Europe

Following below are further details on the sanctions imposed by the European Union and other information of interest.

The EU has been imposing sanctions and restrictive measures against Russia since 2014 following their invasion of Crimea. This European Council infographic provides an excellent summary of the types of sanctions imposed.

The most recent measures agreed at EU Council level on the current crisis can be accessed  here .Six  packages of sanctions have been adopted to date ,the latest measures were adopted in early June 2022. The European Commission has now set up a dedicated webpage, entitled Sanctions adopted following Russia’s military aggression against Ukraine, which contains information on the various sanctions adopted, including Frequently Asked Questions. The page is regularly updated at the moment and the FAQs are divided into the following headings which can be accessed from the drop down menu on the European Commission pages:

Horizontal
Individual financial measures
Finance and banking
Trade and customs
Other fields 

The EU list of sanctions is available on the Irish Central Bank’s website Financial Sanctions Updates 2022. The situation is very fast moving and members are reminded to check these on a frequent basis. 

Sixth package of EU Sanctions

On 3 June 2022 the European Commission issued a press release announcing adoption of the sixth package of sanctions against Russia. This package also imposes further sanctions against Belarus considering its involvement in the aggression.

This 6th package of measures include:

•       A ban on the provision of insurance or reinsurance to the maritime transport of Russian oil to third countries;

•       A ban on providing certain business relevant services-directly or indirectly -such as accounting, auditing, including  statutory audit, bookkeeping and tax consulting services, business and management consulting and public relations services to the Government of Russia as well as to legal persons entities or bodies established in Russia;

        A wide variety of chemicals, including items used as precursors to the creation of chemical weapons, will be banned from sale to Russia;

•       The import of goods such as wood, rubber, cement, fertilizer and ingredients used to manufacture fertilizer from Russia and Belarus is banned;

•       65 additional Russian individuals and 18 entities have been made subject to asset freezes and travel bans;

•       12 Belarusian individuals and 8 entities have been made subject to asset freezes and travel bans;

•       3 Russian banks: Sberbank, Credit Bank of Moscow and JSC Rosselkhozbank; and 1 Belarusian bank: Belinvestbank, are removed from SWIFT;

•       3 additional Russian TV stations are subject to a broadcast ban - Rossiya RTR/RTR Planeta, Russia 24 and TV Centre International; and

•       RT and Sputnik will also be subject to an advertising ban;

A general prohibition has been introduced on the import and transport of Russian crude oil and petrol products for all EU Member States. A lead-in period of six months has been provided for crude oil and eight months for petrol products, after which the import of such products will be prohibited. Some member states have received derogations from this measure due to their geographic location or their over-reliance on Russian fuel.

Trusts

The fifth package of sanctions adopted a prohibition on providing advice on trusts to wealthy Russians. Following discussions with the EU Commission and discussions amongst Member States, agreement was reached to amend that measure. The position is now that certain types of trust, detailed below, can apply to the competent authorities for a derogation from the sanction. The Dept of Finance information advises that trusts will have 30 days from 3 June 2022  to make such an application. The three Irish competent authorities are the Department of Foreign Affairs, Department of Enterprise, Trade & Employment and the Central Bank of Ireland. At the time of writing there is no information about which (or if all three) competent authority will be providing the application facility for trusts; nor is there information about what information a trust will have to provide in order to successfully secure a derogation. The trust types eligible for a derogation are:

•       occupational pension schemes;

•       insurance policies;

•       employee share schemes;

•       charities;

•       amateur sports clubs;

•       funds for minors or vulnerable adults.

In addition, trustees and TCSPs have been given an additional month - to 5 July 2022 - to cease all operations with trusts that remain within the remit of the sanction.

Please see here for a Q&A on the sixth package of sanctions.

In relation to the ban on accounting services, Chartered Accountants Ireland has recently issued a news piece on this which includes links to some further useful information on the matter .You can click here to access this information.

On 21 April 2022 the EU adopted restrictive measures against two further individuals within the existing sanctions framework .EU restrictive measures regarding the undermining of territorial integrity of Ukraine now apply to a total of 1093 persons and 80 entities.

Fifth package of EU Sanctions

On 8 April 2022 the EU adopted a fifth package of restrictive measures against Russia. The package contains the following six elements (summarised from the information available on the European Commission website and information made available to us from the Dept. of Finance):

 1. A coal ban. An import ban on all forms of Russian coal from 10 August 2022.

 2. Financial measures

• A full transaction ban and asset freeze on four Russian banks These four banks will now be fully excluded from the EU market. The banks affected are Otkritie, Novikombank, Sovkombank and VTB.
• A prohibition on providing high-value crypto-asset services to Russia.
• A prohibition on being a beneficiary ,acting as a trustee or in similar capacities for Russian persons and entities as well as a prohibition on providing certain services to trusts has been introduced.(You can read some more information about this here).

 3. Transport

• A full ban on Russian and Belarusian freight road operators working in the EU. Certain exemptions will cover essentials, such as agricultural and food products, humanitarian aid as well as energy.
• An entry ban on Russian-flagged vessels to EU ports.This includes yachts and recreational craft. Exemptions apply for medical, food, energy, and humanitarian purposes, amongst others.

4. Targeted export bans. Worth €10 billion in areas in which Russia is vulnerable due to its high dependency on EU supplies including for example sensitive machinery, transportation and chemicals. Jet fuel and fuel additives which may be used by the Russian army, are added to the existing export ban.

5. Extending import bans

• Additional import bans – worth €5.5 billion - including cement, rubber products, wood, spirits (including vodka), liquor, high-end seafood (including caviar), and an anti-circumvention measure against potash imports from Belarus.

6.Excluding Russia from public contracts and European money; legal clarifications and enforcement.

• Full prohibition on the participation of Russian nationals and entities in procurement contracts in the EU. Limited exceptions may be granted by the competent authorities where there is no viable alternative.
• Restriction on financial and non-financial support to Russian publicly owned or controlled entities under EU, Euratom and Member State programmes.
• Addressing various overlaps between export restrictions on dual-use items and advanced technologies and other provisions.
• Extending to all official EU currencies the prohibitions on the export of banknotes and on the sale of transferrable securities.

An additional 217 individuals who are Russian, members of 'the People’s Council' of the Donetsk and Luhansk breakaway republics and 18 entities have been sanctioned.

Please see here for a Q & A on the fifth package .of restrictive measures against Russia .

Fourth package of EU Sanctions

On 15 March 2022 the EU published a further set of measures in relation to Russia. The measures that came into force on 15 March include adding another 15 individuals and 9 entities to the list of those subject to asset freezes and travel bans.

The measures that came into force on 16 March include:

• a ban on credit ratings agencies from providing ratings on Russian Federation debt.
• further trade restrictions concerning iron and steel, as well as luxury goods;
• expanding the list of persons connected to Russia’s defense and industrial base, to apply tighter export restrictions on dual-use goods and technology. A total of 81 persons and entities have been added;
• prohibitions on new investments in the Russian energy sector and export restrictions on related equipment, technology and services, with the exception of nuclear industry and energy transport;
• a ban on all transactions with certain State-owned enterprises which are already subject to refinancing restrictions. A total of 13 companies are listed;
• a ban on the provision of insurance and reinsurance to any legal person, entity or body operating in the energy sector in Russia;
• Derogations have been provided for activities necessary for ensuring critical energy supply within the EU, as well as the transport of fossil fuels, in particular coal, oil and natural gas, from or through Russia into the EU; and where humanitarian considerations arise.

On 9 March 2022, the European Council issued a press release announcing the EU's agreement to new sectoral measures targeting Belarus and Russia, this one targeting the Belarusian financial sector and a further press release later the same day concerning its decision to impose restrictive measures on 160 individuals as a consequence of Russia’s military aggression against Ukraine.

Details of measures introduced on 9 March 2022 include:

Introduction of further restrictions on the export of maritime navigation goods and technology;

• Expansion of the list of legal persons, entities and bodies subject to the prohibitions related to investment services, transferable securities, money market instruments, and loans;

• Further clarification (in respect of previous restrictive measures) that “transferable securities” includes crypto-assets.
• Limiting the financial inflows from Belarus to the Union, by prohibiting the acceptance, from Belarusian nationals or residents, of deposits exceeding certain values; the holding of accounts of Belarusian clients by the Union central securities depositories; and the selling of euro-denominated securities to Belarusian clients;

• Exemptions under the sanctions measures, for Swiss, EU and EEA nationals in Belarus, in that deposits exceeding €100,000 can be accepted from them.

• Introduction of clarifications on the exception for the provision of financing for small and medium-sized enterprises, as well as certain provisions in the Annexes, relating to prohibited goods and technology;

• Adding 146 members of the Russian Federation Council to the sanctions list, as those individuals ratified the government decisions of the ‘Treaty of Friendship, Cooperation and Mutual Assistance’ between Russia and the two break-away regions in Donetsk and Luhansk;

• Adding 14 persons to the sanctions list, as they supported and benefited from the Government of the Russian Federation and/or provided substantial revenue to it; or are associated with listed persons or entities.

• Prohibition on the listing and provision of services, on Union trading venues, in relation to shares of Belarus State-owned entities;

• Prohibition on transactions with the Central Bank of Belarus;

• Restrictions on the provision of specialised financial messaging services (SWIFT) to certain Belarusian credit institutions and their Belarusian subsidiaries. These are:

-  Belagroprombank

-  Bank Dabrabyt

-  Development Bank of the Republic of Belarus'

• Additional obligations on the Network Manager for air traffic management network functions of the single European Sky, particularly that the Manager rejects all flight plans that violate the Regulations;

• Further clarification (in respect of previous restrictive measures) that “transferable securities” includes crypto-assets.

There is a consolidated list of persons, groups and entities subject to EU financial sanctions, which reflects the officially adopted texts published in the Official Journal of the EU. You need to create an account to log in. This is a simple process. EU Login (europa.eu).

A PDF version of the consolidated list of financial sanctions can also be downloaded, but members should be aware that this list is constantly being amended and updated.

A useful list which contains summaries of all EU sanctions is available on the EU Sanctions Map.

 An overview of EU sanctions is provided here by the European External Action Service. See also the European Commission page containing general FAQs and answers on restrictive measures -sanctions e.g. types of sanctions and who is bound by them (Click here for the pdf version).

The European Commission has issued Guidance to the Member States concerning foreign direct investment from Russia and Belarus in view of the military aggression against Ukraine and the restrictive measures laid down in recent Council Regulations on sanctions. Download the guidance by following this link

Europe -Other Information

In March the European Banking Authority (EBA)  called on financial institutions to ensure compliance with sanctions against Russia following the invasion of Ukraine and to facilitate access to basic payment accounts for refugees. It also more  recently published a statement addressed to both financial institutions and supervisors to ensure they make every effort to provide access for Ukrainian refugees to at least basic financial products and services. They also set out how AML/CFT guidelines should apply. You can read details of the statement here.

Also, the EBA  has designed an efficient framework for reporting of deposits subject to Russian and Belarusian economic sanctions. You can read more about it by clicking this link.

The European Central Bank (ECB) does not impose the financial sanctions adopted by the European Union since Russia invaded Ukraine, nor does it monitor banks’ compliance with them.  However, sanctions can have implications for banking supervision and as banking supervisor, the ECB monitors the impact sanctions can have on banks. The ECB has prepared FAQs on Russia-Ukraine war and ECB Banking Supervision and you can click here to read these FAQs.

"European Banks for Ukraine" is a website which contains information on the European banking sector’s response to the war in Ukraine. You can read about key topics such as access to bank accounts, waiving payment transfers fees and exchange of Ukrainian hryvnia and find links in the information hub on this page .

Accountancy Europe have issued a useful publication ‘War in Ukraine – what European accountants need to know’ which highlights the main points that members need to consider in relation to AML, cybersecurity, and the implications for accounting, reporting and audit.

The European Competition Network (ECN), a network of 27 competition authorities within the European Union and the DG Competition of the European Commission recently issued a joint statement on the application of competition law in the context of the war in Ukraine. They noted that  the different EU/EEA competition instruments have mechanisms to take into account, where appropriate and necessary, market and economic developments and that this extraordinary war situation may trigger the need for companies to address severe disruptions caused by the impact of the war and/or of sanctions in the Internal Market. The joint statement can be viewed on the Irish Competition and Consumer Protection Commission website.

On 9 March 2022 the European Intellectual Property office (EUIPO) in support of Ukraine has adopted a number of measures in coordination with the EU institutions in the field of intellectual property. They have halted all cooperation actions with Rospatent, the Russian Federal Service for Intellectual Property, and the Eurasian Patent Organisation (EAPO). They  have also  taken measures to provide their  fullest support to Ukrainian customers and to safeguard their IP rights while this situation prevents normal communication. More details of their statement and position can be found on their website.

The EU has created a specific Directive – the Temporary Protection Directive – to coordinate member states granting Ukrainian citizens a residence and work permit, known as a Temporary Protection Permit. This temporary protection will be valid for one year and can be extended for up to three additional years. The Directive may directly impact employers as it will afford the right to work in Ireland to those coming from Ukraine. You can read more details about it here.

On 30/31 May 2022,following a special meeting of the European Council ,it adopted certain conclusions concerning Ukraine .For example that the European Union will continue to provide support to Ukraine with a view to addressing humanitarian, liquidity and reconstruction needs and that  it will continue to support the Ukrainian government in its urgent liquidity needs together with its G7 partners.

European Union whistleblower tool

The European Union sanctions whistleblower tool is accessible via the Commission’s website at https://eusanctions.integrityline.com/. It facilitates the anonymous reporting of possible violations of EU sanctions. It can be used to report past, ongoing or planned sanctions violations, as well as attempts to circumvent EU sanctions.

More details about the tool are available at https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions_en#whistleblower

Other 

International

The UN publishes a consolidated list of all individuals and entities subject to sanctions measures imposed by the UN Security Council.

These pages are provided as resources and information only and nothing in these pages purports to provide professional advice or definitive legal interpretation(s) or opinion(s) on the applicable legislation or legal or other matters referred to in the pages. If the reader is in doubt on any matter in this complex area further legal or other advice must be obtained. While every reasonable care has been taken by the Institute in the preparation of these pages, we do not guarantee the accuracy or veracity of any resource, guidance, information or opinion, or the appropriateness, suitability or applicability of any practice or procedure contained therein. The Institute is not responsible for any errors or omissions or for the results obtained from the use of the resources or information contained in these pages.

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