On 18 December 2023, the EU issued its 12th package of sanctions targeting Russia, in continued response to its invasion of Ukraine in February 2022, adopting Regulation (EU) 2023/2875 (amending Regulation (EU) 269/2014) and Regulation (EU) 2023/2878 (amending Regulation (EU) 833/2014).

Key measures:

  • Additional Russian individuals and companies have been sanctioned and added to the EU's asset freeze list.
  • New import and export bans have come into force, including a prohibition on the purchase, import or transfer of Russian diamonds.
  • The oil price cap shall now be implemented more strictly, through closer monitoring of oil tankers.
  • Stronger and additional anti-circumvention measures adopted.

This new package of sanctions includes, but is not limited to, the following measures:

Asset freezes:

  • 61 individuals and 86 entities have been sanctioned and added to the EU's asset freeze list.
  • This includes persons operating in Russia's military, defence, and IT sectors, as well as AlfaStrakhovanie Group (one of the biggest insurance companies in Russia), Rosfinmonitoring (the Federal Service for Financial Monitoring), and four telecom companies in the non-government controlled territories of Ukraine that Russia has temporarily occupied: LLC Mirtelecom, LLC SC Lyukstrans, JSC Krymtelecom, and JSC Beto.

Trade measures:

  • Ban on Russian diamonds.
  • Prohibition on the provision of software for the management of enterprises and software for industrial design and manufacture to the Russian government or Russian persons.
    • As part of a G7-coordinated effort, the purchase, import or transfer of non-industrial Russian diamonds is now prohibited. This trade has historically provided Russia with annual revenue of at least EUR 4 billion.
    • In addition to the direct ban on diamonds exported from Russia to be implemented by 1 January 2024, this ban will include certain Russian diamonds polished in a third country (by 1 March 2024), and lab-grown diamonds, jewellery and watches containing diamonds (by 1 September 2024).
  • Import ban on raw materials used in production of steel, processed aluminium products and other metal goods.
  • Additional export restrictions on dual-use, advanced technological and industrial goods worth EUR 2.3 billion annually:
    • Dual-use and advanced technological goods subject to restrictions include chemicals, thermostats, DC motors and machinery parts, all of which could strengthen Russia's military capabilities.
    • Industrial goods subject to restrictions include construction-related goods, processed steel, copper, lasers and batteries.
  • New prohibitions on the provision of software for the management of enterprises or industrial design and manufacture to the Russian Government or Russia-based entities.
  • Addition of 29 Russian and third-country entities to the list of entities associated with supporting the Russian military-industrial complex, including entities registered in Singapore.

Energy measures:

  • Oil price cap:
    • The price cap on Russian oil will be enforced more effectively through closer monitoring of the sale of oil tankers to third countries, whereby they may be used to circumvent the cap as part of the so-called Russian 'shadow fleet', and more detailed attestation requirements.
    • The EU Commission and member states will be required to share information on a periodic basis, in order to identify any vessels and entities transporting Russian oil (or related products) seeking to conceal the origins or end-destination of their cargo.
  • Import ban on liquefied petroleum gas (LPG), with exemptions for existing contracts for a period of up to 12 months.
  • Existing exemption that permitted Czechia to import Russian oil via pipeline has been extended until 5 December 2024.

Stronger anti-circumvention measures:

  • Broadening of the scope of the Russian transit prohibition to include certain economically critical goods when intended for export to third countries.
  • Obligation on operators to contractually prohibit the re-export of categories of sensitive goods to Russia. These categories include those related to aviation, jet fuel, firearms and goods on the Common High Priority list.
  • Obligation to notify where funds are transferred out of the European Union (exceeding EUR 100,000) by EU entities that are directly or indirectly owned more than 40% by Russian nationals or persons residing in Russia or by Russian established entities.
  • Replacement of the exemption on the provision of prohibited professional and business services to Russian subsidiaries controlled or owned by entities in the EU, EEA, Switzerland or a partner country:
    • As of 20 June 2024, entities within the EU, EEA, Switzerland or partner country will be unable to rely on the exemption and will be required to apply for a licence in order to provide prohibited services to their Russian subsidiary(ies).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.