The EU publishes a “Maintenance and Alignment” regulation while the UK publishes a succession of amendments to its sanctions regime against Russia. | Pillsbury – Global Trade Law and Sanctions

EU Update
On July 21, 2022, the EU published its “maintenance and alignment” sanctions package. This latest set of measures aims to toughen existing sanctions, improve their implementation and increase their effectiveness. In summary, this latest package has the following effects:

  • Expand the list of restricted items that can contribute to Russia’s military and technological improvement. The newly covered products are included in Annex II of Regulation (EU) 2022/1269 and include among others: (i) multiple data stream processing technology; (ii) law enforcement/military items; (iii) oil and gas exploration property and technology; (iv) medical products; (v) chemicals; (vi) nanomaterials such as semiconductor nanomaterials and carbon nanotubes; (vii) concealed object detection equipment; and (viii) robots capable of employing real-time feedback to generate or modify digital program data.
  • Introduction of an import ban on Russian gold (including listed gold products that are processed in a third country, which incorporate Russian gold.)
  • Introduce additional procedural obligations such as:
    • entities relying on export waivers must notify the competent authority of the Member State;
    • Member State authorities must inform other Member States and the EU of authorizations issued;
    • the “cybersecurity and information security” exemption for military and technological goods now requires authorization before it can be invoked; and
    • persons and entities subject to an asset freeze must declare all their assets to the competent authority of the Member State and cooperate in any exercise undertaken by the authority to verify such disclosures.
  • Allow the provision of technical assistance relating to “aeronautical and space industry” goods insofar as they relate to the establishment of technical standards within the framework of the International Civil Aviation Organization.
  • Amend exemptions to the Article 5aa prohibition on dealing with public entities to ensure they do not impede the purchase of key resources (natural gas, titanium, aluminum) and pharmaceutical, medical and agricultural. A derogation has also been added concerning the freezing of assets against certain banks for transactions related to the purchase, import or transport of agricultural or food products.
  • Refine certain prohibitions to avoid circumvention. In particular, the port ban has been extended to also cover locks and the “€100,000 deposit limit” restriction has been extended to companies owned (more than 50%) by Russian nationals.
  • Designate additional targets for an asset freeze, including Sberbank.

The EU is also exploring other methods to strengthen sanctions enforcement, having requested reports from member states on their sanctions enforcement regimes, leaving the door open for a European version of OFAC.

Following a proposal by the European Commission, the European Parliament consented (on July 7, 2022) to identify the violation of EU sanctions as an EU crime. EU crimes currently cover things like terrorism; human, drug and arms trafficking; money laundering and organized crime; and the sexual exploitation of women and minors. Adding penalty violations would allow the EU to establish harmonized minimum rules regarding the interpretation of penalties and the establishment of consistent penalties. This would mitigate the extent to which some jurisdictions might be seen as more lax than others on sanctions and would be a major development, eliminating the current ‘patchwork’ approach to enforcement across the Union.

Unsurprisingly, the EU also renewed its sectoral sanctions against Russia (which were due to expire on July 31, 2022) for another six months.

UK Update
The UK has also focused its attention on refining its existing sanctions regime. Between July 15 and July 21, 2022, the UK published four amendments to its sanctions regime against Russia (amending Regulations Nos 11 to 14) as well as updates to its customs regulations. Among others, these new regulations:

  • Extend trade restrictions against Russia to also cover:
    • “G7 Dependency and Other Goods” as listed in Schedule 3E;
    • Russian gold imports;
    • Russian oil and fossil fuel imports (with staggered implementation until December 31, 2022); and
    • a range of other commodities in the areas of shipping and maritime communications, military, defense and security, interception and surveillance, banknotes, oil refining and energy-related industries (listed in the annexes of amending regulation No. 11).
  • Update the list of products from Russia and Belarus that are subject to additional tariffs.
  • Extend the restrictions applicable to steel products to also cover services related to these products.
  • Implement the highly anticipated service bancovering the provision of accounting services, business and management consulting services and public relations services to Russia (first announced in May 2022).
  • Implement the investment ban (first announced in April 2022). Under the ban, British companies are prohibited from acquiring land in Russia or stakes in Russian companies, or establishing joint ventures, offices, branches or subsidiaries in Russia.
  • Amend existing restrictions on technical assistance for aircraft to exempt technical assistance needed for temporarily detained aircraft belonging to persons suspected of having frozen their assets.
  • The UK has also changed its asset freeze designation criteria and designated new individuals and entities for the purposes of an asset freeze through regular financial penalty notices.

In addition, from 5 July 2022, the UK sanctions regime in Belarus has been amended to align more closely with the measures in place against Russia. The criteria for designating the assets freeze under the Belarusian regime have been expanded to allow targeting of individuals or entities to encourage the Belarusian government to stop destabilizing Ukraine and supporting Russian actions.

The UK is also reportedly considering the possibility of confiscating frozen Russian assets for transfer to Ukraine. British Foreign Secretary Liz Truss said she “supports the concept” of following Canada’s lead and seizing Russian assets in the UK in order to transfer them to Ukraine on the condition that they do so. understand “the details”. ”

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