Briefings

Sanctions: more pressure on Russia

As widely anticipated, further EU sanctions were adopted today, and businesses with trading or other links with Russia need to check carefully that the latest restrictions do not affect them.

Three separate Regulations were published at the same time, as set out below.

Regulation 959/2014 widens the grounds on which the Council can add individuals or entities to the sanctions lists, so that the grounds now include "natural or legal persons, entities or bodies conducting transactions with the separatist groups in the Donbass region of Ukraine".

Regulation 960/2014 imposes a number of new restrictions, as follows:

• Further restrictions on the supply to Russia of dual use goods.
• A new prohibition on the supply of certain services (drilling, well testing, logging and completion services, and supply of specialised floating vessels) for deep water oil exploration and production, arctic oil exploration and production and shale oil projects in Russia (subject to a grandfathering provision and a limited derogation in cases of emergency).
• An extension of the restrictions on access to capital markets, in two key respects, as follows: (i) they affect financial instruments with a shorter maturity (reduced from 90 days to 30 days) and (ii) they affect more Russian entities, including nine Russian defence sector entities plus Rosneft, Transneft and Gazprom Neft, as well as non-EU subsidiaries where 50% or more is owned (directly or indirectly) by one of the listed entities.
• A prohibition on directly or indirectly making or being part of any arrangement to make certain new loans or credit to the entities which are subject to the restrictions on access to capital markets (there is a carve-out for "loans or credit that have a specific and documented objective to provide financing for non-prohibited imports or exports of goods and non-financial services between the Union and Russia")

Regulation 961/2014 adds 24 individuals to the EU sanctions list, including Sergey Viktorovich Chemezov and Alexander Mikhailovich Babakov.

We are monitoring the situation closely and updates will follow as and when further restrictions are imposed.

For more information, please contact Daniel Martin, Partner, on +44 (0)20 7264 8189 or daniel.martin@hfw.com, or Anthony Woolich, Partner, on + 44 (0)20 7264 8033 or anthony.woolich@hfw.com, or your usual contact at HFW.