On Friday 12 September 2014, an additional set of EU sanctions measures entered into force against the Russian Federation.


On 31 July 2014, the European Union adopted Regulation 833/2014, imposing an additional set of economic sanctions against Russia, in response to "Russia's actions destabilising the situation in Ukraine". These measures imposed for the first time sectoral economic sanctions in such areas as the financial sector, exports of oil-related technologies and exports of military and dual-use equipment and technologies.

The EU had previously imposed sanctions predominantly targeting certain individuals and entities in Russia and Ukraine, in response to the annexation of Crimea and Sevastopol, and the subsequent escalation of the crisis in Eastern Ukraine. The original measures mainly involved asset freezes and travel bans.

On 8 September 2014, the EU agreed on a new round of sanctions, and after extensive diplomatic negotiations, the additional sanctions measures were published in the Official Journal of the European Union on 12 September 2014. They seek to restrict Russia's access to EU capital markets, and target in particular the Russian defence, energy and financial sectors. These new so-called "Phase Three-Plus" sanctions complement the earlier sanctions, and came into force immediately.

EU sanctions measures imposed by EU Council Regulations are directly applicable in their entirety in all EU Member States.

The sanctions imposed on Russia significantly change the legal and compliance risks and costs of EU and international companies and individuals doing business in Russia, Crimea and Sevastopol or with partners from that region.

The sanctions imposed by the EU against Russia to date now include:

An asset freeze for certain individuals and entities and a travel ban for certain individuals

These were imposed by EU Decision 2014/145 and EU Regulation 269/2014 of 17 March 2014. The individuals and companies subject to restrictions are listed in Annex I to EU Regulation 269/2014, as subsequently amended by additional EU regulations, including on 12 September 2014 by EU Regulation 959/2014. These latest sanctions add another 24 individuals to list, expanding the "blacklist" to contain 119 individuals and 23 entities.

In addition to the requirement to freeze all funds and assets of blacklisted persons, EU citizens and EU-incorporated companies are prohibited from "making any funds and economic resources available, directly or indirectly" to such persons and to "natural and legal persons, entities or bodies associated with them". The latter restriction is interpreted very broadly and limits significantly the possibility for EU companies and individuals to do business with blacklisted persons and companies and individuals associated with them.

Sectoral sanctions

Imposed by EU Decision 2014/512 and EU Regulation 833/2014 of 31 July 2014, these have now been expanded and amended by EU Decision 2014/659 and EU Regulation 960/2014 of 8 September 2014. The sectoral sanctions currently include:

  • Expanded restrictions on access to capital markets for certain Russian government-controlled banks and companies and their non-EU subsidiaries. These restrictions include a prohibition on EU citizens and EU-incorporated companies to purchase, sell or otherwise deal in bonds and other securitised debt and money-market instruments with a maturity exceeding 30 days issued by Russian controlled credit institutions, Russian controlled companies defence companies, and Russian controlled energy companies. The targeted companies are identified in EU Regulation 960/2014 and include United Aircraft Corporation, Rosneft, Transneft, Gazprom Neft, Sberbank, VTB Bank, Gazprom Bank, Vnesheconombank and Rosselkhozbank, amongst others. In addition, any financial services related to such transactions are prohibited. 

The sanctions have also been expanded to prohibit EU citizens and EU-incorporated companies from making new loans available or providing credit with a maturity exceeding 30 days to any of the banks and companies identified in Regulation 960/2014 of 8 September 2014 and mentioned above, except in certain limited circumstances.

  • Expanded restrictions on export of oil-related equipment, technologies and related services, including financial services, and technical assistance. Crucially, the sanctions now prohibit the provision of a wide range of oil-related services. This builds on the existing requirement of requiring a binding authorisation for the sale/supply/transfer/export of certain equipment and technologies, listed in the Annex to EU Regulation 833/2014 to any natural or legal person, entity or body in Russia or for use in Russia. 

Financing and other financial services (e.g. loans, grants, export insurance), as well as technical assistance or brokering services related to the sale/supply/transfer/export of such equipment and technologies are also subject to a prior authorisation requirement. The competent authorities are required to reject the authorisations application if such sale/supply/transfer/export of the equipment or technologies is intended for projects pertaining to deep water oil exploration and production, Arctic oil exploration and production or shale oil production. 

The new prohibitions are without prejudice to the execution of contracts that were concluded before 12 September 2014.

  • Expanded restrictions on exports of military and dual-use equipment and technology and related financial services and technical assistance. It is prohibited to sell/supply/export/transfer military equipment to Russia or for use in Russia or purchase such equipment from Russia, as well as to provide financing or financial assistance. 

As regards dual-use equipment and technologies, the sanctions now provide a blanket prohibition on the export of dual-use equipment and technologies to any of the nine Russian enterprises listed in EU Regulation 960/2014. Any technical or financial assistance to any of the nine listed Russian enterprises in relation to dual-use equipment and technologies is also prohibited. 

All exports of dual-use equipment and technologies are subject to a prior authorisation by competent authorities. The restrictions also include a prohibition to provide financial services or technical assistance for the sale/supply/export/transfer of military equipment or technologies or dual-use equipment and technologies for military use.

Sanctions targeting trade with Crime and Sevastopol.

These sanctions were imposed by EU Decision 2014/386 and EU Regulations 692/2014 and 825/2014, and continue to remain in force. They were introduced in response to the annexation of Crimea and Sevastopol by Russia, considered illegal by the EU. These sanctions include:

  • A prohibition of imports of goods originating in Crimea and Sevastopol.
  • An export ban on certain key equipment and technologies for infrastructure in such sectors as transport, telecommunications, energy and the exploitation of oil, gas and mineral reserves in Crimea and Sevastopol. The equipment and technologies covered by the prohibition is listed in the annex to EU Regulation 825/2014.
  • A prohibition on investments in the transport, energy and telecommunication sectors in Crimea and Sevastopol.
  • A prohibition of financial services, brokering and technical assistance related to the above activities.

The EU regulations imposing EU sanctions against Russia are directly applicable and are binding for all companies, entities, businesses and individuals in the territory of the EU. EU-incorporated companies and EU citizens are bound by these provisions also in respect of their activities outside the EU.

In EU Member States, the sanctions are enforced by national competent authorities. The national legislation imposes significant penalties for violations of the EU sanctions regime, ranging from substantial administrative and criminal fines to imprisonment.

As regards the future developments in the scope of the EU sanctions against Russia, they will depend on the evolution of the Ukrainian crisis and the EU's assessment of Russia's role in it, and in particular the stability of the current cease-fire. The EU is prepared to rollback sanctions if the developments on the ground are positive, although it cannot be excluded that more far-reaching sanctions could be imposed on Russia in the coming months, targeting further sectors of Russia's economy and additional companies and individuals.