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Export control and sanctions update: EU restrictive measures against Russia

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On 31 July 2014, the Council of the European Union (the “Council’) adopted Regulation (EU) No 833/2014 which implements Council Decision 2014/512/CFSP of 31 July 2014 (the “31 July Measures”). Also adopted are a series of measures relating to Crimea and Sevastopol and to the earlier asset freezing and visa bans (the “30 July Measures”)[1]. This follows the Council's Committee of Permanent Representatives’ (Coreper) agreement on further restrictive measures in response to Russia's actions regarding eastern Ukraine and is a response to increasing calls from the US and some Member States, including the UK, to target key sectors of the Russian economy. The President of the European Council, Herman Van Rompuy and the President of the European Commission, José Manuel Barroso, have released a statement which describes these measures as a "strong warning".

The 31 July Measures focus on sanctioning specific sectors of the Russian economy, namely the financial, energy and dual-use/military sectors. The 30 July Measures added a further 8 persons and 3 entities to the list of those subject to the visa ban and asset freezing sanctions which were passed on 25 July (please find our updates here and here).  The 30 July Measures also imposed sanctions which ban new investment, including finance and insurance services and key equipment, in the regions of Crimea and Sevastopol (1) for infrastructure projects in the transport, telecommunications and energy sectors and (2) in relation to the exploitation of oil, gas and minerals.

The most significant sanctions are the 31 July Measures which are explored in more detail below. It is important to note that there is a general exemption from the sanctions for contracts made before the date of the measures entering into force (1 August 2014), but in relation to the energy and dual-use sanctions, authorisation must still be sought.


Article 5 of Regulation 833/2014 bans the direct and indirect selling of transferable securities and money-market instruments with a maturity exceeding 90 days to the 5 major state-owned Russian banks as listed in Annex III of  Regulation 833/2014, their 50%+ owned subsidiaries or their agents. The banks listed are: Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank. This ban also covers related financial services as well, such as brokering, assistance in the issuance of, or any other dealing.

Brokering, transferable securities and money-market instruments are defined in Article 1(e), (f) and (g)  of Regulation 833/2014 respectively. The definitions are broad, covering the various instruments traded on financial markets and types of advice and brokering services which can be offered but does exclude shares in companies (or other securities equivalent to shares), bonds or other forms of securitised debt and other securities which give the right to acquire or sell any transferable securities or give rise to a cash settlement.

Businesses must therefore be careful to discover who may be behind a deal – for example, if the company with which they are dealing is 50% owned by a listed bank or is acting as agent for one of the banks.


Article 3 of Regulation 833/2014 states that energy-related equipment and technology, listed in Annex II of the Regulation, which is being exported to Russia of for use in Russia, is now subject to prior authorisation by a competent authority of each Member State – in the UK this is the Export Control Organisation (part of the Department for Business, Innovation & Skills). Licences will be denied if the goods are for deep water oil exploration and production, arctic oil exploration or production and shale oil projects in Russia.  This covers sales, supplies, transfers or exports and also applies to products originating from within or outside of the EU.

If a company is supplying under an agreement which was concluded before 1 August 2014 then authorisation can be given by the competent authority.


Council Decision 2014/512/CFSP provides for a general import and export ban of arms and related materiel to and from Russia.  This will apply to the extent that Member States do not already have an arms embargo against Russia in place.

Regulation 833/2014 also includes a ban on the direct or indirect provision of technical assistance, manufacture, maintenance, use and financial assistance or financing of items on the EU’s Common Military List. 

Further, Regulation 833/2014 prohibits: the sale, supply, transfer or export (directly or indirectly) of dual-use goods and technology (Annex I of Regulation 428/2009) which is either for the Russian military or is for military use in Russia; and the provision of direct or indirect technical assistance, manufacture, maintenance, use and financial assistance or financing of those items.

The measures allow for an exception (or in certain circumstances, for an authorisation to be granted) for agreements made before 1 August 2014.


Companies currently exporting, or considering exporting, directly or indirectly to Russia should closely monitor the EU and its Member States’ sanctions (which can also be imposed unilaterally) as these may well be extended if the political situation worsens.

We expect the UK to shortly implement legislation to deal with penalties arising from an infringement of Regulation 833/2014.

[1] Council Regulation (EU) No 825/2014 of 30 July 2014 amending Regulation (EU) No 692/2014, Council Implementing Regulation (EU) No 826/2014 of 30 July 2014 implementing Regulation (EU) No 269/2014, Council Decision 2014/507/CFSP of 30 July 2014 amending Decision 2014/386/CFSP and Council Decision 2014/508/CFSP of 30 July 2014 amending Decision 2014/145/CFSP