Questions and answers on the 11th package of restrictive measures against Russia - Hoofdinhoud
Listings
Who have you targeted?
71 individuals and 33 entities have been added to the list of natural and legal persons subject to asset freezes and the prohibition to make funds and economic resources available to them. Altogether, EU restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine now apply to close to 1800 individuals and entities.
What entities have been targeted and in which countries? Are more banks included?
The list of newly designated legal persons includes mostly Russian entities.
The grounds for listing include circumvention of EU sanctions, support to actions undermining and threatening the territorial integrity, sovereignty, and independence of Ukraine. This includes Russian IT companies providing critical technology and software to Russian intelligence, as well as two banks.
Import and export restrictions
What new export restrictions have been introduced?
A total of 87 new entities were added to the list of those directly supporting Russia's military and industrial complex in its war of aggression against Ukraine. They are subject to tighter export restrictions for dual-use and advanced technology items. In addition to the Russian and Iranian entities already listed, for the first time this measure also covers entities registered in other jurisdictions, i.e. Armenia, Hong Kong, Syria, the United Arab Emirates and Uzbekistan. and.
We have extended the ban on firearms and other arms.
There is a restriction on the exports of 15 technology items found on the battlefield in Ukraine or equipment needed to produce such items.
The restriction of exports of certain industrial goods that reinforce Russia's industrial base is tightened and simplified by merging different parts of the existing export bans and applying other parts at a higher level (moving from 6 to 4-digit custom codes), which makes it easier for customs officials to check compliance.
How have you amended the transit ban?
Until this latest package, the transit ban covered dual-use goods and firearms. The 11th package extends the transit ban to advanced technology products, aviation goods as well as jet fuel and fuel additives. This covers all transit of such goods through Russia, regardless of the final destination. The aim is to ensure that no sensitive goods “fall off a truck” while crossing Russia.
What have you done on iron and steel?
To implement the agreed measure on steel (8th package, ban effective as of 30 September 2023), there is now an obligation on importers to provide proof that the iron and steel products imported to the EU from third countries do not incorporate banned steel inputs from Russia.
What other trade-related measures are included in this package?
The existing ban on export of luxury cars henceforth becomes a full ban on exports of all new and second-hand cars with an engine size above 1.900 cm³.
There is now also a full ban on certain other luxury goods, such as yachts.
Certain new types of machinery are now placed under export bans.
Anti-circumvention measures
Are EU sanctions being circumvented? What have you seen so far?
The sanctions are working and creating significant pressure on their targets. That's why we see that Russia, and sanctioned Russian persons, are going out of their way to try to circumvent them in order to obtain sanctioned goods..
To ensure the full effectiveness of our sanctions, we need to curtail this practice.
On the one hand, this means stronger enforcement at EU level and making sure that EU operators do not circumvent sanctions.. On the other hand, this means keeping a close eye on foreign operators that are re-exporting EU sanctioned goods, without the knowledge of the EU exporter. For that scenario, we have sought the support of third countries' authorities, to make sure that goods exported from the EU to those countries do not reach Russia.
Why are you proposing a new anti-circumvention tool?
Sanctions are increasingly circumvented through the jurisdictions of third countries. We are working and cooperating with them and have noted the efforts of many of these countries to stave off the re-exporting of sanctioned EU goods. In some cases, however, these efforts may prove to be insufficient, or there may simply not be any willingness to make them. If nothing else works, then the only remaining option is to stop exporting to those third countries the very specific goods we are most concerned about.
This does not mean the EU is imposing sanctions against third countries or their governments. We are simply trying to make sure that sanctioned EU goods do not end up in Russia. We continue to count on the cooperation of third countries and will continue providing guidance and technical assistance on the scope of EU sanctions.
How would it work in practice?
The instrument would focus on specific high-risk goods that are proven to reach Russia via third countries, despite being covered by EU sanctions. The instrument equips the EU to prohibit the export of these goods to the countries which are used to circumvent our sanctions, and also to prohibit the provision of associated services.
The list of goods and technology subject to this measure would only be populated if no other solution could be found. This means close engagement and dialogue with each of the third countries concerned. We will always give authorities an opportunity to react to the EU's findings and conclusions. So this is a measure of last resort.
As for the goods and technologies concerned, the focus would be on particularly sensitive ones - of the kind that directly allows Russia to pursue its military aggression against Ukraine and its ability to wage war. This would be for example dual-use goods and technology or goods that could enhance Russia's military, technological and industrial capacities.
With today's changes, is it now easier to sanction an individual or entity from a third country involved in the circumvention of sanctions? Does this not amount to the extra-territorial effect of EU sanctions?
EU sanctions do not apply extra-territorially. This is a principle we have long stood by and will continue to stand by.
We are not asking operators who are outside EU jurisdiction to comply with our sanctions.
However, when foreign operators partake in the circumvention of EU sanctions, for instance by re-exporting sanctioned EU goods to Russia, this can be of such nature as to undermine the objectives of EU sanctions. This can then result in CFSP measures taken against them, such as a listing activating financial sanctions and, for natural persons, also a travel ban.
What are you doing in the maritime sector?
We want to counter the increase of deceptive practices by vessels transporting Russian crude oil and petroleum products which aim to hide the origin of the oil and circumvent our import ban and price cap on the transport and services to third countries. These practices, which include ship-to-ship transfers of oil and petroleum products, also create environmental risks near our coasts.
We are therefore introducing a prohibition to access EU ports for vessels which are transporting Russian oil and have conducted ship-to-ship transfers or turned off their AIS navigation systems during the voyage to a Member State, giving reasons to suspect a breach of our restrictions. We are also prohibiting access to EU ports if a vessel does not notify the competent authority at least 48 hours in advance about a ship-to-ship transfer occurring within the Exclusive Economic Zone of a Member State or within 12 nautical miles from the baseline of that Member State's coast.
What do the intellectual property prohibitions entail?
The measures seek to avoid that goods and technology under EU export restrictions are instead manufactured either in Russia, or in other countries and then transferred to Russia. The measures do so by preventing EU companies from transferring their industrial know-how and trade secrets concerning sanctioned goods to third country companies, which would then manufacture those products in or provide them to Russia.
Industrial knowledge and expertise for EU goods which Russia was dependent on must remain in the EU.
Disinformation
Why has the EU added further media outlets to the sanctions list?
The EU has extended the prohibition to broadcast content to five Russian media outlets (RT Balkan, Oriental Review, Tsargrad, New Eastern Outlook, Katehon) because it has proof that these are under the permanent control of the Russian leadership and systematically participate in spreading misinformation and propaganda, which constitutes a threat to the Union's public order and security.
Clarifications
Which clarifications did the EU introduce?
The new measures provide further clarifications regarding the authorities competent to receive notifications of non-scheduled flights between Russia and the EU. They also provide further clarifications regarding the processing and exchanging of information by the competent authorities of the Member States and regarding the respect of the confidentiality of communications between lawyers and their clients in the context of existing and newly introduced reporting obligations.
They also provide legal certainty for exchange of information between competent authorities, customs and financial supervisors, within the same and among different Member States, in particular in relation to circumvention patterns and attempted circumvention.
Reporting obligations
What reporting obligations have been proposed and why?
Member States will now have to share with the Commission and other Member States any decision to reject an application for authorisation. They will also have to inform the Commission and other Member States in case they want to grant an authorisation essentially identical to one already denied by another Member State. These obligations, already envisaged for dual-use goods, are now extended to all derogations under the Russia economic sanctions (Council Regulation (EU) 833/2014).
The measure tackles the possible situation of economic operators lodging multiple applications for authorisation of the same activity (‘forum shopping'). It also ensures consistency in Member States' approach as to increase legal certainty.
General
What is the rationale of imposing such sanctions?
Sanctions are targeted at the Kremlin. They aim to weaken the Russian government's ability to finance its war of aggression against Ukraine and they are calibrated in order to minimise the negative consequences on the Russian population.
Sanctions are imposing a direct cost on Russia for its war of aggression and damaging Russia's industrial and economic ability to wage war, manufacture more weapons, and repair existing weapons systems. The sanctions also deprive the Russian army and its suppliers of the goods and equipment needed to wage war against Ukraine.
In addition, sanctions are designed to maximise the negative impact for the Russian economy, while limiting the consequences for EU businesses and citizens. We welcome EU companies' diligence in complying with the sanctions framework in place.
Ensuring an effective and diligent implementation of sanctions is key to prevent circumvention. This is primarily the responsibility of Member States.
In this process, the European Commission is fully committed to assisting national authorities and ensuring a consistent implementation across the Union.
Could the latest EU sanctions package aggravate the global food crisis?
No. Not at all! It is Russia's unprovoked invasion of Ukraine and Russia's deliberate actions - such as blocking grain exports from Ukraine, burning crops and silos, stealing Ukrainian cereals, and complicating trade - that are provoking a global food crisis.
None of the EU's sanctions adopted against Russia, including those included in the latest sanctions package, prevent the supply of agri-food products, medical equipment or medicines for the general population in Russia. Agricultural machinery per se is also not subject to any export ban.
None of the sanctions adopted by the EU in view of Russia's war of aggression against Ukraine target trade in agricultural and food products, including cereals and fertilisers, between third countries and Russia.
For instance: If third countries wish to buy Russian fertilisers, there are no EU sanctions that would prohibit this.
Safeguards to ensure that EU sanctions do not indirectly impact global food (e.g. through overcompliance) trade remain in place also after the adoption of the latest sanctions package. On 19 September 2022, the EU issued updated guidance to clarify the impact of sanctions on the transport of a sanctioned item to a third country. This makes it clear that the transfer of Russian fertilisers to third countries via the EU is permitted. Given the food security concerns in certain third countries, the 9th package of sanctions introduced a targeted derogation allowing Member States to unfreeze assets of, and to make funds and economic resources available to, certain individuals who held a significant role in international trade in agricultural and food products, including wheat and fertilisers, prior to their listing.
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