The European Union has introduced a new package of sanctions in
response to the escalation of aggression by Russia against the
Ukraine. These sanctions were adopted unanimously by all 27 member
states at the end of an extraordinary meeting of foreign affairs
ministers in Paris on 22 February 2022. Minister Simon Coveney had
indicated in a statement made on 21 February 2022 that
"Ireland supports a clear and strong EU response,
including additional sanctions measures".
The sanctions package targets individuals and entities from a range
of sectors, including political, business and military. These
individuals will be subject to asset freezes and will not be
permitted to enter or transit through EU territory. The asset
freeze will also include a prohibition on making funds available to
them.
In addition to the individual and entity sanctions noted above, a
number of limitations have been placed on the Russian
government's access to the EU's capital and financial
services markets. These include:
- measures targeting banks financing military or other operations in separatist-controlled regions;
- banning Russian bond trades in the EU;
- blocking all trade from the two breakaway regions of Donetsk and Luhansk to and from the EU.
The European Commission has noted that the EU is Russia's
largest trading partner, accounting for 37.3% of the country's
total trade in goods in 2020. 36.5% of Russia's imports came
from the EU and 37.9% of its exports went to the EU. Restrictive
measures against Russia have been in place since March 2014 in
response to the annexation of Crimea and deliberate attempts to
destabilise Ukraine.
On the basis that additional EU sanctions are likely in the absence
of a significant de-escalation of hostile activity, Irish companies
should continue to monitor all relevant sanctions lists and
screen any counterparts in the Ukraine and Russia
accordingly.
Where Irish companies are a party to contracts which are connected
to Russia or Ukraine, these contracts should be reviewed in order
to ascertain the impact of any supply chain / operational issues
which may impact the performance of that contract.
Finally, for any new transaction or contract contemplated by an
Irish entity, particular care should be taken at due diligence
stage to ensure that any implications of these sanctions are
identified quickly.
We will issue further updates in the event of any material
developments. Please get in touch with your usual William Fry
contact or Stephen Keogh if you have any queries or
require advice on this matter.
Contributed by Julie Murray
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.