As the crisis in Ukraine deepens, the EU has expanded the basis on which it will target individuals and entities for Ukraine-related sanctions. In a regulation published on 12 May 2014, the Council of the European Union authorized the imposition of sanctions on:
“natural persons responsible for, actively supporting and implementing, actions or policies which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine, or stability or security in Ukraine, or which obstruct the work of international organisations in Ukraine, and natural or legal persons, entities or bodies associated with them, or legal persons, entities or bodies in Crimea or Sevastopol whose ownership has been transferred contrary to Ukrainian law, or legal persons entities or bodies which have benefited from such a transfer.” (New wording in italics).
This goes beyond the previous criterion of natural persons identified as being responsible for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine and associated natural or legal persons, entities or bodies.
Now also for the first time, the EU has designated two companies as targets, freezing their assets and prohibiting providing to them or for their benefit economic resources. These are Crimea-based gas company, Chernomorneftegaz, already the subject of U.S. sanctions, and Crimean oil supplier, Feodosia. Both companies have been effectively confiscated by the new authorities in Crimea following the Russian takeover of that area. In addition, the EU has added another 13 individuals to the 48 individuals previously targeted with travel bans and asset freezes, including some already the subject of U.S. sanctions.
The EU still has not gone as far as the U.S. and has avoided targeting Russian businessmen and their companies. EU sanctions remain tightly focused on separatists located in Crimea, Sevastopol and eastern Ukraine, and a small number of Russian officials. The most recent additions fit that pattern, with only three Russian government and military officials being named and the remainder being Ukrainian separatists, none of whom appear to have significant economic clout. Nonetheless, it appears that any Ukrainian company in a breakaway region that is seized by self-appointed officials may be targeted, making it very difficult for the new owners to conduct any business in or with the EU.
How much further the EU is prepared to go as the crisis deepens remains to be seen.