European Union Imposes Second Round of Export Controls & Sanctions on Russia
Following similar measures imposed by the United States, the European Union imposed an array of new export controls and sanctions targeting Russia.
Regulation (EU) 2022/328 amends Regulation (EU) 833/2014 to ban trade in most dual-use goods and technology, impose new controls on items that may contribute to Russia’s military and technological enhancement, and limit export of items that support the Russian energy, aviation, and space industries. The measure also imposes extensive sanctions limiting Russian access to EU capital markets, loans and credit, public financing, and banking services.
Restricting Trade in Dual-Use ItemsDual-Use Export Ban
The EU measure generally prohibits the sale, supply, transfer or export, directly or indirectly, of “dual-use goods and technology” to Russia. The list of “dual-use goods and technology” subject to these restrictions is located in Annex I to Regulation (EU) 2021/821, and captures items classified under the following categories of multilateral controls:
- Nuclear materials, facilities and equipment
- Special materials and related equipment
- Materials processing
- Telecommunications and “information security”
- Sensors and lasers
- Navigation and avionics
- Aerospace and propulsion
The trade restrictions apply whether or not the underlying goods and technology originate in the European Union, and are accompanied by restrictions on related technical assistance, brokering services, or other services, including financial services.
Restricting Contributions to Russia’s Military or Technological Enhancement
In addition to the broad dual-use export ban, the rules prohibit the sale, supply, transfer or export, directly or indirectly, of enumerated goods and technologies which might contribute to Russia’s military or technological enhancement, or the development of Russia’s defense and security sector.
The list of applicable goods and technologies are set out in Annex VII. The list closely mirrors certain 900 series U.S. Export Control Classification Numbers (ECCNs) in Categories 3 through 9 of the U.S. Commerce Control List, including those related to semiconductors and semiconductor production.
Oil Refining, Aviation, & Space Industries
The EU measure also prohibits exports to Russia of specified goods and technology suited for use in oil refining, aviation, and space industries. The goods and technologies subject to these restrictions are laid out in Annexes X and XI, respectively, and include restrictions on the provision of related services.
New Financial Sanctions
The measure contains a number of expanded and new financial sanctions targeting the Russian market. These include:
- Securities & money-market instruments: The measure expands preexisting restrictions to prohibit dealings in any transferable securities or money-market instruments issued after April 12, 2022 involving lists of specified Russian entities.
- Loans: The measure prohibits the extension of any new loans or credit to specified parties (expanded from restrictions on dealings in debt with maturities of 30 days or more) and expands the list of sanctioned parties.
- Public financing: The measure prohibits the provision of public financing or financial assistance for certain trade with, or investment in, Russia, with some exception for commitments established prior to February 26, 2022, projects involving small and medium-sized EU establishments, and projects for agricultural, medical or humanitarian purposes.
- Deposits: The measure prohibits accepting any deposits from Russian nationals or natural persons residing in Russia, or legal persons established in Russia, if the total value of the deposits exceed 100,000 EUR by the person per credit institution. The measure does not apply to nationals of Member States or to natural persons who reside in Member States and does not apply to deposits that are necessary for non-prohibited cross border trade between Russia and the EU.
- Euro-denominated securities: The measure prohibits the sale of euro-denominated transferable securities issued after April 12, 2022 to any Russian national, any natural person in Russia, and any Russian legal person. The prohibition includes the sale of units of collective investment undertakings providing exposure to such securities. The provision does not apply to Member State nationals or residents.
- Listing restrictions: The measure prohibits the listing of transferable securities of Russian legal entities or bodies having more than 50 percent public ownership on EU-registered or recognized trading venues, effective April 12, 2022 and the provision of services on those venues.
- Investment services: The measure prohibits the purchase, sell, provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments issued after 12 April 2022 of specified entities.
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