EU sanctions tracker: energy sector and products

Gas storage capacity

Council Decision 2023/434, accessible here, amending Decision 2014/512/CFSP.

EU Council press release.

It is prohibited to provide storage capacity in a storage facility to any Russian national or Russian entity, or to any entity whose proprietary rights are directly or indirectly owned for more than 50 % by any Russian entity or acting on behalf or at the direction of any Russian entity.

“Storage capacity” means any combination of space, injectability and deliverability. “Storage facility” means a facility used for the stocking of natural gas and owned and/or operated by a natural gas undertaking, but excluding the portion used for production operations, and excluding facilities reserved exclusively for transmission system operators in carrying out their functions.

LNG facilities used for storage are exempted from the prohibition.

The prohibition shall not apply to operations strictly necessary for the termination, by 27 March 2023, of contracts or ancillary contracts necessary for the execution of such contracts, which are not compliant with this prohibition and concluded before 26 February 2023.

Under specific conditions, Member States’ competent authorities could grant derogation.

Gas high prices

Council Regulation establishing a market correction mechanism to protect citizens and the economy against excessively high prices accessible here.

EU Council press release.

According to the European Council, Russia’s unjustified military aggression against Ukraine and its weaponization of energy have provoked an unprecedented energy crisis, leading to a sharp rise in energy prices, driving inflation and compromising the security of energy supply. Russia has engaged in intentional supply disruptions and manipulations, affecting European natural gas prices and the equilibrium of price formation in energy markets.

EU energy ministers reached a political agreement on a Council regulation which creates a temporary and well-targeted regulatory instrument to address the phenomenon of extreme price peaks caused by shortcomings in the price formation mechanisms of gas wholesale markets. The market correction mechanism, applicable as of 15 February 2023, will be automatically activated if the following market correction event occurs: (i) the month-ahead price on the Title Transfer Facility (TTF – which is a virtual market place where gas is being traded and where the short-term price of natural gas is determined) exceeds €180/MWh for three working days and (ii) the month-ahead TTF price is €35 higher than a reference price for LNG on global markets for the same three working days.

Council Regulation (EU) 2022/2474 accessible here, amending Article 3a of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

Extension of the existing prohibitions which target new investments in the Russian energy sector by adding the mining and quarrying sector. “Mining and quarrying sector” means a sector covering the location, extraction, management and processing activities relating to non-energy producing materials. It is now prohibited to:

• acquire any new or extend any existing participation in any Russian entity or any other third-country operating in the mining and quarrying sector in Russia;
• grant or be part of any arrangement to grant any new loan or credit or otherwise provide financing, including equity capital, to any Russian entity or any other third-country operating in the mining and quarrying sector in Russia, or for the purpose of financing any such Russian entity;
• create any new joint-venture with any Russian entity or any other third-country operating in the mining and quarrying sector in Russia;
• provide investment services directly related to the activities referred to the above.

The prohibition shall not apply to mining and quarrying activities that yield their highest value from, or have as their primary objective, the production of aluminium, including bauxite, chromium, cobalt, copper, iron ore mineral fertilisers, including potash and phosphate rock, molybdenum, nickel, palladium, rhodium, scandium, titanium, vanadium, heavy rare earths and light rare earths (as listed in Annex XXX of the Regulation 833/2014).

Council Regulation (EU) 2022/428 accessible here, replacing Article 3a of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

It is prohibited to:

• acquire any new or extend any existing participation in any Russian entity or any other third country operating in the energy sector in Russia;
• grant or be part of any arrangement to grant any new loan or credit or otherwise provide financing, including equity capital, to any Russian entity or any other third country operating in the energy sector in Russia, or for the documented purpose of financing such entity;
• create any new joint venture with any Russian entity or any other third country operating in the energy sector in Russia; and
• provide investment services in relation to the above.

Authorisations may be issued by competent authorities under specific conditions.

Council Regulation (EU) 2023/1214 accessible here, amending Article 3m of Regulation (EU) 833/2014 (consolidated version) and Council Decision (CFSP) 2023/1217 accessible here

The temporary derogation granted to Germany and Poland for the supply of crude oil by pipeline from Russia through the northern section of the Druzhba oil pipeline stops applying. The import of oil which originates in Kazakhstan or another third country and is transiting through Russia via the Druzhba oil pipeline is not prohibited.

Price caps for Russian petroleum products

EU Council press release

EU Council decided to set two price caps, applicable as of 5 February 2023, for petroleum products (customs tariff number CN 2710, originated in or exported from Russia). The price cap for petroleum products:

• traded at a discount to crude oil is set at USD 45 per barrel; and
• traded at a premium to crude is set at USD 100 per barrel.

At this price per barrel or below, petroleum products from Russia are exempted from the ban to provide maritime transport of petroleum products to third countries and the ban to provide technical assistance, brokering services or financing or financial assistance, in relation to the maritime transport of petroleum products to third countries.

In addition to the above, it was introduced a transitional period of 55 days for vessels carrying Russian petroleum products, purchased and loaded onto the vessel prior to 5 February 2023 and unloaded prior to 1st April 2023.

Council Regulation (EU) 2022/2474 accessible here, amending Article 3m of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

As from 5 February 2023, it shall be prohibited (i) to transfer or transport petroleum products falling under customs tariff number CN 2710 which are obtained from crude oil imported on the basis of a derogation granted by the Bulgarian competent authority to other Member States or to third countries, or (ii) to sell such petroleum products to purchasers in other Member States or in third countries.

Under specific conditions, the Bulgarian authorities could issue license to authorise such activity.

Introduction of specific derogation regarding Hungary’s and Slovakia’s competent authorities.

Price cap mechanism on Russian petroleum and oil

Council Decision (CFSP) 2022/2369 accessible here, amending Article 4p of Decision 2014/512/CFSP.

Council Regulation (EU) 2022/2367 accessible here, amending Article 3n of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

EU Council decided to set an oil price cap at USD 60 per barrel for Russian crude oil and petroleum oils (customs tariff number CN 2709 00, originated in or exported from Russia). It is prohibited to trade, broker or transport, including through ship-to-ship transfers, to third countries, crude oil or petroleum products, as of 5 February 2023, which originate in Russia or which have been exported from Russia.

At this price per barrel or below, crude oil from Russia is exempted from the ban to provide maritime transport and the ban to provide technical assistance, brokering services, financing or financial assistance, in relation to the maritime transport to third countries.

In addition to the above, it was introduced:

• a transition period of 45 days for vessels carrying crude oil originating in Russia, purchased and loaded onto the vessel prior to 5 December 2022 and unloaded at the final port of destination prior to 19 January 2023;
• as the price cap may be periodically reviewed to adapt to the market situation, a transition period of 90 days after any subsequent change in the price cap, to ensure coherent implementation of the price cap by all operators; and
• an exemption to the transport or provision of technical assistance, brokering services or financing or financial assistance, related to the transport necessary for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters.

Russian oil and petroleum products – transport

Council Regulation (EU) 2022/1904 accessible here, amending Article 3n of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

The exemption of the current prohibitions (see decision of 3 June 2022 below) has been extended for crude oil falling under customs tariff number CN 2709 00 and petroleum products falling under CN 2710 to the execution of contracts entered into before 4 June 2022 or of ancillary contracts necessary for the execution of such contracts until 5 December 2022.

Announcement regarding the implementation of the G7 oil price cap. It would take effect after 5 December 2022 for crude oil and 5 February 2023 for refined petroleum products, following a further decision by the Council.

Russian oil and petroleum products – trade restrictions

Council Regulation (EU) 2022/879 accessible here, introducing Articles 3m and 3n, and amending Article 5aa of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

It is prohibited to purchase, import or transfer, directly or indirectly, crude oil or petroleum products (as listed in Annex XXV), if they originate in Russia or are exported from Russia, as well as to provide, directly or indirectly, technical assistance, brokering services, financing or financial assistance or any other services related to this prohibition.

Beside specific derogations for Bulgaria and Croatia, the prohibitions do not apply:

• until 5 December 2022, to one-off transactions for near-term delivery, concluded and executed before that date, or to the execution of contracts for the purchase, import or transfer of goods falling under customs tariff number CN 2709 00 concluded before 4 June 2022, or of ancillary contracts necessary for the execution of such contracts, subject to a further notification requirement;
• until 5 February 2023, to one-off transactions for near-term delivery, concluded and executed before this date, or to the execution of contracts for the purchase, import or transfer of goods falling under customs tariff number CN 2710 concluded before 4 June 2022, or of ancillary contracts necessary for the execution of such contracts, subject to a further notification requirement;
• to the purchase, import or transfer of seaborne crude oil and of petroleum products where those goods originate in a third country and are only being loaded in, departing from or transiting through Russia, provided that both the origin and the owner of those goods are non-Russian;
• to crude oil falling under customs tariff number CN 2709 00 which is delivered by pipeline from Russia into Member States, until the Council decides otherwise.

It is also prohibited to provide, directly or indirectly, technical assistance, brokering services or financing or financial assistance, related to the transport, including through ship-to-ship transfers, to third countries of crude oil or petroleum products (as listed in Annex XXV) which originate in Russia or which have been exported from Russia. The prohibition in paragraph 1 shall not apply to (i) the execution until 5 December 2022 of contracts concluded before 4 June 2022, or of ancillary contracts necessary for the execution of such contracts or (ii) the transport of crude oil or petroleum products where those goods originate in a third country and are only being loaded in, departing from or transiting through Russia, provided that both the origin and the owner of those goods are non-Russian.

Furthermore, unless prohibited above, exemption for the transactions which are strictly necessary for the direct or indirect purchase, import or transport of natural gas and oil, including refined petroleum products, from or through Russia into the Union, a country member of the European Economic Area, Switzerland, or the Western Balkans.

Council Regulation (EU) 2022/576 accessible here, amending Article 3b of Regulation (EU) No 833/2014 (consolidated version).

Amendment regarding the prohibition to sell, supply, transfer, or export, directly or indirectly, goods and technology suited for use in oil refining introduced on 25 February 2022 to cover liquefaction of natural gas, whether or not originating in the Union, to any natural or legal person, entity or body in Russia or for use in Russia.

Council Regulation (EU) 2022/576 accessible here, introducing Article 3j in Regulation (EU) No 833/2014 (consolidated version).

It is prohibited to purchase, import, or transfer, directly or indirectly, coal and other solid fossil fuels, into the Union if they originate in Russia or are exported from Russia. The prohibitions do not apply to the execution until 10 August 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.

It also prohibited to provide technical assistance, brokering services or other services, financing or financial assistance in relation to the above prohibition.

From 8 April 2022, coal is no longer included in the derogation from the restrictions on investments in Russia’s energy sector as well as no longer included in the exemption on trade for certain goods and technology suited for oil exportation and production projects in Russia.

Council Regulation (EU) 2023/1214 accessible here, adding Article 3ec to Regulation (EU) 833/2014 (consolidated version) and Council Decision (CFSP) 2023/1217 accessible here

It is prohibited to:

• Access EU ports for vessels that engage in ship-to-ship transfers suspected to be in breach of the Russian oil import ban or of the G7 Coalition price cap, as well as for vessels which manipulate or turn off their navigation tracking system when transporting Russian oil subject to the oil import ban or G7 price cap; and
• From 24 July 2023, access EU ports for vessels that have not notified the competent authority at least 48 hours in advance about a ship-to-ship transfer occurring within the Exclusive Economic Zone of a Member State or within 12 nautical miles from the baseline of that Member State’s coast.

Council Regulation (EU) 2022/576 accessible here, introducing Article 3ea in Regulation (EU) No 833/2014 (consolidated version).

Prohibition to provide access after 16 April 2022 to ports in the territory of the Union to any vessel registered under the flag of Russia but authorisation may be granted under specific conditions to authorise a vessel to access a port for the transport into the Union of natural gas and oil, including refined petroleum products, nuclear fuel, coal and other solid fossil fuels, until 10 August 2022.
The same applies for road transport within the territory of the Union, including in transit, but does not apply, under specific conditions, until 16 April 2022 to the transport of goods that started before 9 April 2022.

Council Regulation (EU) 2022/576 accessible here, introducing Article 5k in Regulation (EU) No 833/2014 (consolidated version).

Prohibition to award or continue the execution of any public or concession contract falling within the scope of the public procurement Directives and certain other Directives, but authorisations may be granted for contracts intended for the purchase, import or transport of natural gas and oil, including refined petroleum products from or through Russia into the Union, as well as the purchase, import or transport into the Union of coal and other solid fossil fuels, until 10 August 2022.

Council Regulation (EU) 2022/428 accessible here, replacing Article 3 of Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

Amendment to the existing prohibition on trading certain goods suited for oil exploration – the prohibition does not apply if necessary for the transport of fossil fuels, in particular coal, oil and natural gas, from or through Russia into the Union; or for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment.
Also, the prohibition does not apply to the execution until 17 September 2022 of an obligation arising from a contract entered into before 16 March 2022.

Council Regulation (EU) accessible here, introducing Article 3b in Regulation (EU) No 833/2014 (consolidated version).

EU Council press release.

Prohibition to sell, supply, transfer or export, directly or indirectly, goods and technology suited for use in oil refining (as listed in Annex X), whether or not originating in the Union, to any Russian entity or for use in Russia.

The prohibition does not apply to the execution until 27 May 2022 of contracts concluded before 26 February 2022.

Specific derogations for medial, consumer and humanitarian purposes.

Council Regulation (EU) 2022/263, accessible here.

EU Council press release.

Trade prohibition of listed goods related to energy, the prospecting, exploration and production of oil, gas and mineral resources to the Donetsk and Luhansk oblasts.

EU Council press release

The EU will restrict the sale, supply, transfer or export of specified restricted goods and technology to certain third countries whose jurisdictions are considered to be at continued and particularly high risk of circumvention. This “anti-circumvention tool” would be used as an exceptional and last resort measure, meaning only when other individual measures and outreach by the EU to concerned third countries have been insufficient to prevent circumvention.

Proposal directive accessible here.

Further to Council’s decision to add the violation of restrictive measures to the list of ‘EU crimes’ (see decision of 28 November 2022 below), the European Commission proposed a directive on the definition of criminal offences and penalties for the violation of Union restrictive measures. Energy sector and products covered by the sanctions are therefore also covered by this proposal.

EU Council press release.

Since the implementation of the restrictive measures, it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the prohibitions. On 28 November 2022, EU Council adopted a decision to add the violation of restrictive measures to the list of ‘EU crimes’ included in the Treaty on the Functioning of the EU. Energy sector and products covered by the sanctions are therefore also covered by this decision.