Ukraine - EU and UK Sanctions – Update & Fifth and Sixth Packages

10 May 2022

The latest update on the Ukrainian Port situation from a Ukraine Correspondent, Dias Marine Consulting PC is that all Ukrainian ports remain closed for inward/outward passages.

EU Sanctions

Sixth Package - On 4 May 2022, the EU President announced that a sixth package of sanctions in response to Russia’s aggression in Ukraine. The measures are still being finalised and includes:
  • Sanctions designations of officers and individuals involved in war crimes in Bucha and the siege in Mariupol.
  • The removal of Sberbank and two other Russian banks from Swift.
  • Banning three big Russian state owned broadcasters from distributing content in the EU.
In addition, the EU has proposed an import ban on all Russian oil, which is yet to be agreed. It is understood that the intention was to phase out the import of Russian crude oil within 6 months and the import of refined products by the end of 2022 but there have been objections from various EU states (including Hungary and Slovakia), so details on Russian oil sanctions will have to be awaited for concrete information.

A copy of the press release with full text of the speech is available here.

Fifth Package - Previously, on 8 April 2022, the EU announced a fifth package of sanctions which comprises:
  • a prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia. An exception is available until 10 August 2022.
  • a prohibition on vessels registered under the flag of Russia and Russian operated vessels from accessing EU ports, although derogations may be granted, e.g. for humanitarian purposes for agricultural and food products, humanitarian aid, and energy.
  • a ban on any Russian and Belarusian road transport undertaking preventing them from transporting goods by road within the EU, including in transit. Derogations are nonetheless granted for a number of products, such as pharmaceutical, medical, agricultural and food products, including wheat, and for road transport for humanitarian purposes.
  • further export bans, targeting jet fuel, certain fuel additives, and other goods such as quantum computers and advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment. These prohibit the sale, supply, transfer or export as well as related technical and financial assistance to any person in Russia or for the use in Russia of jet fuel and certain fuel additives (as listed in Annex XX); and goods and technology which could contribute in particular to the enhancement of Russian industrial capacities (as listed in Annex XXIII).
  • new import bans on products such as: wood, cement, fertilisers, seafood and liquor (as listed in Annex XXI). These prohibit the purchase, import, or transfer into the EU, as well as financial assistance, if originating in Russia or exported from Russia, of goods which generate significant revenues for Russia.
  • a full transaction ban is imposed on four key Russian banks (VTB, Novikombank, Sovcombank, and Otkritie Bank) representing 23% of market share in the Russian banking sector. After being de-SWIFTed these banks will now be subject to an asset freeze, thereby being completely cut off from EU markets.
  • a series of targeted economic measures intended to strengthen existing measures and close loopholes, such as: a general EU ban on participation of Russian companies in public procurement in member states, the exclusion of all financial support to Russian public bodies. an extended prohibition on deposits to crypto-wallets, and on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states to Russia and Belarus, or to any natural or legal person, entity or body in Russia and Belarus.
  • In addition, the EU Council has decided to sanction companies whose products or technology have played a role in the invasion, key oligarchs and businesspeople, high-ranking Kremlin officials, proponents of disinformation and information manipulation, systematically spreading the Kremlin’s narrative on Russia's war aggression in Ukraine, as well as family members of already sanctioned individuals, in order to make sure that EU sanctions are not circumvented.
A copy of the press release is available here. A copy of the consolidated text of Council Regulation (EU) no. 833/2014 of 31 July 2014 including the fifth package amendments and Annexes can be accessed here.

Members and Assureds should carefully assess the risks involved in trade connected with Russia, Belarus and/or Ukraine, and ensure that due diligence is carried out using updated lists. Where applicable, Members/Assureds should check the date that the underlying sales contract was entered into before agreeing/performing a voyage. If an exemption period applies, performance of the contracts must be completed before the indicated date.

Members are reminded that EU sanctions apply in the following circumstances: within the territory of the Union, including its airspace; on board any aircraft or any vessel under the jurisdiction of a Member State; to any person inside or outside the territory of the Union who is a national of a Member State; to any legal person, entity or body, inside or outside the territory of the Union, which is incorporated or constituted under the law of a Member State; to any legal person, entity or body in respect of any business done in whole or in part within the Union.

UK Sanctions
On 5 May, the UK added Evraz PLC as a sanctioned entity subject to an asset freeze – for the press release click here – whilst issuing a general licence (GL INT/2022/1710676) for continuation of business with Evraz PLC’s North American subsidiaries.

On 14 April 2022, the UK government published the Russia (Sanctions) (EU Exit) (Amendment) (No. 8) Regulations 2022 introducing further amendments to the Russia (Sanctions) (EU Exit) Regulations 2019 . The Amendment sets out new trade restrictions in relation to:
  • oil refining goods, software and technology, quantum computing and advanced materials goods, software and technology – the amended measures prohibit the export, supply and delivery, making available and transfer of such items to, or for use in, Russia. The restrictions apply to provision of related technical assistance, financial services, funds and brokering services.
  • luxury goods - The UK has now prohibited the export, supply and delivery, making available and transfer of luxury products listed in Schedule 3A to, or for use in, Russia, or to a person connected with Russia. This also includes the supply or delivery of luxury goods from a third country to a place in Russia, but does not include the typical controls on related technical assistance, financial services, funds and brokering services.
  • import of iron and steel goods – new restrictions prohibit the import, acquisition, supply and delivery of iron and steel products (as listed in Schedule 3B) originating in or consigned from Russia.
There are a number of exceptions available from these measures, as well as licensing and enforcement provisions.

The sanctions landscape continues to develop quickly, so there may be other sanctions and details that we have not mentioned and/or are not yet available. Please contact your usual Club contact if you have any questions.Further News Alerts will follow on additional sanctions that are implemented.