After a good summer, it’s time to get back up to speed with the latest sanctions developments. In this first post of our multi-part series, we’re kicking it off by diving into the new sanctions restrictions put in place over the summer.??
As the US and UK were quiet on imposing new restrictions this summer (instead focusing on designations) the biggest mover was the EU, who finally adopted the 14th sanctions package on Russia.??
Here are the most relevant EU sanctions prohibitions for Nordic companies that are now in effect but also stay tuned for our upcoming posts which will cover the cutting through the confusion of the new EU Instant Payment Regulations on sanctions screening, and the rapidly maturing and formalizing of risk management requirements in response to increasing sanctions circumvention around the globe.?
- Liquified Natural Gas (LNG) Energy Investments: The latest amendment of Article 3a now explicitly extends the investment prohibitions in the energy sector to include projects under construction for LNG production.?
- LNG Reloading & Transhipment: The provision of reloading services for transshipment operations of LNG originating in or exported from Russia is now prohibited, with a carve-out if the reloading is necessary for a transshipment in which the LNG is used to ensure energy supply to an EU Member State. There is a wind-down period for contracts concluded before 25 June 2024 until 26 March 2025. (Article 3r)
- LNG Projects: The provision, directly or indirectly, of goods, technologies and services related to the completion of LNG projects in Russia is now prohibited. There is a wind-down period until 26 September 2024 for contracts concluded before 25 June 2024 (Article 3t).
- Gas System: Importing LNG originating in or exported from Russia through EU terminals that are not connected to the interconnected EU natural gas system is now prohibited. (Article 3u)
Transportation and Logistics:
- Entities owned 25% or more by a Russian person are not permitted to conduct road transport, including transit. The restriction also applies to any road transit company that was established in the EU after 8 April 2022 and is 25% or more owned by a Russian person. There is a carve-out for companies owned by Russian persons who are citizens or residents of the EU and the previous carve-outs for mail services and Kaliningrad transits remain. (Article 3l)
- The trade in, and provision of related services involving, Ukrainian cultural property including archeological, historical, cultural, rare scientific, or religious importance are now forbidden. However, the prohibition does not apply to goods that can be demonstrated to have been exported from Ukraine prior to 1 March 2014 or those being returned to Ukraine. (Article 3v)
- Russian Legal Entities: It is prohibited to engage in a transaction with any legal person or entity that has filed a legal claim to a Russian court that seeks to challenge the sanctions imposed by the EU. (Article 5ab)
- Financial Services: It is now forbidden for EU entities operating outside of Russia to connect to Russian financial services like the System for Transfer of Financial Messages (SPFS), or engage with listed parties that are connected to such services to increase Russia’s financial resilience and evade sanctions. (Article 5ac)
- Russian Financial Intermediaries: There is a new measure prohibiting direct or indirect transactions with listed banks, financial institutions or crypto service providers that support Russia’s acquisition of common high priority items, dual use goods and technologies, prohibited military and industrial items or firearms and ammunition, and any entity acting on behalf of the listed institution (Article 5ad). However, there are currently no institutions listed in the associated Annex XLV.
- Russian Donations and Financial Support: There is now a prohibition for European political foundations, political parties and alliances, non-governmental organizations registered in the Union, and media service providers established in a Member State from accepting any form of donations, economic benefits, or support from Russian publicly controlled entities, including their subsidiaries outside the EU. (Article 5t)
Intellectual Property (IP):
- IP Registration: EU intellectual property offices are no longer allowed to accept new applications for registration of trademarks, patents, industrial designs, utility models, protected designations of origin, and geographical indications from Russian nationals and entities. There is the common carveout for persons who are citizens of or residents in the EU, EEA, or Switzerland. (Article 5s)
- “No Russia clause” for high-priority items-related IP rights: EU companies shall now include a “no Russia clause,” including adequate remedies for breaches, when transferring IP rights or trade secrets related to items on the “high priority list” and as of 26 December 2024 shall apply “no Russia clauses” to counterparties and possible sublicensees from using the IP or trade secrets in items that are intended to go directly or indirectly to Russia. There is a wind down for contracts concluded before 25 June 2024 until 26 June 2025 or until the contract expires, whichever is shorter. (Article 12ga)
- Vessels can be listed and made subject to 8 different prohibitions including flagging, crewing, chartering, brokering or financing, if they are engaged in circumventing EU sanctions, are controlled by or support designated persons, aid Russia’s energy sector, ship aerospace items, jet fuels and related items, items that enhance Russia’s industrial capacity, or export items that generate significant revenue for Russia. There are currently 27 vessels listed in Annex XLII under this article. (Article 3s)
