New sanctions targeting Russia were adopted by the EU on 23 June 2023. This 11th sanctions package includes, for example, a new circumvention mechanism aimed at prohibiting exports of certain goods to third countries, imposing broader transport and transit restrictions, increasing burdens on EU iron and steel importers, adding new export restrictions as well as certain derogations. It also adds new Russian persons and entities to its sanctions list.

Our team has summarized the main takeaways of the new sanctions package for EU operators, which you can find below.

New anti-circumvention tool and transit and export restrictions

New measures are aimed at restricting the sale, supply, transfer or export of certain goods to third countries identified as having systematically and persistently facilitated the circumvention of existing EU sanctions against Russia. The scope of goods targeted by the new tool expands Annex VII to Regulation 833 to include sensitive dual-use goods and technology, goods and technology that might contribute to the (i) enhancement of Russia’s military, (ii) technological or industrial capacities or to (iii) the development of Russia’s defense and security sector in a way that strengthens its ability to wage war. The EU has not yet introduced any restrictions on third countries under its anti-circumvention measures.

Additional burden on EU steel importers

Importers of sanctioned iron and steel products that were processed in a third country must now provide evidence that the inputs they used did not originate in Russia.

Transport measures

Existing transport restrictions have been expanded and now include a full ban against using trucks, including semi-trailer trucks, registered in Russia to transport goods to the EU. Moreover, the existing ban on access to EU ports and waterway locks has been further tightened to apply to any vessels that engage in ship-to-ship transfers and are suspected of violating the ban on Russian oil imports or the price cap. Access is denied to vessels that have not notified authorities of a ship-to-ship transfer at least 48 hours in advance if the transfer takes place in the Exclusive Economic Zone of a member state or within 12 nautical miles from the baseline of that member state’s coast.

Additional oil pipeline export ban

Importing Russian crude oil through the northern branch of the Druzhba pipeline to Germany and Poland is now banned.

New transit and export restrictions

The EU’s new measures further extend the list of goods subject to the transition ban by significantly expanding the list of goods set out in Annex VII to Regulation 833, which now includes (i) goods and technologies that might contribute to Russia’s military and technological enhancement or to the development of its defense and security sectors, (ii) goods and technology suited for use in the aerospace industry and (iii) jet fuel and fuel additives.

Ban on intellectual property rights regarding restricted goods

As a measure to prevent the production of sanctioned goods outside the EU, the new sanctions package explicitly expands the prohibition on selling, licensing, transferring or referring intellectual property rights and trade secrets related to sanctioned goods.

New listing criterion

First, the EU introduced a new listing criterion to allow for the designation of individuals and legal entities operating in the Russian IT-sector with a license issued by the Russian Federal Security Service (FSB) and the Russian Ministry of Industry and Trade. Second, the existing criterion for sanctions circumvention was revised to include the possibility of imposing sanctions on persons and legal entities that are significantly frustrating EU sanctions.

Additional derogations to oil export

The new measures introduce an exception for the operation and maintenance of the Caspian Pipeline Consortium (CPC) pipelines and associated infrastructure necessary for Kazakh crude oil supplies to the EU. Moreover, the existing exemption to the oil price cap for Sakhalin oil supplied to Japan was extended until 31 March 2024. Previously, the exemption was due to expire on 5 June 2023.

Designations

Finally, the EU has added another 71 individuals and 33 entities to the sanctions list, including Russian IT companies providing technology and software to Russian intelligence, senior military officials, decision makers and entities working with the Russian armed forces, as well as two Russian banks (MRB Bank and CMR Bank).

Dentons will continue to monitor and report on any developments related to the above. Please feel free to reach out to your Dentons relationship partner if you have any questions or require assistance with ensuring sanctions compliance of your organization.