EU: The Council of Ministers adopted the 14th package of sanctions against Russia

The Council of Ministers adopted today the 14th package of sanctions against Russia.

The new package includes restrictive measures for an additional 116 individuals and entities responsible for actions that undermine or threaten the territorial integrity, sovereignty, and independence of Ukraine, as well as the following sectoral measures:

Energy

To ensure that EU facilities are not used for the transshipment of Russian liquefied natural gas (LNG) to third countries and thus reduce the significant revenue Russia derives from selling and transporting LNG, the EU will prohibit the retransshipment services of Russian LNG on EU territory for the purpose of transshipping to third countries. This covers both ship-to-ship transfers and ship-to-shore transfers, as well as retransshipment operations and does not affect imports but only the re-export to third countries through the EU. The European Commission will monitor the implementation and development of this decision and may propose mitigating measures if necessary.

Furthermore, the EU will prohibit new investments, as well as the provision of goods, technology, and services for the completion of LNG projects under construction, such as Arctic LNG 2 and Murmansk LNG. Restrictions are introduced on imports of Russian LNG through EU terminals not connected to the gas grid.

Sanctions circumvention

The EU is equipped with additional tools to combat circumvention.

First, EU parent companies will be required to make every effort to ensure that their third-country subsidiaries do not engage in activities that would result in an outcome that the sanctions seek to prevent.

Second, in order to address the re-export of battlefield goods that are being relocated from Ukraine or are critical to the development of Russian military systems, it has been decided that EU operators selling such battlefield goods to third countries should implement mechanisms capable of tracing them as well as evaluating the risks of re-export to Russia and mitigating them.

Additionally, EU operators transferring industrial know-how for the production of battlefield goods to commercial counterparts in third countries should now include contractual clauses to ensure that this know-how is not used for goods intended for Russia.

Finance

The Council decided to outlaw the use of the “System for Transfer of Financial Messages” (SPFS), a specialized financial messaging service developed by the Central Bank of Russia to counteract the impact of restrictive measures. EU entities operating outside Russia will be prohibited from connecting to SPFS or equivalent specialized financial messaging services.

Furthermore, EU operators will be prohibited from engaging in transactions with entities that are specifically listed on the stock exchange using SPFS outside Russia.

Additionally, the Council introduces a ban on transactions with targeted credit and financial institutions and asset cryptocurrency providers based outside the EU, when these entities facilitate transactions supporting Russia’s defense-industrial base through the export, supply, sale, or transfer to Russia of dual-use goods and technology, sensitive items, battlefield goods, firearms, and ammunition.

Funding of political parties and other organizations

In view of the ongoing Russian efforts to interfere with democratic processes in the EU and undermine its democratic foundations, including through influence campaigns and disinformation promotion, the Council decided that political parties and organizations, non-governmental organizations, including think tanks, or media service providers in the EU, will no longer be allowed to accept funding originating from the Russian state and its proxies.

According to the Charter of Fundamental Rights, the measures agreed today will not prevent media service providers and their personnel from engaging in other activities in the EU, such as research and interviews.

Transport

For the first time, the EU has approved a measure specifically targeting ships contributing to Russia’s war against Ukraine, which will be subject to a port access ban and service ban, the Council reports.

Ships can be designated for various reasons, such as transporting military equipment for Russia, carrying stolen Ukrainian grain, and supporting the development of Russia’s energy sector, for example through the transportation of LNG components or LNG transshipments.

Additionally, to prevent other forms of circumvention, the Council decided to expand the EU flight ban. The prohibition on landing, taking off, or overflying EU territory will also apply to any aircraft used for non-scheduled flight where a Russian natural or legal person, entity, or body can effectively determine the place or time of its takeoff or landing to reach, for example, a holiday destination or a business meeting. Additionally, air carriers must provide any information requested by national competent authorities of member states regarding non-scheduled flights, including the ownership of the aircraft and possibly the passengers.

It was also decided to expand the ban on road transport of goods within EU territory, including transit, to cover EU operators owned 25% or more by a Russian natural or legal person.

Import-Export controls and restrictions

The Council added 61 new entities to the list of those directly supporting Russia’s military and industrial components in its aggressive war against Ukraine. They will be subject to stricter export restrictions concerning dual-use goods and technologies, as well as goods and technology that may contribute to the technological enhancement of Russia’s defense and security sector. Some of these entities are located in third countries (China, Kazakhstan, Kyrgyzstan, Turkey, and the United Arab Emirates) and have been involved in circumventing trade restrictions and engaging in the supply of sensitive items used, for example, in drone production or providing material support for Russian military operations.

Protection of EU operators

The package also includes measures allowing EU operators to claim compensation from damages caused by Russian companies due to the application of sanctions and expropriation.

Other measures

Today’s package will impose restrictions on accepting applications for EU listings of certain intellectual property rights from Russian nationals and companies, aimed at compensating for the actions of the Russian government and courts who illegally deprive EU intellectual property rights holders of their protection in Russia.

Finally, it will be prohibited to purchase, import, transport, or export Ukrainian cultural goods and other goods of archaeological, historical, cultural, rare scientific, or religious importance, where there are reasonable grounds to suspect that the goods have been unlawfully removed from Ukraine.