu-sanctions-against-russia-guidance-on-circumvention

VI. Other Measures

  • Creation of a new exception to permit situations in which Member States choose to deny money or other resources to a listed individual in the public interest.

  • Introducing a derogation to permit payment of damages by an insurance business that has just gone public.

  • Creation of a derogation that would permit the sale of EU businesses controlled by certain designated people or organisations.

  • adding a technological modification that permits the supply of pilot services required for marine security.


VII. Frequently Asked Questions on Sanctions Against Russia and Belarus


The European Commission has published over 500 FAQs to assist stakeholders in applying the sanctions packages.General guidelines - Consolidated version of the FAQs on sanctions against Russia and Belarus


More information and links


Full Sanctions Collection

For all the latest sanctions updates from the U.S., the EU and the UK, see our collection here:


Full Guide To EU Russia Sanctions




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