Marilou Pavlou Christodoulides LLC | View firm profile
Further to our article posted on 4 April, further and more severe restrictive measures have been adopted by the EU against Russia. Similar measures were first adopted by EU and UK but these are not the subject of the below article.
Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days and these will be the subject of future articles.
This information is:
- of a general nature only and is not intended to address the specific circumstances of any particular individual or entity;
- not necessarily comprehensive, complete, or up to date;
- not professional or legal advice (if you need specific advice, you may consult with us).
On 8 April, the Council imposed a fifth package of economic and individual sanctions against Russia. Council Regulation 2022/576 introduces additional new restrictions by way of amendment to Regulation 833/2014.
The newly imposed sanctions are as follows:
Article 3ea (Russian vessels) which prohibits the vessels registered under the flag of Russia from entering to EU ports.
Article 3i (Goods that generate significant revenue for Russia) includes goods (as these are listed in Annex XXI) which generate significant revenues for Russia if they originate in Russia or are exported from Russia.
Article 3j (Coal and other fossil fuels) includes coal and other solid fossil fuels (as these are listed in Annex XXII) if they originate in Russia or are exported from Russia.
Article 3k (Export of goods enhancing Russian industrial capacities): Member States are prohibited from exporting to or for use in Russia, or providing associated technical assistance, brokering services, or financing or financial assistance in respect of certain listed goods that could contribute to the enhancement of Russian industrial capacities (e.g., bulbs, silicon, paints and varnishes, printing ink, photographic film, bakery ovens, articles of nickel and tin, various machine tools, worn clothing and clothing accessories). Member States may obtain authorisation in certain cases, including where the Member State competent authority determines the supply may be necessary for humanitarian purposes.
Article 3l (Road transport undertakings): Subject to specific exceptions (including in relation to mail services) or an authorisation (e.g., where necessary for reasons such as humanitarian purposes, or for the purchase, import, or transport into the EU of natural gas and oil), road transport undertakings established in Russia are prohibited from transporting goods by road within the territory of the EU, including in transit.
Article 5b (Provision of cryptoasset services): Subject to limited exceptions, Member States are prohibited from providing cryptoasset wallet, account, or custody services to Russian nationals or natural persons residing in Russia, or legal persons, entities, or bodies established in Russia, if the total value of cryptoassets of the natural or legal person, entity, or body per wallet, account, or custody provider exceeds €10,000.
Article 5m (services related to trusts) which provides that it is prohibited to register, provide a registered office, business or administrative address as well as management services to, a trust or any similar legal arrangement having as a trustor or a beneficiary:
- Russian nationals or natural persons residing in Russia;
- legal persons, entities or bodies established in Russia;
- legal persons, entities or bodies whose proprietary rights are directly or indirectly owned for more than 50% by a natural or legal person, entity or body referred to in points (a) or (b);
- legal persons, entities or bodies controlled by a natural or legal person, entity or body referred to in points (a), (b) or (c);
- a natural or legal person, entity or body acting on behalf or at the direction of a natural or legal person, entity or body referred to in points (a), (b), (c) or (d).
Additionally, it shall be prohibited as of 10 May 2022 to act as, or arrange for another person to act as, a trustee, nominee shareholder, director, secretary or a similar position, for a trust or similar legal arrangement[1] as referred to above. Article 5m further stipulates that the above prohibitions will not apply to:
- Operations that are strictly necessary for the termination by 10 May 2022 of contracts which are not compliant with the above prohibitions above concluded before 9 April 2022 or ancillary contracts necessary for the execution of such contracts
- Trustors or beneficiaries who are nationals of a Member State or natural persons having a temporary or permanent residence permit in a Member State
Council Regulation (EU) 2022/576 introducing Article 5m can be found here.
Regulation 833 can be found here (please note that on the date of publication this is available in consolidated form to include amendments only up until 15 March 2022).
Conclusion
Further measures are anticipated in light of the EU working on additional proposals to target oil imports as part of its goal to reduce its dependence on energy imports from Russia.
MPC Legal is closely monitoring events in Cyprus and the implications of the increased prohibitions as events unfold. We are available to advise clients on the legal and practical impacts of these measures on their structures.
Authors
Marilou Pavlou Christodoulides | Partner
Pavlina Demetriou | Senior Associate
[1] For its meaning, “similar legal structure” refers to a relevant EU notification, which states that the term refers to trusts and international trusts (https://eurlex.europa.eu/legal-content/EN/TXT/PDF /? uri = OJ: C: 2019: 360: FULL & from = DE)