The sixth package of sanctions against the Russian federation

The Council of the European Union, on June 3, 2022, formally approved the so-called “sixth package of sanctions against the Russian Federation” through the issuance of a series of Executive Regulations, concerning restrictive measures in view of the socio-economic destabilization that Ukraine is undergoing due to recent developments in the armed conflict.

Oil Embargo

The biggest news undoubtedly concerns the so-called “oil embargo”, introduced through the adoption of Regulation (EU) No. 879/2022 – which amends the previous Regulation (EU) No. 833/2014 – which stipulates that, as of June 4, 2022, it will be prohibited to import, purchase and/or transfer, directly or indirectly, crude oil or petroleum products referred to in Annex XXV of the said Regulation, originating in Russia or exported from Russia. More precisely, these are the petroleum products identified by the following CN codes:

• a) 2709 00: crude oils of petroleum or bituminous minerals;
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• (b) 2710: petroleum oils or oils obtained from bituminous minerals, other than crude oils; preparations not elsewhere specified or included, containing by weight 70 per cent or more of petroleum oils or oils obtained from bituminous minerals and of which such oils are the basic constituent; waste oils.

However, these prohibitions, are met with certain exemptions and exceptions, contained and listed in’Art. 3-quaterdecies, paragraph 3, introduced by Regulation (EU) 879/2022, which can be summarized as follows:

• 1. with respect to the aforementioned products, the prohibition shall not apply until December 5, 2022, for “one-off” transactions involving: short-term deliveries concluded and executed prior to that date; to the performance of contracts for the purchase, import or transfer of goods of CN code 2790 00 concluded prior to June 4, 2022, or ancillary contracts for the performance of such contracts, provided that the same are notified by the Member State concerned to the EU Commission by June 24, 2022;
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• 2. until February 5, 2023, the aforementioned prohibition shall also not apply to the purchase, import, transfer of crude oil transported by sea and petroleum products listed in Annex XXV, if such goods originate from a third country and are only loaded in Russia, departing from Russia or in transit through Russia, provided that both the origin and the owner of such goods are not Russian;
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• 3. import of crude oil under CN code 2790 00 delivered by pipeline from Russia to the Member States, until otherwise decided by the Council.
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The’list of exceptions to the so-called “oil embargo” just recalled are not exhausted here, however, the rationale behind these exceptions è to allow Member States time to be able to establish new trade relations with other potential suppliers and/or distributors of oil and oil derivatives, so as to contain, as far as possible, the potential damage arising from the loss of a major trading partner such as Russia.

Exclusion from the SWFT system of other Russian banking institutions and the additional restrictions

The so-called “sixth sanctions package” then extended the restrictions adopted with recent regulatory actions, against:

• a) new natural and legal persons;
• b) new legal persons, entitiesà and/or organizations, with regard to authorizations for the sale, supply, export of “Dual Use” goods and technology that can strengthen Russia's defense and security sector;
• c) new Russian natural and legal persons, including senior army officers, to ensure accountability for human rights violations committed in Ukraine by the Russian military;
• d) increase in the number of subjects included in the so-called “Black-list” and recipients of special types of sanctions treatment;
• e) as of June 14, 2022, the blocking of the SWIFT payments system will be extended to three additional major Russian credit institutions (Sberbank, Moscow Credit Bank, and Russian Agricultural Bank).

Finally, an important novelty concerns the prohibition – introduced through the new Article 5-indecies of Regulation (EU) 879/2022 – to provide directly or indirectly, accounting, auditing, including statutory audit, or tax advisory services or administrative/management consulting or public relations services to the following entities:

• (a) Russian government; or
• b) legal persons, entitiesà or bodies established in Russia.

Even this prohibition, however, is not è exempt from certain exceptions. The following are some exceptions contained in the’just mentioned Article 5-indecies:

• The prohibition does not apply to the provision of services strictly necessary for the exercise of the right of defense in judicial proceedings and the right to an effective judicial remedy;
• The prohibition does not apply to the provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned or under the exclusive or joint control of a legal person, entity or body registered or established under the law of a Member State.
• As an exception to the aforementioned prohibition, the competent authorities may authorize the provision of the above-mentioned services, under such conditions as they deem appropriate, after ascertaining that the service è is necessary for humanitarian purposes (i.e. provision and assistance of medical care and food) and/or for civil society activities that directly promote democracy, human rights or the rule of law in Russia.

Conclusions

In conclusion, it can certainly be said that the so-called Sixth Sanctions Package introduced by the’EU, hinges on the “process of “escalation” sanctions against the Russian Federation and which does not seem to want to stop at all.

At this stage, è it is of paramount importance for companies exporting their products to Russia, to be fully aware of what restrictions the European Union is progressively inserting through the adoption of the sanctions packages, in order to avoid the risk of incurring prohibitions imposed by the Regulations recently issued by the EU, which could result in: the blocking of the goods at customs, the seizure of the same, the’imposition of heavy administrative sanctions and possible criminal consequences.