Many exporters are unsure when they will be required to comply with the “No Russia Clause” and how exactly it should be designed. You too?
The EU adopted the 13th sanctions package against Russia on the second anniversary of the Russian attack on Ukraine.
We have received many exciting questions lately regarding the No Russia clause, particularly, “What should a No Russia clause look like?”
The so-called “No Russia Clause” will come into force on March 20, 2024. The legal basis for this is Article 12g of EU Regulation 833/2014.
What's in Article 12g?
Article 12g of Commission Regulation 833/2014 mandates EU exporters to include a "no re-export to Russia" clause in their contracts, specifically for sensitive goods such as aviation, jet fuel, firearms, and high priority items. This clause is legally required for certain goods, improving legal certainty and deterring non-EU operators from redirecting sanctioned EU goods to Russia. Exporters must ensure the clause contains adequate remedies and not sell their products to non-EU operators that are not ready to incorporate it. The obligation is verified and enforced by exporters' contracts, and existing contracts must include the clause by March 20, 2024.
To which contracts does the "no re-export to Russia" clause apply?
The clause prohibits the further export of certain goods to Russia, which must be included in sales contracts. To be more specific, the obligation to include a "no re-export to Russia" clause applies to contracts with non-EU operators based in any non-EU country, except partner countries listed in Annex VIII to Regulation 833/2014. Participation in activities aimed at circumventing sanctions law is prohibited. Operators should remain vigilant and report any sanctions violations or circumvention to their national competent authority or the EU whistle-blower tool. Adequate remedies, such as termination of the contract and penalty payments, should be included to determine non-EU operators from breaches.
Clarity sought
Many EU exporters are unsure when the clause is mandatory and how it should be drafted. Even with the countless sanctions against Russia, it is not a total embargo. Some goods can still be shipped to Russia, and not all product groups are affected by the “No Russia Clause.”
As a person responsible for exports, you must first ask whether your business activities and the goods you export are subject to the regulation. No fixed text applies to all exports of all possible products.
EU FAQ on No Russia Clause
The EU also recently published the FAQ “No-re-export to Russia” clause. We have uploaded it on our EU Sanctions Against Russia Guidance Circumvention Page.
Our Recommendation
The “No Russia Clause” interpretation is fundamentally expansive, and every case differs. This means that there is no universal solution here, and as an exporter, you have to be clear about what exactly you are exporting. Contact us to discuss your options, and let us assist you in drafting the relevant clauses using our legal templates. You are also welcome to check all current sanctions lists, embargoes, goods restrictions and more with our team of experts at Customs Manager Ltd.
Support service available to you right now:
Additional Support for our Export Control & Sanctions Community Members
You can watch our most recent webinar on EU and UK sanctions against Russia on the eve of the second anniversary of the Ukraine war. We also published a detailed article on all the sanctions imposed that you can see here. For all updates on Sanctions, see here. For all Russia-related updates, see here.
Select one of the plans to join our Export Control & Sanctions Community and remove the paywall.
Yorumlar