Adoption of EU’s 12th sanctions package against Russia

On 18 December 2023, the European Union (EU) has adopted its twelfth package of economic and individual sanctions 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.

The main new measures of the twelfth package are summarized below.

Anti-circumvention and enforcement

In order to limit circumvention, a new ban is introduced regarding Russian nationals from owning, controlling or holding any posts on the governing bodies of the legal persons, entities or bodies providing crypto-asset wallet, account or custody services to Russian persons and residents.

New notification requirements are imposed for the transfer of funds outside the EU by any entity established in the EU that is owned or controlled (directly or indirectly) by more than 40% by an entity established in Russia, or by a Russian national or natural person residing in Russia.

Additionally, the current transit ban applying to dual use goods and technologies exported from the EU to third countries through the territory of Russia is extended to all battlefield goods.

Energy sector

A tighter compliance mechanism is introduced to support the implementation of the oil price cap and to challenge circumvention.

New notification measures are also introduced to more closely monitor the sale of tankers to any third country in order to make more transparent their sale and export, in particular in the case of second-hand carriers that could be used to evade the import ban on Russian crude or petroleum products and the G7 Price Cap.

Furthermore, a new import ban is introduced on liquified petroleum gas (LPG) with a 12-month transitional period.

Trade, import and export measures

The key new measures are the following:

• Import ban on raw materials for steel production, processed aluminium products as well as other metal goods;

• Restrictions on imports of goods which generate significant revenues for Russia and enable the continuation of the war, such pig iron and, copper wires, aluminium wires, foil, tubes and pipes;

• Widening the list of restricted items that could contribute to the technological enhancement of Russia's defence and security sector to include chemicals, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles (UAV), machine tools and machinery parts; and

• Ban on the direct or indirect import, purchase or transfer of diamonds from Russia, applying to diamonds originating in Russia, diamonds exported from Russia, diamonds transiting Russia and Russian diamonds when processed in third countries. A direct ban applies to non-industrial natural and synthetic diamonds as well as diamond jewellery, as of 01 January 2024. An indirect import ban of Russian diamonds when processed (cut and/or polished) in third countries, including jewellery incorporating diamonds originating in Russia, will be phased in progressively as of 01 March 2024 and be completed by 01 September 2024.

It is also now required from EU exporters to contractually prohibit re-exportation to Russia and re-exportation for use in Russia of particularly sensitive goods and technology, when selling, supplying, transferring or exporting to a third country, with the exception of partner countries.

Additional listings of entities and individuals

29 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 goods and advanced technology items.

Over new 140 additional individuals and entities are subject to asset freezes. This includes those who have orchestrated the illegal so-called "elections" in the territories of Ukraine or those responsible for the forced "re-education" of Ukrainian children.

The EU has also agreed a new listing criterion to include persons who benefit from the forced transfer of ownership or control over Russian subsidiaries of EU companies.