EU Imposes Second, Third and Fourth Sanctions Packages Against Russia in Ukraine Crisis

EU Imposes Second, Third and Fourth Sanctions Packages Against Russia in Ukraine Crisis

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The EU has ordered further sanctions in response to Russia’s ongoing large-scale invasion of Ukraine. The new sanctions mainly focus on restricting Russia’s ability to purchase certain goods and are designed to have a sensitive impact on the flows of funds towards the Russian state, its government and certain individuals.

By taking these measures the EU is continuing and tightening the sanctions of 23 February 2022. Sanctions affecting certain individuals and goods were imposed and Russia’s access to the capital and financial markets in the EU after Russia recognised the Ukrainian regions of Donetsk and Luhansk as independent states. Russia’s access to the capital and financial markets in the EU was restricted.

Second sanctions package of 25/26 February 2022

When Russia started its military aggression against Ukraine on 24 February 2022, the EU agreed on a second round of measures containing additional sanctions designed to put pressure on the country and its economy. These concern the financial sector, the defence sector, the energy sector and the transport, but also affect President Vladimir Putin and his Foreign Minister Sergey Lavrov personally. The relevant Regulations (here and here) came into force on 25/26 February 2022 and contain the following measures:

Sanctions in the financial sector

Existing financial sanctions are being tightened in order to cut Russia off from the most important capital markets. New measures include bans on trading and services related to transferable securities and money-market instruments of credit institutions and other companies under public control and on accepting large deposits from Russian nationals or individuals and legal entities resident in Russia (Articles 5 and 5a of newly amended Regulation (EU) No 833/2014).

Goods-related sanctions

The ban on exports of dual-use goods has been tightened and no longer depends on an intention to use them for military purposes (Article 2 of newly amended Regulation (EU) No 833/2014).

It is also prohibited to sell, supply, transfer or export goods and technology to Russia which might contribute to Russia’s military and technological enhancement or the development of its defence and security sector (Article 2a of newly amended Regulation (EU) No 833/2014with new Annex VII).

Goods-related restrictions now apply to the sale, supply, transfer and export of certain goods and technology for use in oil refining as well as restrictions on services in this field (Article 3b of newly amended Regulation (EU) No 833/2014with new Annex X).

Alongside this, now exports of goods, technology and services in the aviation and space industry are banned (Article 3c of newly amended Regulation (EU) No 833/2014with new Annex XI).

Travel and financial sanctions

The second package of sanctions also extends the list of persons subject to travel and financial sanctions. Individuals now additionally listed include Russian President Vladimir Putin and Russian Foreign Minister Sergey Lavrov (extended Annex I to the latest version of Regulation (EU) No 269/2014).

Third sanctions package of 27 February 2022

Immediately after issuing the second round of sanctions, the EU Member States consulted on a third package of sanctions against Russia. Some of these measures came into effect straight away on 28 February 2022.

In the Regulation of 28 February 2022, the EU closed off its airspace for aircraft owned by Russian air carriers or individuals and legal entities resident in Russia (Article 3d of newly amended Regulation (EU) No 833/2014and resolved further sanctions against the Russian central bank, notably a freeze on its international reserves (Article 5a(4) to (6) of newly amended Regulation (EU) No 833/2014).

Moreover, targeted restrictions on access by Russian banks to the international bank payment network SWIFT is on the cards; a legal act setting out the exact form of this measure is not available yet.

Fourth sanctions package of 28 February 2022

Finally, the EU Member States also just issued a fourth round of sanctions on 28 February 2022 including additional individuals, mainly oligarchs and businesspersons from the energy sector, in the sanctions list.

By Barbel Sachs, Partner, Bjorn Paulsen, Partner, Christian Pelz, Partner, and Theresa Bachmann, Associate, Noerr