On 3 June 2022, the EU announced it has adopted a sixth package of restrictive measures against the Russian Federation as it continues its aggression against Ukraine. The latest package also imposes further sanctions on Belarus considering its involvement in this aggression.
Oil import restrictions
A complete import ban has been imposed on all Russian seaborne crude oil and petroleum products. However, this does not mean a complete ban on all Russian oil imports into the Union; The ban covers 90% of current oil imports from Russia.
An exemption for pipeline crude oil has been adopted as some of the Member States, in particular eastern European countries like Hungary, Slovakia or Czech Republic, have a specific pipeline dependency on Russia. Therefore, they have been given a temporary exemption and will continue to receive crude oil delivered by pipeline until the Council resolves otherwise. However, after a transitory period of eight months, these Member States will not be able to resell the crude oil and petroleum products imported via pipeline to other Member States or to any third countries. This shall ensure a level playing field between the Member States.
However, the embargo does not come into effect overnight; The ban is subject to certain transition periods, which shall allow the EU and its partners to secure alternative supplies and minimize the impact on global oil prices. The transition periods are 6 months for crude oil and 8 months for other refined petroleum products.
Further, the prohibition does not apply to crude oil and petroleum products which 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.
In 2021 alone, the EU imported € 48 billion worth of crude oil and € 23 billion of refined oil products from Russia. Therefore, the impact of this ban on Russia should be significant, as the export to the EU constitutes about half of Russia’s total oil exports.
Moreover, new prohibitions regarding oil transport services have been adopted. EU operators will no longer be allowed to finance and insure the transport of oil to third countries, in particular through maritime routes. The restriction is subject to a 6-month transition period. Since EU operators are significant providers of such transport services, the prohibition will make it particularly challenging for Russia to continue exporting crude oil and petroleum products to the rest of the world.
The EU has expanded the list of advanced technology items banned from being exported to Russia to include additional chemicals, which could be used for manufacturing of chemical weapons. These chemicals have been under control since 2013 with respect to Syria. Certain exemptions apply.
This ban represents around € 663 million of EU exports to Russia.
Financial and business services measures
Three Russian banks, Sberbank, Credit Bank of Moscow and Russian Agricultural Bank, and one Belarusian bank, Belinvestbank, also known as the Bank for Development and Reconstruction, have been removed from SWIFT. The removal effectively took place on 14 June 2022.
Moreover, the provision of certain services such as accounting, auditing, including statutory audit, bookkeeping and tax consulting services, business and management consulting, and public relations services to the Russian government, as well as to legal persons, entities or bodies established in Russia are now prohibited.
The prohibition does not apply to the provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body, which is incorporated or constituted under the law of a Member State.Therefore, a wholly owned Russian subsidiary of an EU incorporated company would be able to benefit from this exception.
Further, certain restrictions with regard to trusts (trust funds) and similar legal arrangements, whose founders and / or beneficiaries are Russian nationals, legal persons established in Russia or legal entities owned, controlled or acting on behalf of the aforementioned persons, have been adopted . It is prohibited to register, provide a registered office (or business or administrative address) and provide management services to such trusts. However, the restrictions shall not apply if the trustee or beneficiary is a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State. It follows that the exemption cannot apply in case the founder or the beneficiary is a legal person.
The broadcasting activities of three Russian state outlets, who are among the Kremlin’s most important disinformation channels, specifically targeting audiences in Ukraine and the EU, have been suspended. Namely, they are Rossiya RTR / RTR Planeta, Rossiya 24 / Russia 24, and TV Center International. These outlets are barred from distributing their content across the EU by any means, such as cable, via satellite, the internet or via smartphone apps. Moreover, the advertising of products or services on these sanctioned outlets has also been prohibited.
Additional 65 individuals and 18 entities have been sanctioned. Among the 65 listed individuals are military officials politicians, propagandists, leading businesspersons and family members of already sanctioned individuals.
Among the 18 sanctioned entities are several companies supporting the Armed Forces and the Government of the Russian Federation, including Russia’s largest securities depository, the National Settlement Depository.
As of 21 June 2022, the EU restrictive measures apply to a total of 1,158 individuals and 98 entities, who are subject to freeze an asset and EU persons are forbidden from making funds available to them. Moreover, natural persons are subject to a travel ban, which prevents them from entering or transiting through the territory of the EU.