The Financial Markets Law Committee (FMLC), a non-profit organisation that opines on financial markets law, has published a paper entitled Issues of Legal Uncertainty Arising in the Context of EU Contract Sanctions. The paper focuses on legal uncertainty arising from the EU’s Russia sanctions imposed by Council Regulation (EU) 833/2014, particularly the so-called “sectorial sanctions”.
Specifically the report draws attention to issues of uncertainty relating to: (i) the prohibition relating to loans or credit; (ii) the meaning and scope of related entities and the scope of “transferable securities” and “ money market instruments”; (iii) the impact on the derivatives market; (iv) financing and financial assistance; (v) the rules on circumvention; and (vi) criminal and civil liability.
To address the legal uncertainty identified in the paper, the report proposes, amongst other things, that: (i) a centralised EU authority responsible for the issuance of licences and the interpretation of rules should be established; (ii) further guidance be provided with regard to certain provisions; and (iii) there be a stated presumption that sanctions measures do not prohibit the performance of obligations arising from contracts or agreements that pre-date the sanctions.
