In June 2024, the EU adopted the 14th package of sanctions against Russia, which includes new energy-related measures that target liquified natural gas (LNG) and target vessels which support Russia’s war. The following are the main highlights of the newly adopted sanctions package:
Prohibitions on LNG:
In this regard, the package forbids futures investments in, and exports to LNG projects built in Russia. Additionally, it prohibits the use of EU ports for the transhipment of Russian LNG following a nine-month transition period, and prohibits the import of Russian LNG into specific terminals which are not connected to the EU gas pipeline network.
Listing of Vessels:
The EU has adopted a framework to list and sanction vessels contributing to Russia’s aggression against Ukraine by imposing prohibitions to:
- access EU ports, anchorage zones and locks,
- import, purchase, transfer, sell, supply or export designated vessels,
- operate or crew designated vessels,
- provide services to designated vessels (flag registration, financing, financial assistance, brokering services, technical assistance and other services) and
- engage in ship-to-ship transfers, transfers of cargo with or procure services from designated vessels.
These vessels can be designated for a broad array of reasons such as their support through the transport of military equipment for Russia, the transport of stolen Ukrainian grain and support in the development of Russia’s energy sector, for instance through the transport of LNG components or LNG transshipments. This measure also targets tankers part of Putin’s dark fleet which circumvent the EU and Price Cap Coalition’s caps, while adopting deceptive shipping practices in complete disregard of international standards. The EU has placed 27 vessels on its initial round of listings.
Entity and Individual Listings:
The package introduces new listings targeting individuals and entities responsible for actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. A total of 116 additional listings of 69 individuals and 47 entities are subject to asset freezes and travel bans, in the case of individuals.
EU Banks using the ‘System for Transfer of Financial Messages’ (SPFS):
This sanctions package introduces a ban for EU banks outside Russia using ‘System for Transfer of Financial Messages’ (SPFS), a specialised financial messaging service, similar to SWIFT, developed by the Central Bank of Russia to neutralise the effect of restrictive measures. The package permits the EuropeanCouncil to compile a list of non-Russian third-country banks linked to the system for which, business with EU operators will be prohibited.
Furthermore, the package places a ban on transactions with banks and crypto asset providers, in Russia and third countries, that facilitate transactions supporting Russia’s defence-industrial base. These new sanctions will curb the ability of the Kremlin to channel funds to finance its war machine.
Restrictions on Imports and Exports:
The 14th package restricts export of nine additional dual-use and advanced technology items (e.g. microwave and aerial amplifiers, flight data recorders and All-Terrain Vehicles) and extends the export bans on certain types of industrial products chemical, plastics, vehicle parts and machinery goods (EUR 5 billion of EU exports prior to the invasion, in 2021).
Stricter restrictions are imposed upon 61 entities established in Russia and other third countries that are directly or indirectly associated to Russia’ military complex for the export of dual-use and advanced technology items. The package also extends the import ban to include helium, which generates significant revenues for Russia.
Import Ban on Russian Diamonds:
The package also finetunes the import ban on Russian diamonds already in place through the adoption of the 12th sanctions package. The 14th package clarifies that the ban does not apply to diamonds that were located in the EU or in a third country (other than Russia), or were polished or manufactured in a third country, before the ban on Russian diamonds entered into force (so-called ‘grandfathering’). It also allows temporary imports or exports of jewellery, for example for trade fairs or repairs. Furthermore, the package prolongs the sunrise period after which the full-traceability scheme for imports of rough and polished natural diamonds will become mandatory by six months (until 1 March 2025). The ban on jewellery incorporating Russian diamonds processed in third countries other than Russia has been postponed.
Private Sector Compliance:
This package contains several measures meant to boost private sector compliance, support enforcement by national competent authorities, and hamper sanctions circumvention, including measures intended for EU parent companies to ensure compliance by foreign subsidiaries. Moreover, it includes specific initiatives to protect EU operators from expropriation and enable them to respond to other illegitimate actions of the Russian state, such as the theft of intellectual property.
For assistance with setting up an affective Sanctions Monitoring Program, contact Shoulder Compliance on charles.cassar@shoulder.mt
