Summer Edition | July 2024

New EU Sanctions

• EU Terrorist List: On 26 July 2024, the Council of the European Union (the "Council") added the entity “The Base” to the EU Terrorist List. The Base is an organisation of right-wing extremists involved in terrorist acts, founded by Rinaldo Nazzaro in 2018. The Council also renewed the list of persons, groups and entities subject to restrictive measures (sanctions) with a view to combatting terrorism, delisting one deceased person and maintaining the rest of the list unchanged. 15 persons and 22 groups and entities are now subject to these restrictions. Read more.
• Democratic Republic of the Congo: On 26 July 2024, the Council sanctioned nine individuals and one entity for acts that constitute serious human rights violations and abuses in the Democratic Republic of the Congo ("DRC"), and for sustaining the armed conflict, instability and insecurity in the Eastern DRC.? There are now 31 individuals and one entity sanctioned under this sanctions program. Read more.
• Global Human Rights: On 22 July 2024, the Council imposed sanctions on four individuals and two entities under the EU's Global Human Rights (GHR) sanctions program. The listings include (i) the chief of staff of the Syrian army, (ii) the previous Minister of Defense of Syria, and Deputy Commander-in-Chief of the Syrian Army, (iii) the Minister of State Security of the Democratic People’s Republic of Korea (DPRK), and (iv) the head of the so-called “penitentiary service”, as installed by Moscow in the temporarily occupied Kherson oblast in Ukraine. The two entities are a Haitian gang and a detention facility in North Hamgyong Province of the DPRK. 117 individuals and 33 entities are currently sanctioned under the GHR sanctions program. Read more.
• Russia: On 22 July 2024, The Council renewed EU sanctions in view of the Russian Federation's continuing actions destabilising the situation in Ukraine for a further 6 months, until 31 January 2025. Read more.
• Global Human Rights: On 15 July 2024, the Council sanctioned five persons and three entities under the GHR sanctions program. The listed individuals and entities are responsible for serious and systematic human rights abuses against Palestinians in the West Bank. Read more.
• Iran: On 15 July 2024, the Council extended until 27 July 2025 the EU sanctions in view of Iran’s military support for Russia’s war of aggression against Ukraine and for armed groups and entities in the Middle East and the Red Sea region. 12 persons and nine entities are currently sanctioned under this program. Read more.

NATO Update

On 9-11 July 2024, NATO allies met in Washington D.C. to mark the 75 years of the Alliance and "make key decisions on how to protect their one billion citizens as the world faces the most dangerous security environment since the Cold War."

The Washington Summit Declaration included several important statements relevant to sanctions and export controls, including:

• "Russia remains the most significant and direct threat to Allies’ security.?Terrorism, in all its forms and manifestations, is the most direct asymmetric threat to the security of our citizens and to international peace and prosperity.?The threats we face are global and interconnected."
• "Iran’s destabilising actions are affecting Euro-Atlantic security.?The People’s Republic of China’s (PRC) stated ambitions and coercive policies continue to challenge our interests, security and values.?The deepening strategic partnership between Russia and the PRC and their mutually reinforcing attempts to undercut and reshape the rules-based international order, are a cause for profound concern.?We are confronted by hybrid, cyber, space, and other threats and malicious activities from state and non-state actors."
• "There can be no impunity for Russian forces’ and officials’ abuses and violations of human rights, war crimes, and other violations of international law.? Russia is responsible for the deaths of thousands of civilians and has caused extensive damage to civilian infrastructure.? We condemn in the strongest possible terms Russia’s horrific attacks on the Ukrainian people, including on hospitals, on 8 July. Russia must immediately stop this war and completely and unconditionally withdraw all of its forces from Ukraine in line with UN General Assembly resolutions.? We will never recognise Russia’s illegal annexations of Ukrainian territory, including Crimea.? We also call on Russia to withdraw all of its forces from the Republic of Moldova and Georgia, stationed there without their consent."
• "We urge all countries not to provide any kind of assistance to Russia’s aggression.? We condemn all those who are facilitating and thereby prolonging Russia’s war in Ukraine."
• Belarus continues to enable this war by making available its territory and infrastructure."

The Democratic People’s Republic of Korea (DPRK) and Iran are fuelling Russia’s war of aggression against Ukraine by providing direct military support to Russia, such as munitions and uncrewed aerial vehicles (UAVs), which seriously impacts Euro-Atlantic security and undermines the global non-proliferation regime.? We strongly condemn the DPRK’s exports of artillery shells and ballistic missiles, which are in violation of numerous United Nations Security Council resolutions, and note with great concern the deepening ties between the DPRK and Russia.? Any transfer of ballistic missiles and related technology by Iran to Russia would represent a substantial escalation.

The PRC has become a decisive enabler of Russia’s war against Ukraine through its so-called “no limits” partnership and its large-scale support for Russia’s defence industrial base.? This increases the threat Russia poses to its neighbours and to Euro-Atlantic security.? We call on the PRC, as a permanent member of the United Nations Security Council with a particular responsibility to uphold the purposes and principles of the UN Charter, to cease all material and political support to Russia’s war effort.? This includes the transfer of dual-use materials, such as weapons components, equipment, and raw materials that serve as inputs for Russia’s defence sector.? The PRC cannot enable the largest war in Europe in recent history without this negatively impacting its interests and reputation.

NATO also made a Pledge of Long-Term Security Assistance for Ukraine which noted that in addition to military support covered by this pledge, Allies intend to continue providing political, economic, financial, and humanitarian support to Ukraine.

First transfer of proceeds from frozen Russian assets in the EU to Ukraine

On 26 July 2024, the EU made the first transfer of €1.5 billion generated from immobilised (sanctioned) Russian assets. These windfall profits held by central securities depositories (CSDs) will be channelled through the European Peace Facility and to the Ukraine Facility to support Ukraine's military capabilities as well as to support the country's reconstruction. Read more.

Statement on export controls and restrictions against Russia

On 10 July 2024, the European Commission hosted a meeting with representatives from Japan, the UK and the U.S. to "discuss ongoing efforts to align and enhance our export restriction measures imposed in response to Russia’s illegal invasion of Ukraine." The statement released following the meeting noted (emphasis added):

• "As Russia intensifies illicit procurement attempts, it must not be given access to those items needed to manufacture its weapons and supply its military —either directly from the coalition of partner nations, or indirectly through transshipment networks often involving non-sanctioning third countries. Companies that seek to profit from selling coalition commodities, software and technology into Russia do so at our collective expense."
• "Our services will continue enhancing and expanding, as appropriate, regulatory requirements in light of information from the battlefield, in order to maintain the effectiveness of our measures. Our national competent authorities will continue to hold those who violate our laws accountable."
• "We are grateful for the efforts of industry to devote appropriate resources to know their customers and counter the risks of illegal transshipment. We have collectively developed specific tools to support industry compliance, such as the Common High Priority List (CHPL) of battlefield items. We are also actively identifying companies associated with Russia’s military-industrial complex and involved in the circumvention of our measures. We will continue issuing public guidance to improve the reach and effect of our export restrictions imposed in response to Russia’s illegal invasion of Ukraine."?
• "We encourage industry to take advantage of the very significant information and guidance issued to improve its compliance screening.? We call on responsible traders to improve export compliance systems and exercise enhanced due diligence. This includes making efficient use of sources such as public business registries, commercially available trade databases, and information collected by non-profit organizations to identify companies that present a high risk of future diversion. These would notably include?companies with a prior record of diverting controlled items from our substantially aligned export control systems to Russia.?
• The ability of industry to identify high-risk transactions can make a difference. Our collective actions will be both complementary and coordinated so that we continue to effectively address this ongoing threat to international security."

New EU Compliance Guidelines

On 26 July 2024, the European Commission published a new version of its Consolidated FAQs (now over 400 pages long).

• The the 40+ July updates include new information under the following FAQ headers: (i) general questions, (ii) central securities depositories, (iii) export related restrictions for dual-use goods and advanced technologies, (iv) iron and steel products processed in third countries incorporating iron and steel inputs from Russia, (v) oblasts, (vi) divestments from Russia, (vii) "no re-export to Russia" clause, (viii) state-owned enterprises, (ix) provision of services, (x) chemicals, and (xi) targeted vessels. The correlation table was also updated.

On 3 July 2024, the Council published its revised Update of the EU Best Practices for the effective implementation of restrictive measures (“Best Practices”).

• The Best Practices include, among other things, updates to the (i) "ownership", (ii) "control" tests, with new thresholds and red flags respectively, and (iii) clarifies the notion of "acting on behalf or at the direction of," which should be assessed independently of ownership and control.

Judgements of the General Court

In July 2024, the General Court rendered four judgements in the area of EU sanctions in relation to the Russia, DRC and Syria sanctions programs.

• Judgement of the General Court (Fourth Chamber) of 10 July 2024, Boshab v. Council, Case T-89/23.
• Judgement of the General Court (Fourth Chamber) of 10 July 2024, Kande Mupompa v Council, Case T-88/23.
• Judgement of the General Court (First Chamber) of 10 July 2024, Rashevsky v Council, Case T-309/22.
• Judgement of the General Court (First Chamber) of 03 July 2024, Mazepin v Council Case T-742/22.

Looking Ahead

Following the June 2024 European elections, on 18 July 2024, the European Parliament elected Ursula von der Leyen as President of the European Commission for a second term (2024-2029). On 27 June 2024, the European Council had nominated Kaja Kallas as the candidate for High Representative of the Union for Foreign Affairs and Security Policy.

The political guidelines for the next European Commission notes, among other things (emphasis added):

• "Europe needs to be more assertive in pursuing its strategic interests. Russia’s war of aggression – driven by Putin’s imperial desire to destroy Ukraine and its European future – is part of a wider, systematic attack on Europe, our values and on the rules-based international order."
• We have entered an age of geostrategic rivalries. The more aggressive posture and unfair economic competition from China, its “no-limits” friendship with Russia - and the dynamics of its relationship with Europe – reflect a shift from cooperation to competition."
• "This new reality will endure whatever the outcome of elections across the world in the coming months. Our new foreign and security policy must be designed with this unfiltered reality in mind."
• "We must also work on integrated deterrence. With this in mind, we will strengthen our strategic approach to sanctions to ensure that we can react flexibly to new threats. This will look at how our sanctions framework against cyberattacks can be expanded and how a new sanctions regime against hybrid attacks on the EU and its Member States could work."
• "This includes our collective efforts to deploy the full range of our combined statecraft to deter China from unilaterally changing the status quo by military means, particularly over Taiwan."

The guidelines also call for a new economic foreign policy which would advance Europe’s economic security and economic statecraft.

In a 24 July 2024 op-ed for the The Guardian , eight European Finance Ministers (Sweden, Denmark, Estonia, Finland, Latvia, Lithuania, Netherlands, and Poland) called for additional EU sanctions against Russia while increasing the pressure on major enablers of circumvention. At the same time, concerns were raised over the uneven burden among Member States to enforce existing measures.

EU Agenda

There are no Council meetings scheduled until Monday 23 September 2024. However, there will be an informal meeting of the Foreign Affairs Ministers on 28-29 August 2024.

The Coreper II will resume its meetings on 4 September 2024. The next Foreign Affairs Council will take place on 14 October 2024. The European Council will meet on 17-18 October 2024.

Upcoming Executive Training on EU Sanctions

The School of Transnational Governance at the European University Institute will host the fourth edition of its executive training program "Making Sanctions Work" in the fall of 2024.

The program is designed and delivered by EU policymakers, judges, leading academics, and compliance professionals, participants will acquire an analytical and practical toolkit for understanding sanctions from various angles – legal, economic, political – and for evaluating their effectiveness. The application period is open until 25 October 2024. Read more.