On 23 June, the EU issued a significant new set of sanctions relating to Ukraine. Pursuant to Council Regulation (EU) No. 692/2014, the EU prohibited the import into the EU of goods originating in Crimea or Sevastopol. The EU also prohibited the provision of financing, financial assistance or insurance in relation to such imports.
Goods originating in Crimea or Sevastopol are defined as goods wholly obtained in Crimea or Sevastopol, or goods that underwent their “last substantial transformation” there. This definition accords with standard EU customs law.
There are two exceptions to this general prohibition. First, goods that have been granted a certificate of origin by the Ukrainian government can be imported into the EU. Second, a ‘grandfathering clause’ allows the continued performance of contracts entered into before 25 June 2014 until 26 September 2014.
The Regulation does not prohibit all business conducted with Crimea and Sevastopol. As with other EU legislation, the prohibition applies to EU nationals, EU-registered companies, activities within the EU and business done in whole or in part within the EU. Therefore, activities of non-EU businesses acting wholly outside of the EU are not prohibited, such as Russian companies with Crimean facilities. In addition, the prohibition only applies to the import of goods into the EU, and not to other business activities taking place in Crimea, including imports not destined for the EU.
For a more detailed analysis of these sanctions, please see our Client Update: European Union Bans Imports of Goods from Crimea.