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EU Commission welcomes the Council's adoption of an eighth package of hard-hitting sanctions against Russia for its aggression. Photo by David_Peterson on Pixabay

Brussels, 6 October 2022

The Commission welcomes the Council’s adoption of an eighth package of hard-hitting sanctions against Russia for its aggression against Ukraine. This package – which has been closely coordinated with our international partners – responds to Russia’s continued escalation and illegal war against Ukraine, including by illegally annexing Ukrainian territory based on sham “referenda”, mobilising additional troops, and issuing open nuclear threats.

This package introduces new EU import bans worth €7 billion to curb Russia’s revenues, as well as export restrictions, which will further deprive the Kremlin’s military and industrial complex of key components and technologies and Russia’s economy of European services and expertise. The sanctions also deprive the Russian army and its suppliers from further specific goods and equipment needed to wage its war on Ukrainian territory. The package also lays the basis for the required legal framework to implement the oil price cap envisaged by the G7.

Specifically, this package contains the following elements:

Additional listings

Additional individuals and entities have been sanctioned. This targets those involved in Russia’s occupation, illegal annexation, and sham “referenda” in the occupied territories/oblasts of Donetsk, Luhansk, Kherson, and Zaporizhzhia regions. It also includes individuals and entities working in the defence sector, such as high-ranking and military officials, as well as companies supporting the Russian armed forces. The EU also continues to target actors who spread disinformation about the war.

EU restrictive measure target key decision makers, oligarchs, senior military officials and propagandists, responsible for undermining Ukraine’s territorial integrity.

Extension of restrictions to the oblasts of Kherson and Zaporizhzhia

The geographical scope of the restrictive measures in response to the recognition of the non-government controlled areas of the Donetsk and Luhansk oblasts of Ukraine and the ordering of Russian armed forces into those areas has been extended to cover all the non-government controlled areas of Ukraine in the oblasts of Donetsk, Luhansk, Zaporizhzhia and Kherson.

New export restrictions

Additional export restrictions have been introduced which aim to reduce Russia’s access to military, industrial and technological items, as well as its ability to develop its defence and security sector.

This includes the banning of the export of coal including coking coal (which is used in Russian industrial plants), specific electronic components (found in Russian weapons), technical items used in the aviation sector, as well as certain chemicals.

A prohibition on exporting small arms and other goods under the anti-torture Regulation has been added.

New import restrictions

Almost €7 billion worth of additional import restrictions have been agreed.

It includes, for example, a ban on the import of Russian finished and semi-finished steel products (subject to a transition period for some semi-finished), machinery and appliances, plastics, vehicles, textiles, footwear, leather, ceramics, certain chemical products, and non-gold jewellery.

Implementing the G7 oil price cap

Today’s package marks the beginning of the implementation within the EU of the G7 agreement on Russian oil exports. While the EU’s ban on importing Russian seaborne crude oil fully remains, the price cap, once implemented, would allow European operators to undertake and support the transport of Russian oil to third countries, provided its price remains under a pre-set “cap”. This will help to further reduce Russia’s revenues, while keeping global energy markets stable through continued supplies. It will thus also help address inflation and keep energy costs stable at a time when high costs – particularly elevated fuel prices – are a great concern to all Europeans.

This measure is being closely coordinated with G7 partners. It would take effect after 5 December 2022 for crude and 5 February 2023 for refined petroleum products, after a further decision by the Council.

Restrictions on State-owned enterprises

Today’s package bans EU nationals from holding posts in the governing bodies of certain state-owned enterprises.

It also bans all transactions with the Russian Maritime Register, adding it to the list of state-owned enterprises which are subject to a transaction ban.

Financial, IT consultancy and other business services

The existing prohibitions on crypto assets have been tightened by banning all crypto-asset wallets, accounts, or custody services, irrespective of the amount of the wallet (previously up to €10,000 was allowed).

The package widens the scope of services that can no longer be provided to the government of Russia or legal persons established in Russia: these now include IT consultancy, legal advisory, architecture and engineering services. These are significant as they will potentially weaken Russia’s industrial capacity because it is highly dependent on importing these services.

Deterring sanctions circumvention

The EU has introduced a new listing criterion, which will allow it to sanction persons who facilitate the infringements of the prohibition against circumvention of sanctions.

More Information

The EU’s sanctions against Russia are proving effective. They are damaging Russia’s ability to manufacture new weapons and repair existing ones, as well as hinder its transport of material.

The geopolitical, economic, and financial implications of Russia’s continued aggression are clear, as the war has disrupted global commodities markets, especially for agrifood products and energy. The EU continues to ensure that its sanctions do not impact energy and agrifood exports from Russia to third countries.

As guardian of the EU Treaties, the European Commission monitors the enforcement of EU sanctions across the EU.

The EU stands united in its solidarity with Ukraine, and will continue to support Ukraine and its people together with its international partners, including through additional political, financial, and humanitarian support.

For More Information

European Commission website on EU sanctions against Russia and Belarus

European Commission website on Ukraine

Q&A on restrictive measures

Source – EU Commission


Q&A: Eighth package of restrictive measures against Russia

Brussels, 6 October 2022

 

Listings

Who have you targeted?

30 additional individuals and 7 entities have been sanctioned, including the illegitimate Russian proxy authorities in occupied territories of Donetsk, Luhansk, Kherson, and Zaporizhzhia regions  and other Russian individuals who organised and facilitated the sham referenda in these four occupied areas of Ukraine. We are also targeting more individuals in the defence sector, including several Deputies of the Russian Minister of Defence, a major General who is the Commander of a Russian army unit occupying Ukraine, as well as persons and companies who support the Russian armed forces by providing army equipment and weapons, including missiles and fighter aircrafts, and who benefit from the war. New listings also include those who spread disinformation about the war.

What measures were adopted regarding the Ukrainian territories that Russia illegally annexed?

The restrictions established in February 2022 on trade with the non-Government controlled areas of Ukraine in the oblasts of Donetsk and Luhansk have been extended to the non-Government controlled areas of Ukraine in the oblasts of Kherson and Zaporizhzhia that were illegally annexed by the Russian Federation. This includes the prohibition to import goods originating in those areas, with the exception of goods authorised by the Government of Ukraine, as well as trade in goods and technology for use in certain sectors and services in the sectors of transport, telecommunications, energy or the prospecting, exploration and production of oil, gas and mineral resources,

Import and export restrictions

What new import bans have been introduced?

Finished or semi-finished steel products that either originate in Russia or have been exported from Russia will now be fully banned from being imported into the EU. A three-month wind-down period is envisaged to allow for the execution of contracts signed before the import ban on the semi-finished steel products was adopted. For some semi-finished steel products with strict technical requirements for further processing by EU steel industry (two products), the phase-in of the full ban will take place after a transition period of up to 2 years.

The new package will also extend the ban to imports into the EU of Russian steel products that have been further processed in third countries, within a 1-year period.

Certain types of machinery and appliances, and certain chemical products, including cosmetics are now banned.

Plastics, paper and wood pulp are banned.

Vehicles, textiles, footwear, leather, ceramics and articles of stone are also banned.

A new prohibition on the direct import, purchase or transfer of precious stones, precious metals or metal clad with precious metals.

What export bans have been introduced?

The list of controlled items which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector has been expanded. This includes nine customs codes classifying electronic components found in Russian weapons.   22 additional chemicals have been added to the list of controlled substances, as well as firearms and other goods that could be used for capital punishment or torture, as set out under the EU Anti-torture Regulation 2019/125.

New restrictions on the sale, supply, transfer or export of additional goods used in the aviation sector have been introduced.

Coal exports will be banned subject to a three-month wind-down period of existing contracts signed before the export ban was adopted.

Can trade or service provision be carried out if needed to ensure the security of the Zaporizhzhia nuclear plant?

Yes. There is an exception for urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety, including the safety of infrastructure, or on the environment.

Don’t these measures capture goods and services which are substitutable, i.e. Russians buying (or selling) them from China and other countries not sanctioning Russia for its aggression?

Russia is highly dependent on those items subject to an export ban from the EU and cannot easily substitute them with products from third countries.

The EU is Russia’s main export market for those items subject to an import ban. This high degree of exposure means finding new export markets will be extremely difficult for Russian companies.

Implementing the G7 oil price cap

What does the oil price cap achieve?

The price cap will drastically reduce the revenues Russia earns from oil after its illegal war on Ukraine has inflated global energy prices. The oil price cap can also serve to stabilise global energy prices.

A price cap will help address inflation and keep energy costs stable at a time when high costs – particularly elevated fuel prices – are a great concern to all Europeans.

How will the actual price of the price cap be set?

The G7 coalition will conduct a technical exercise to consider a range of factors to reach international consensus on the level at which the price cap will be set.

Does this involve a weakening of EU sanctions?

No. The G7 price cap does not change our EU oil import ban. It will only involve clinically amending EU sanctions (the maritime services ban) to allow the provision of services to maritime transport below the cap. Services for transport above the cap remain sanctioned. This amendment will actually help strengthen the overall impact of global sanctions against Russia, by creating incentives for a coalition of third countries to trade at or below the cap, thereby reducing Russia’s revenues.

What does this mean for the maritime industries of certain Member States?

The EU’s full import embargo on Russian crude oil and refined petroleum products, already agreed by the Council in June, is not affected – so nothing changes for Member States on this front. As regards maritime services by Member States’ providers covering Russian oil, there is no impact as long as the trades concerned remain at or under the set cap. The Commission will continuously monitor the possible broader economic impact on Member States and will, together with allies, continue to strive for the largest possible price capping coalition, to render this system as effective as possible.

Restrictions on State-owned enterprises

What has changed regarding sanctions on certain state-owned enterprises in Russia?

EU sanctions already banned all transactions with certain State-owned enterprises. The new measures further clarify that this prohibition also includes the holding of posts by EU citizens in their governing bodies.

What is the ban on all transactions with the Russian Maritime Register?

The Russian Maritime Register, a 100% State-owned entity, which performs activities related to the classification and inspection, including in the field of security, of Russian and non-Russian ships and crafts, has been added to the list of state-owned entities that are subject to the transaction ban. This prohibits the provision of any sort of economically valuable benefit to the Russian Maritime Register.

Financial, IT consultancy and other business services

Are more services banned?

Yes, this package widens the scope of services which can no longer be provided to the government of Russia or legal persons established in Russia. It includes the following:

    • Architectural and engineering services: this covers both architectural and engineering services, including integrated engineering services, urban planning and landscape architectural services, and engineering-related scientific and technical consulting services.
    • IT consultancy services: this covers consultancy services related to the installation of computer hardware, such as assistance services to the clients in the installation of computer hardware (i.e. physical equipment) and computer networks, as well as software implementation services (including all services involving consultancy services in the development and implementation of software).
    • Legal services: this covers the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law, participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties, and the preparation, execution and verification of legal documents. This prohibition does not extend to representation, advice, the preparation of documents and verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts, other duly constituted official tribunals, and arbitral and mediation proceedings.

What measures were adopted regarding crypto?

The package further tightens the existing prohibitions on crypto assets by removing the threshold for the existing prohibition, thereby banning all crypto-asset wallet, account or custody services, irrespective of the amount of the wallet (previously allowed up to €10,000).

Deterring sanctions circumvention

What does this new proposal mean?

The EU has introduced a new listing criterion, which will allow it to sanction persons who facilitate the circumvention of sanctions. This includes circumvention by EU citizens.

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 aggression against Ukraine and 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 its war on sovereign Ukrainian territory.

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 them and ensuring a consistent implementation across the Union.

Are EU sanctions causing a food crisis?

No. 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 is provoking a global food crisis.

None of the EU’s sanctions adopted against Russia prevent the supply of agri-food, medical equipment or medicines for the general population. Agricultural machinery is also not subject to any export ban.

None of the sanctions adopted by the EU in view of Russia’s war of aggression in Ukraine target the trade in agricultural and food products, including cereals and fertilisers, between third countries and Russia.

If third countries wish to buy Russian fertilisers, there are no EU sanctions that would prohibit this.

On 19 September 2022, the EU issued updated guidance to clarify the situation in which EU operators transport a sanctioned item to a third country. It makes it clear that the transfer of Russian fertilisers to third countries is permitted.

In a very challenging environment with rising production costs for farmers, we need to become less dependent on inputs for fertilisers production from unreliable trade partners. We must diversify our sources of supply. The Commission proposed legislation for this diversification, notably the suspension of import tariffs on fertilisers inputs that originate in countries other than Russia or Belarus.

For More Information

Press release – Ukraine: EU agrees on eighth package of sanctions against Russia 

Official Journal

European Commission website on Ukraine

Q&A on restrictive measures

 

Source – EU Commission

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