October, 2022 - EU imposes eighth package of sanctions on Russia
On 6th October, 2022 the EU adopted an eighth package of sanctions against Russia. The relevant legislation can be found here. In particular, Council Regulation (EU) 2022/1904 (“the Regulation”) amending Regulation (EU) No 833/2014, includes a number of additional restrictive measures.
A summary of some the restrictions most relevant to our Members follows below.
Further trade restrictions
The list of restricted iron and steel products that either originate in Russia or are exported from Russia has been significantly expanded. In addition, from 30th September 2023, it is prohibited to import or purchase listed iron and steel products which have been processed in a third country but contain iron and/or steel of Russian origin. The restrictions also include a prohibition on the provision of insurance and re-insurance services in respect of iron and steel products
In addition, further import restrictions have been imposed on cigarettes, plastics and cosmetics, wood pulp and paper as well as elements used in the jewellery industry such as stones and precious metals. Certain commodities are subject to a wind-down period until 8th January, 2023 to allow for the execution of any contracts entered into before 7th October, 2022 or any ancillary contracts necessary for the execution of those contracts.
Intended G7 price cap mechanism
The G7 intend to implement a price cap on the sale price of oil to reduce the extent of price increases. The intention behind the price cap mechanism is to allow the export of Russian oil into world markets but limit Russia’s revenue from those sales. The exact details of how the mechanism will work are still emerging and an update will be provided when further information is available.
The Regulation sets out how the price cap mechanism will interact with the restrictions in place in respect of Russian oil and petroleum products. The current position is that the import of Russian crude oil into the EU will be prohibited from 5th December, 2022 and the import of petroleum products into the EU will be prohibited from 5th February, 2023.
If the intended price cap mechanism is agreed by the EU Council, then carriage of Russian crude oil and petroleum products will generally remain prohibited as from those dates. However, it will be permitted for EU persons to transport Russian oil to non-EU destinations and EU insurers/ reinsurers will be able to provide cover for such carriage, provided that the purchase price per barrel does not exceed the price cap. If the price cap is altered thereafter, there will be a 90-day wind-down period for contracts entered into before the date of the price cap alteration (on the basis that those contracts fell within the previous price cap).
Russian Maritime Register of Shipping subject to transaction ban
The Russian Maritime Register of Shipping, a 100% state-owned entity, has been added to the list of Russian state-owned entities that are subject to a transaction ban.
The ban means that EU entities/individuals are prohibited from directly or indirectly engaging in any transaction with the Russian Maritime Register of Shipping. There is a wind-down period until 8th January, 2023 to allow for the execution of contracts entered into before 7th October, 2022 or any ancillary contracts necessary for the execution of those contracts.
In addition, any ships certified by the Russian Maritime Register of Shipping cannot call at EU ports after 8th April, 2023.
Members are reminded that EU sanctions apply within the territory of the European Union; on board any ship under the jurisdiction of an EU Member State; to any person inside or outside the territory of the EU who is a national of a Member State; to any legal person, entity or body, inside or outside the territory of the EU, which is incorporated or constituted under the law of a Member State and to any legal person, entity or body in respect of any business done in whole or in part within the EU. We urge Members to frequently review the sanctions position when dealing with any country where sanctions are applicable as the position may change rapidly.
As always, if Members have any questions in relation to the above issues they are invited to contact the Club for further information.