The 6th EU sanctions package against Russia

The EU Commission adopted its sixth sanctions package against Russia and Belarus on 3 June 2022. The measures supplement the restrictions stipulated in the first five sanctions packages and are intended to further weaken the Russian economy in its key supporting function in Russia's war of aggression against Ukraine. The central element is a partial embargo on Russian oil. Additionally, existing financial sanctions and trade restrictions are being expanded.

A.        Content

In detail, the 6th sanctions package includes the following measures:

1. Oil embargo: After intensive negotiations, the member states have agreed to impose an embargo on imports of Russian crude oil and Russian refined petroleum products. However, it will still be possible to fulfil existing contracts for the supply of crude oil to be imported by sea within six months from the date of entry into force of the sanctions package. For the performance of contracts for petroleum products, there is a transition period of eight months.
   
   As an exception, member states that are especially dependent on Russian oil may continue to receive supplies until the Council agrees on other arrangements. Given the volume of Russian oil supplies to the EU (EUR 48 billion worth of crude oil and EUR 23 billion worth of refined petroleum products in 2021), the financial damage to the Russian economy will doubtlessly be felt, regardless of this exemption. And this probably even more so since, after a transition period of six months, it will be impermissible for economic operators from the EU to assume the insurance and financing of the transport of Russian crude oil to third countries.

2. SWIFT exclusion: Furthermore, the EU has agreed to exclude further banks from the SWIFT system. In addition to three other Russian banks - the largest Russian bank, Sberbank, the Credit Bank of Moscow, and the Russian Agricultural Bank - another Belarusian bank - the Belarusian Bank for Development and Reconstruction - now no longer has access to SWIFT.

3. Restriction of services: In the future, the provision of business-related services directly or indirectly for the benefit of the Russian government and entities established in Russia will also be prohibited. This includes, in particular, tax consulting, auditing and management consulting services.

4. Suspension of broadcasting activities of additional Russian stations: The sixth sanctions package also includes measures aimed at making it more difficult for Russia to exert state-directed media influence in the EU. To this end, the EU is suspending the broadcasting activities of three further Russian stations - Rossiya RTR/RTRPlaneta, Rossiya24/Russia-24 and TV Centre International - in the member states. Whereas previously only the respective regulatory authorities in the individual member states took action against these broadcasters, the sixth sanctions package contains for the first time uniform EU-wide restrictions directed against these broadcasters.

5. Extension of export restrictions: The sixth sanctions package supplements the export restrictions on dual-use goods and technology already provided for in the first five packages of measures. For example, the list of advanced technologies whose export to Russia is banned has been extended to include additional chemicals that could be used to manufacture chemical weapons. Furthermore, the EU Commission is extending the list of sanctioned natural and legal persons to whom special export restrictions apply.

6. Inclusion of more people on the sanctions list: : Finally, the EU has imposed sanctions on additional individuals and organisations: In addition to those responsible for the atrocities committed by the Russian forces in Bucha and Mariupol, they include defence companies and a financial institution.

B.        What now needs to be done?

In order to comply with the new sanctions, companies need to check in particular whether they have business relationships with the natural persons and legal entities now added to the sanctions list. Tax consulting and auditing firms should be aware that the sixth sanctions package also contains provisions on their services with a connection to Russia.

C.        Outlook

Russia's war of aggression against Ukraine. Whether modifications will be made in the coming weeks depends, among other things, on which means of warfare Russia will resort to in its military offensive in the Donbass and whether atrocities such as those in Bucha and Mariupol will be repeated.

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