Overview of EU’s 11th sanctions package against Russia

On 23 June 2023, the European Union (EU) has adopted its eleventh sanctions package in relation to Russia. Please refer to EU relevant Regulations and Council decisions for their full content and to your usual contact at Simmons & Simmons for any further information or advice.

This package includes new measures summarized below.

Anti-circumvention tool

Based on this “anti-circumvention tool”, 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. The “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.

Additional listings of entities and individuals

87 new entities are added to the list of those directly supporting Russian Federation’s military and industrial complex in its war against Ukraine. These entities are subject to tighter export restrictions for dual-use and advanced technology items. In addition to the Russian and Iranian entities already listed, this now also covers entities registered in China, Uzbekistan, the United Arab Emirates, Syria as well as Armenia.

Over new 100 additional individuals and entities are subject to asset freezes. This includes senior military officials, decision-makers on the war, persons involved in the illegal deportation of Ukrainian children to Russian Federation, judges who took politically motivated decisions against Ukrainian citizens, persons responsible for the looting of cultural heritage, businesspersons, propagandists, as well as Russian IT companies providing critical technology and software to the Russian intelligence, banks operating in the occupied territories and entities working with the Russian Federation armed forces.

Trade measures

The key new measures are the following:

• Bilateral and multilateral cooperation with third countries to impede sanctions’ circumvention with an extension of the transit prohibition for certain sensitive goods (e.g. advanced technology, aviation-related materials) exported from the EU to third countries;
• Tightening export restrictions by requiring importers of sanctioned iron and steel goods that have been processed in a third country to prove that the inputs used do not come from Russian Federation;
• Restriction on the exports of further 15 technological items that could contribute to the technological enhancement of Russian Federation’s defence and security sector to include electronic components, semiconductor materials, manufacturing and testing equipment for electronic integrated circuits and printed circuit boards, precursors to energetic materials and precursors to chemical weapons, optical components, navigational instruments, metals used in the defence sector and marine equipment;
• Prohibition to sell, license, transfer or refer intellectual property rights and trade secrets used in connection with restricted goods to prevent the sanctioned goods from simply being manufactured outside the EU; and
• Ban on export of luxury cars to all new and second-hand cars above a certain engine size (> 1900 cm3) and all electric and hybrid vehicles, as well as a full ban on certain types of machinery components.

Energy sector

The most important measure relates to the end of the possibility to import Russian oil by pipeline for Germany and Poland.

There are also insertions of strict and very targeted derogations to the existing export bans to enable the maintenance of the Caspian Pipeline Consortium (CPC), which is a pipeline that transports Kazakh oil to the EU through Russian Federation.

Transport measures

It is now 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
• Access EU ports for vessels that have not notifed 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.

A full ban on trucks with Russian trailers and semi-trailers that are transporting goods to the EU has also come into effect. It will clamp down on the circumvention of the prohibition for Russian freight road operators to carry goods in the EU.

Media

The broadcasting licence of RT Balkan, Oriental Review, Tsargrad, New Eastern Outlook and Katehon are now suspended.