Along with the recent wave of EU Ukraine-related and Russian restrictions described in our August 1, 2014 Bulletin, the EU has amended its earlier regulation restricting imports into the EU of goods originating in Crimea and Sevastopol to add restrictions on certain investments and exports to those areas.

The earlier Council Regulation 692/2014 (June 24, 2014) prohibited the import into the EU of goods originating in Crimea or Sevastopol, defined in accordance with concepts in the Community Customs Code as:

  1. mineral products extracted within [Crimea or Sevastopol];
  2. vegetable products harvested therein;
  3. live animals born and raised therein;
  4. products derived from live animals raised therein;
  5. products of hunting or fishing carried on therein;
  6. products of sea-fishing and other products taken from the sea outside a country's territorial sea by vessels registered or recorded in the country concerned and flying the flag of that country;
  7. goods obtained or produced on board factory ships from the products referred to in subparagraph (f) originating in that country, provided that such factory ships are registered or recorded in that country and fly its flag;
  8. products taken from the seabed or subsoil beneath the seabed outside the territorial sea provided that that country has exclusive rights to exploit that seabed or subsoil; (i) waste and scrap products derived from manufacturing operations and used articles, if they were collected therein and are fit only for the recovery of raw materials;
  9. goods which are produced therein exclusively from goods referred to in subparagraphs (a) to (i) or from their derivatives, at any stage of production.
  10. or goods which underwent their last substantial transformation in those areas.

The earlier regulation also prohibited, within the EU or by persons or activities subject to EU jurisdiction under the regulation (including EU member state nationals or companies constituted under the laws of an EU member state, wherever located), the provision, directly or indirectly of financing, financial assistance, insurance and reinsurance related to the import of such goods.

New Council Regulation 825/2014 (July 30, 2014) adds prohibitions applicable within the EU or to persons or activities subject to EU jurisdiction under the regulation with respect to certain financing, investments or joint ventures relating to the creation, acquisition or development of infrastructure in the areas of transport, telecommunications or energy in Crimea or Sevastopol, or relating to the exploitation of oil or gas, or of mineral resources listed in an annex to the regulation, in Crimea or Sevastopol.

In addition, the regulation prohibits the sale, supply, transfer or export, directly or indirectly, to any natural or legal person, entity or body in Crimea or Sevastopol, of certain equipment and technology (contained in a very broad list annexed to the regulation), that has been determined to be key to infrastructure relating to transport, telecommunications, energy and the exploitation of oil, gas and mineral resources. The prohibition on such sale, supply, transfer or export is a blanket one, not limited to uses in those areas.

The new regulation also prohibits the provision, directly or indirectly, of technical assistance or brokering services related to these activities.

Both the original regulation with respect to imports, and the new regulation adding further restrictions, contain grandfather provisions exempting transactions required by an agreement or contract concluded before the effective date of the relevant regulation, provided the competent authority in the relevant member state has been informed at least 10 working days in advance.

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This is yet another example of the ratcheting up of restrictions in light of the developments with respect to Ukraine, and highlights the importance of keeping an eye on developments.