EU sanctions against Russia
In February and March 2014 the crisis in Ukraine became seriously intensified when Russian armed forces occupied the peninsula of Crimea and formally annexed Crimea on 21 March 2014. Since then the EU has several times imposed sanctions against Russia. Recently, restrictive measures against Russia were amplified through Council Regulation (EU) 833/2014 of 31 July 2014.
The sanctions comprise anything from travel bans to the EU for specific named persons to wider economic sanctions against the Russian finance sector, oil sector and military sector. Recently, restrictive measures against Russia were amplified through Council Regulation (EU) 833/2014 of 31 July 2014.
The new measures primarily concern restrictions on export of goods and technologies that may be intended for military use, control with export of certain technologies that are intended for the oil sector, restrictions on export and import of goods stated on the Common Military List of the EU, and restrictions against purchasing, selling or otherwise dealing with securities issued by certain Russian state-owned banks.
The intention of the new restrictive measures is to impact Russia's economy in a significant way. Hence, companies that in any way have relations to Russia, Crimea or the town Sevastopol ought to decide on certain measures in order not to come into conflict with the sanctions. This means both in relation to goods as well as the persons and the entities that the companies are cooperating with.
As a reaction to the restrictive measures from the EU, Russia has countered with a line of sanctions imposed against the EU and the USA. These sanctions i.a. concern restrictions against the import of fruit, vegetables, meat, milk and dairy products from the EU and the USA, and it is uncertain whether Russia intends to extend the sanctions to other areas.
Further on the sanctions against Russia
Article 2 of the Council Regulation: It is prohibited to sell, supply, transfer or export dual-use goods and technologies to natural or legal persons, entities or bodies in Russia, if the goods in question and the technology in question in their entirety or in part can be intended for military use. Dual-use goods and technology shall be understood as the goods that appear from Annex I of Council Regulation (EC) 428/2009. For example: nuclear materials, electronic and technological goods.
Exception: Application for authorisation for exports may be submitted, however, when deciding on requests for authorisations, the competent authorities may not grant an authorisation for exports if they have reasonable grounds to believe that the goods are intended for military use.
However, the competent authorities may grant authorisation if the export concerns execution of an obligation arising from a contract or agreement concluded before 1 August 2014. This exception also applies to the other restrictive measures.
When a company or a citizen of the EU is to obtain knowledge on who the competent authority in the Member State in question is, they should refer to Annex I of Council Regulation (EC) 833/2014. As regards Denmark, the competent authority is the Ministry of Foreign Affairs in Denmark.
Article 3 of the Council Regulation: Sale, transfer or export of technologies, cf. Annex II, to natural or legal persons, entities or bodies in Russia requires prior authorisation. Annex II of Council Regulation (EC) 833/2014 comprises certain technologies that are intended for the oil sector for use in exploration and production of oil. Annex II also comprises i.a. various pipes, pumps, machines and instruments for drilling.
Exception: The competent authority in the Member State where the exporter is established may grant authorisation if they have reasonable grounds to determine that the export is for projects pertaining to deep water oil exploration and production, Arctic oil exploration and production, or shale oil projects in Russia.
Article 4 of the Council Regulation: It is prohibited without authorisation to supply i.a. technical and financial assistance related to the goods and technology listed in the Common Military List to natural or legal persons, entities or bodies in Russia. Technical and financial assistance is also prohibited in relation to manufacture, maintenance and use of these goods and technology. Financial assistance i.a. includes grants, loans and export credit insurance. The restriction also applies to providing brokering services related to technical and financial assistance.
Article 5 of the Council Regulation: It is prohibited to purchase, sell, provide brokering or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments with a maturity exceeding 90 days, issued after 1 August 2014 by certain Russian state-owned banks, including Sberbank, VTB Bank, Gazprombank, Vnesheconombank and Rosselkhozbank, cf. the list in Annex III of Council Regulation (EC) 833/2014.
As a consequence of Russia's continued role in the crisis in Ukraine, the EU countries agreed to amplify their sanctions with effect from 12 September 2014 against Russia further.
It is a question of further intensifying the above described restrictive measures. Hence, the sanctions are more severely to impact the Russian oil industry, arms industry, import of goods for civil purposes and Russian companies' possibilities of lending money in the EU. Furthermore, the list of persons with frozen assets in the EU and travel bans is extended.
As a reaction to this Russia's Ministry of Foreign Affairs has stated that Russia will take "reasonable precautions" towards the EU, and that Russia is considering closing down air territory for European airline companies with routes from Europe to the Far East.
Violation of the sanctions
In the event a company or a citizen in the EU in one way or the other neglects to observe the sanctions, such may entail liability. This also applies to legal persons, entities or bodies outside the EU but who are registered or established according to legislation of a Member State, for example a subsidiary. The Member States lay down the rules themselves on how lacking observance of the sanctions shall be penalized. In respect of Danish companies and citizens the Danish Criminal Code shall apply. Generally, the penalty is a fine or imprisonment up to 4 months. Under particularly aggravating circumstances the penalty can be extended. Actions will not entail liability if the person in question did not know nor had reasonable grounds to believe that his actions would be contrary to the sanctions.