Consolidated FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014
G. SECTOR SPECIFIC QUESTIONS
1. MEDIA
RELATED PROVISION: ARTICLE 2f OF COUNCIL REGULATION 833/2014; ARTICLE 2 OF COUNCIL REGULATION 269/2014
FREQUENTLY ASKED QUESTIONS – AS OF 14 MAY2024
1. On what grounds has the EU imposed restrictions on certain Russian media outlets?
Last update: 14 May 2024
Russian media outlets subject to a broadcasting ban according to Article 2f of Council Regulation 833/2014 have been instrumental in preparing and supporting Russia’s invasion of Ukraine, participating in Russia’s systematic information manipulation and disinformation under the permanent direct or indirect control of the leadership of the Russian Federation. As key pillars to Russia’s continuous and concerted propaganda actions used to disinform global audiences, they pose significant and direct threat to the Union’s public order and security.
2. Does the prohibition also cover the dissemination of content through other means such as a website? Does the content only include the TV stations of the targeted entities, or does it also cover their websites and/or other content that they might disseminate over the Internet?
Last update: 23 March 2022
Yes. The field of application of this provision goes beyond the mere broadcasting of TV stations. The term ‘broadcast’ in conjunction with ‘any content’ is to be understood, in light of the objective of the provision, as covering a broader range of content provision than the term ‘television broadcasting’ used in the Audiovisual Media Services Directive35. It should be understood as transmitting, disseminating or distributing any type of content in the broadest possible meaning (long videos, short video extracts, news items, radio etc.) to an audience regardless of the means of transmission, dissemination or distribution (including online).
The terms ‘facilitate or otherwise contribute to’ are meant to also cover the activities that serve or are instrumental for the transmission, dissemination or distribution of content provided by the targeted entities to other media outlets.
Furthermore, by virtue of the anti-circumvention clause (laid down in Article 12) it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation including by acting as a substitute for natural or legal persons, entities or bodies targeted by the Regulation.
3. The targeted entities have Internet subdomains and also newly-created domains. Are EU operators obliged to avoid enabling, facilitating or otherwise contributing to access to all such subdomains and new domains?
Last update: 8 June 2023
The entity that registers a domain has control over the subdomains; if the domain is blocked, its subdomains should be blocked as well. The prohibition laid down in the Regulation also applies to newly created Internet domains that are in substance run or controlled by the targeted entities or used to circumvent the prohibition at issue.
Indicative and non-exhaustive lists of domains and subdomains can be found in the websites of some national regulators:
- https://www.rtk.lt/lt/atviri-duomenys/ribojimai-susije-su-tarptautiniu-sankcijuigyvendinimu
- https://www.rtk.lt/uploads/documents/files/atviri-duomenys/neteisetos-veiklosvykdytojai/IP_adresu_sarasas.txt
- https://www.rtk.lt/lt/atviri-duomenys/neteisetos-veiklos-vykdytojai
- https://www.rtr.at/Paragraf_64_3a_AMD-G
- https://ttja.ee/ariklient
- https://www.teleindu.dk/brancheholdninger/blokeringer-pa-nettet/
4. Does the Regulation create obligations for parties other than operators of cable, satellite, IP-TV, Internet Service Providers, or online video-sharing platforms?
Last update: 23 March 2022
The Regulation sets out a number of examples of activities (‘such as’), so it also applies to, for instance, caching services, search engines, social media or hosting service providers whose services can be used to disseminate propaganda from the targeted entities.
5. As part of their reporting, can journalists acting in good faith transmit (extracts of) content created by the targeted entities?
Last update: 14 May 2024
The prohibition to broadcast or to facilitate the broadcast of content originating with the targeted entities must be understood in light of the objective of the measure, which is to fight propaganda. Media have the freedom to report and inform objectively on current events. In this regard, the Commission considers that extracts from targeted entities may be used by other operators in an objective way, to inform readers/viewers objectively and completely by illustrating the type of information given by the targeted outlets.
At the same time, the use of these extracts must not be used for circumvention of sanctions, which is also prohibited.
6. The prohibition includes responsibilities for operators to ensure that the ban is enforced. “Operators” is not a defined term; how should this term be understood?
Last update: 23 March 2022
The Regulation sets out a broad and comprehensive prohibition. The Regulation prohibits both the broadcasting (lato sensu) and the fact that operators “enable, facilitate or otherwise contribute to broadcast”. Accordingly, the prohibition applies to any person or entity or body exercising a commercial or professional activity that broadcasts or enables, facilitates or otherwise contributes to broadcast the content at issue.
Furthermore, by virtue of the general and broadly couched anti-circumvention clause in Article 12 of Regulation 833/2014, it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent the prohibition at issue, including by acting as a substitute for a natural or legal person, entity or body subject to the prohibition in Article 2f of the Regulation.
The operators cannot shield themselves from the obligations under the Regulation 833/2014 by invoking other provisions of secondary EU law such as Article 15 e-commerce Directive.
7. Do the activities of an EU-based operator selling satellite capacities to a company in a third country, which may use this capacity to broadcast the content of the restricted channels in this third country, fall within the scope of the prohibition set out in Article 2f?
Last update: 30 June 2022
The prohibition applies not only to the broadcasting activities themselves, but also to those activities enabling, facilitating or otherwise contributing to the broadcast of any content by the legal persons, entities or bodies listed in Annex XV. Given that the making available of such satellite capacities would enable broadcasting, this is prohibited.
Furthermore, in accordance with Article 13 of Regulation 833/2014, the Regulation applies to any legal person, entity or body which is incorporated or constituted under the law of a Member State. Therefore, the prohibition applies to an EU operator based within the territory of the Union, even for sales to a third country.
8. Are there derogations to the prohibition for EU operators to sell listed channels in situations where this prohibition would affect sales of non-listed channels to the same client?
Last update: 30 January 2023
EU-based operators frequently offer “bouquets” of channels for sales. In situations where bouquets include both listed and non-listed channels, Council Regulation 833/2014 does not contain any derogation to the prohibition of Article 2f. Thus, it is prohibited for EU operators to sell this kind of bouquets.
9. Are there derogations to the prohibition for EU operators to sell listed channels in situations where this prohibition would affect sales to public entities?
Last update: 30 January 2023
There is no derogation nor exemption to Article 2f of Council Regulation 833/2014 in case of sales to public entities.
10. Certain Russian media outlets are listed in Annex I to Council Regulation 269/2014. What does the freezing of their “economic resources” entail?
Last update: 14 May 2024
A number of media outlets are listed in Annex I to Council Regulation 269/2014. As a result, their funds and economic resources must be frozen and no funds or economic resources can be made available to them.
The concept of “economic resources” includes assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services.
In the context of the media sector, the Commission considers that the broadcasting of content can be considered an “economic resource”, as such content can be used for advertising products and services. Consequently, broadcasting the content of listed entities is prohibited.
The prohibition to make economic resources available includes the prohibition to provide internet services, satellite capacities, content hosting services or any other means that could be used to obtain funds by the listed entities.
11. I can see that content produced by persons or entities listed in Annex I to Council Regulation 269/2014 is being made available or broadcasted by online video sharing platforms and music streaming service providers. Is it a breach of the Regulation?
Last update: 14 May 2024
No funds or economic resources can be made available to listed persons and entities.
In the Commission’s view, making available or broadcasting music, video or other content produced by listed persons, even if this is done for free, creates visibility for these persons and allows them to promote their production, gain money from advertisement or incite their audience to buy products such as recordings or concert tickets. Therefore, this can amount to making economic resources available to the listed persons.
If you believe you are witnessing sanctions violations or circumvention, these can be reported to your national competent authority or anonymously via the EU whistle-blower tool.
2. AVIATION
RELATED PROVISIONS: ARTICLE 3c; ARTICLE 3d OF COUNCIL REGULATION 833/2014
1. Is a non-Russian operator that operates a Russian registered aircraft affected by the measures?
Last update: 21 March 2022
Yes – the measures prohibits flights of not just Russian air carriers, but also of all Russian registered aircraft, regardless of operator.
2. Does this ban concern also private (i.e. non-commercial) flights of aircraft owned or rented by Russian citizens or Russian companies?
Last update: 21 March 2022
Yes, also private aircraft are included in the ban. This means that also e.g. private business jets are banned.
3. Does this ban concern EU or third-country registered aircraft which are rented by Russian citizens?
Last update: 21 March 2022
Yes.
4. Our company has been requested to provide a service but we are not sure whether it is covered by the new measures. What are our responsibilities?
Last update: 21 March 2022
In case of doubt, you can always contact the competent authorities of the MSs or the European Commission.
But, it is important to keep in mind that Article 12 of Council Regulation (EU) No 833/2014, as amended by Council Regulation (EU) 2022/334, on 28 February 2022, states that it is prohibited to participate in activities the object or effect of which is to circumvent prohibitions in this Regulation.
Moreover, companies are also recommended to report attempts of circumvention to the local authorities. Anyone can report sanctions violations to national authorities or the European Commission.
5. We have leased a non-Russian registered aircraft to a Russian operator. Can we fly the aircraft back from Russia?
Last update: 21 March 2022
If the leasing contract is cancelled to the effect that the aircraft is no longer operated or controlled by a Russian entity, it is not covered by the EU Sanctions and may return to the EU without problems.
It may also be returned under the exceptions provided for the Regulation with the specific and duly justified permission of the relevant Member State(s) even if the contract has not been cancelled.
6. How can we enforce the rules as regards “non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by any Russian natural or legal person, entity or body” since we do not know about the parties behind e.g. an EU registered private aircraft?
Last update: 21 March 2022
It is correct that in particular for overflights, immediate control and enforcement will be difficult. However, the States should brief their ramp check personnel to pay particular attention to this regulation, when checking aircraft that have landed on their territory. In addition to checking documents, the crew should be asked questions about passengers etc. It should also be kept in mind, and communicated to stakeholders, that any entity that is found to have breached the sanctions or participated or assisted in circumventing them may face legal consequences.
7. Does the ban cover just Member States own airspace, or also high-seas airspace controlled by the said Member State?
Last update: 21 March 2022
The Regulation applies to the territory of the Union.
High seas airspace is therefore not covered by the regulation. Only Member States own airspace is covered.
8. NOTAM text: We do not expect Russian Search & Rescue aircraft to operate in our airspace. Do we need to include this mention in the NOTAM?
Last update: 21 March 2022
It is better that each State publishes an identical NOTAM, to avoid any confusion about whether the EU MS are acting in a coordinated manner, or whether some MS might have different rules. If there are no SAR flights in one States airspace, then this mention remains a dead letter, but at least it avoids confusion about having a common line in the EU.
9. What is the point of mentioning one-way returns? Is this not contradicting the legal text?
Last update: 21 March 2022
The mention aims to facilitate the return flights for aircraft owned by the EU leasing companies. Once the leasing contract is terminated by the leasing company, the aircraft is no longer affected by the ban and may be flown back but States may also authorise a return in accordance with Article 3d(3) of Council Regulation (EU) No 833/2014, as amended by Council Regulation (EU) 2022/334, on 28 February 2022, even if the contract has not been terminated yet.
10. Do we need to specifically authorise also humanitarian or SAR flights, or does this requirement apply only to leased flights?
Last update: 21 March 2022
The requirement for carrying a specific authorisation applies to all these flights. Otherwise an overflight might be able to circumvent the rules by simply claiming to be humanitarian flight.
11. Does the ban apply also in case of a person who is a dual citizen (e.g. has both Russian and EU passports)?
Last update: 21 March 2022
Yes, they remain citizens of Russia, even if they also hold a second passport from elsewhere.
Article 3d: (1) It shall be prohibited for any aircraft operated by Russian air carriers, including as a marketing carrier in code-sharing or blocked-space arrangements, or for any Russian registered aircraft, or for any non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by any Russian natural or legal person, entity or body, to land in, take off from or overfly the territory of the Union.
If a person holds RU passport (as well as any other passports /dual/multi citizenship), this person is to be treated as RU citizen for the purpose of Article 3d of this Regulation, for all cases of an ownership, chartering and control of aircraft, also when having the EU Member States residency.
It is up to the national authorities/operators to assess whether the operation is in line with the Regulation. All stakeholders should bear in mind a liability for the circumvention of the prohibition as foreseen in Article 12 of the Regulation.
12. Do these restrictions apply to Russian citizens having a permanent stay permit within the EU Member State as well?
Last update: 21 March 2022
Yes, they do.
13. Are repatriation flights carrying Russian citizens back to Russia allowed with aircraft that would be otherwise banned?
Last update: 21 March 2022
Genuine repatriation flights could be considered in the context of the Regulation. Measures to ensure that repatriation flights are genuine could be the following:
• The operator must demonstrate that the flight is genuinely a repatriation, and not just a regular scheduled flight that happens to have missed the start of the ban. E.g. a plane flying in empty to pick up pax;
• Passengers should be identified by the local consulate;
• The plane must only carry Russian citizens and residents without return flight or connecting flight outside Russia;
• Authorities must check every pax to determine genuine repatriation;
• A flight with just a handful of pax on board could be an indication that the flight is not genuinely a repatriation flight; same goes for a flight operated by private or business jet;
• Repatriation flights usually take place soon after the event in question; additional checks may be required when this is not the case.
• Authorities should also consider that repatriation could also take place through other flight connections and other modes of transport.
14. Do these restrictions apply also to Russian citizens owning EU legal persons that registered the aircraft in the EU Member State?
Last update: 21 March 2022
Yes they do.
Please note the wording in Article 3d, which says “or for any non-Russian-registered aircraft which is owned or chartered, or otherwise controlled by any Russian natural or legal person”. The intention of this wording is to avoid the possibility of circumventing the rules by some legal construct.
15. Do these restrictions apply also to an aircraft that has been in maintenance in the EU and would now return to Russia?
Last update: 21 March 2022
Yes. A maintenance return flight would not qualify as a humanitarian flight or one that is compatible with the objectives of this Regulation.
16. What is the process to coordinate with the Network Manager for flights to which derogations are issued?
Last update: 21 March 2022
To ensure that the Network Manager can handle all information related to derogations, the following process should be used until further notice:
• Operators need to seek derogation (including humanitarian ) from the competent authority of each State they wish to fly to/over/from. This is applicable for flights intended in any EU State, as well as for flights intended in any additional State that has banned flights via NOTAM. An overview of the NOTAMs issued for the Eurocontrol Network Manager (NM) area in relation to the Ukraine crisis can be found in the NM
NOP portal
https://www.public.nm.eurocontrol.int/PUBPORTAL/gateway/spec/index.html
• Once all necessary approvals have been received, and minimum 1 hour before the flight plan is filed, contact the NM Operations Centre (NMOC) Operations Manager (OM) via email to inform of the flight for which the necessary authorisations have been received. Please include c/s, ADEP, ADES and EOBT in the email (to: nm.om@eurocontrol.int; cc: nm.ifps.spvr@eurocontrol.int). The NMOC OM will then ensure that the flight plan is not rejected by the NM system.
• The flight plan must be filed with a remark: Authorisation received from …(listing all the relevant/approving States within the NM area)
17. Can request for diplomatic flights be authorised?
Last update: 21 March 2022
Yes.
Authorisations for diplomatic flights would not be contrary to the objectives of the Regulation, so they could in principle be authorised. However, in order for this exception not to be abused such authorisation should be granted at the request of the State (MS or third State) organising the meeting, or the State of the seat of the international organisation (e.g. CH for UN meetings in Geneva, FR for meetings of the Council of Europe in Strasbourg), and not of Russia itself. In this way, it will be possible to confirm the purpose, duration and other conditions of the diplomatic flight.
18. What exemptions can be granted by MSs in accordance with the Regulation?
Last update: 21 March 2022
The sanctions Regulation provides in its article 3d(3) that Member States can authorise the landing, take-off or overfly of Russian aircrafts if necessary for humanitarian purposes or for any other purpose consistent with the objectives of the Regulation.
This provision, being a derogation from the general prohibition should be read strictly and therefore not invoked beyond those two limited grounds. This is an assessment that has to be done by the national competent authority on a case-by-case basis and taking into account all available evidence.
Humanitarian flights are those operated for purely humanitarian purposes such as delivering or facilitating the delivery of assistance, including medicine, medical supplies or food. Transport of humanitarian workers as well as evacuations, including medical evacuations and ambulance flights, would also fall in this category. We invite MSs to make sure that they refer to humanitarian flights authorisations only when those flights fall under the situations described above.
In previous replies, it has already been clarified that repatriation flights and diplomatic flights can be considered as falling in the scope of the derogation under certain conditions.
Other circumstances, like transporting essential materials that can only be transported by a particular type of planes, might fall within the scope of the exception.
However, it will be important that these other flights are not labelled as ‘humanitarian’ and the MSs provide the necessary information to dully justify the granting of an authorisation.
19. What about overfly authorisation to repatriate passengers stranded in third countries?
Last update: 21 March 2022
Flights for the repatriation of passengers stranded in the EU have no option but to overfly the EU territory to get back to Russia.
However, in the case of passengers stranded in third countries (like Caribbean Islands) there is the possibility to fly back to Russia without overflying the EU territory. They will just have to follow a longer route. EU airlines will also have to fly longer routes to go to Asia. Therefore, we do not consider that an authorisation should be granted for so-called repatriation flights from third countries were alternative – although longer - routes exist.
20. Russian passengers:
Last update: 21 March 2022
To be clarified that a RU national (regardless of any other citizenship), who is not covered by any personal sanctions can freely use any scheduled flight offered by any EU airline.
21. Stakeholders /national authorities responsibility:
Last update: 21 March 2022
In the following cases:
• the private charter flight done via brokers where the nationality is not checked
• flight goes via airport/ business aviation sector where inspections or checks are incidental
• flight operated on the basis of a self-declaration that is in line with the Regulation
We advise that all involved in the booking need to do proper “due diligence” and actively question potential customers, as normal practices do not suffice under this exceptional circumstances. Therefore, if asked to provide an aircraft, your members need to actively question every customer to verify that they are not either themselves Russians or acting on behalf of a Russian entity. They also need to go beyond just asking the passenger to state or sign something and see for example what languages the customers use, how their luggage looks (i.e. signs of frequent Russian travel etc.) or other elements that could help determine what the actual truth is.
If the operator has any doubts then should check with the national authorities. It is important to keep in mind Article 12 of the Regulation concerning the liability for the circumvention of the measures.
In our opinion, the self-declaration is not enough, as may lead to the circumvention of the sanctions. For example, a dual citizenship (RU not declared) should be taken into account.
22. Does Article 3c(5) of Council Regulation 833/2014 applies to the provision of insurance and reinsurance to leasing contracts for aircraft and engines?
Last update: 21 March 2022
Article 3c(5) of Council Regulation (EU) No 833/2014, read in conjunction with Articles 3c(4)(b) and 1(o) of the same Regulation, allows, until 28 March 2022, the provision of insurance or reinsurance to leasing companies for aircraft and engines subject to operating or finance lease arrangements signed before 26 February 2022, including when such aircraft or engine is used in Russia or leased to a Russian person.
23. What is meant by “for use in Russia” in the context of Article 3c of Regulation 833/2014?
Last update: 2 June 2022
The term “for use in Russia” should be understood as covering the sale/supply/transfer/export of goods/services which would be used in Russia, including operations between two points in Russia.
For example, this applies to flights between two points in Russia, whether in connection or not with an international service. Strictly speaking, in-and-out types of operations are not covered by the sanctions. However, as soon as the in-and-out operation is complemented with a service inside Russia (e.g. Istanbul-Moscow-Saint Petersburg-Istanbul), it falls within the scope of the sanctions.
The interpretation of “for use in Russia” is the same for all the paragraphs of Article 3c (on maintenance, repair, insurance, financing…).
The wording ‘for use in Russia’ is a formulation used to avoid the circumvention of the measures as it ensures that products and services sold/supplied/provided to third country persons, but to be used in the country subject to sanctions, are also prohibited.
24. What does the exemption for the sharing of technical information in the framework of International Civil Aviation Organisation entail?
Last update: 27 July 2022
Article 3c(4)(a) provides for a prohibition to provide technical assistance for aviation goods and technology, as listed in Annexes XI and XX, directly or indirectly to any natural or legal person, entity or body in Russia or for use in Russia. Per Article 1(c), technical assistance means any technical support related to repairs, development, manufacture, assembly, testing, maintenance, or any other technical service, and may take forms such as instruction, advice, training, transmission of working knowledge or skills or consulting services, including verbal forms of assistance.
With the exemption for the sharing of technical information in the context of the International Civil Aviation Organization (ICAO), technical data pertaining to EU manufactured products and components listed in Annexes XI and XX can be shared to contribute to the technical standard setting work within ICAO groups and panels even in cases where Russia is, among other countries, a member of these groups and panels.
This measure does not amount to technical assistance to Russia. The provision of direct or indirect technical assistance to any natural or legal person, entity or body in Russia or for use in Russia remains otherwise prohibited.
25. Will Russia benefit from this exemption?
Last update: 27 July 2022
No. The sharing of information in the framework of the International Civil Aviation Organization is necessary to enable the global standard setting for air transport. Such information sharing does not amount to technical assistance to Russia. The provision of direct or indirect technical assistance to any natural or legal person, entity or body in Russia or for use in Russia remains otherwise prohibited.
1. Does the derogation under Article 12b(1) of Council Regulation (EU) No 833/2014 allow the sale to Russian entities of leased aircraft lost in Russia?
Last update: 6 July 2023
Inter alia, Article 12b(1) of Council Regulation (EU) No 833/2014 allows the competent authorities to authorise, by way of derogation from Article 3c, the sale, supply or transfer of goods and technologies listed in Annex XI (including aircraft), until 31 December 2023. Such authorisation can only be granted where such sale, supply or transfer is strictly necessary for: (i) the divestment from Russia or (ii) the wind-down of business activities in Russia.
The aim of such derogation is to facilitate an expeditious exit from the Russian market by EU operators.
This derogation does not allow the competent authorities to authorise the sale to Russian entities of leased aircraft lost in Russia, i.e. aircraft that remain in Russia against the will of their nonRussian owner and despite the latter’s demand for their return.
The leasing of aircraft to a Russian person does not qualify as investment in Russia. Consequently, the owners/lessors of the aircraft cannot be considered as divesting from Russia for the mere fact that they discontinued the supply of aircraft to that country as a consequence of sanctions imposing them to do so since 26 February 2022, for new contracts, and since 28 March, for pre-existing contracts. Similarly, they should not be considered as winding-down business activities in Russia, to the extent that they have already discontinued the supply of the aircraft to Russia for the same reason and from the same dates onwards.
In any event, the sale of the aircraft would not be strictly necessary for the owners of the aircraft to exit the Russian market, as this exit is possible even if the lessors retain ownership of the aircraft.
3. ACCESS TO EU PORTS
RELATED PROVISION: ARTICLE 3ea OF COUNCIL REGULATION 833/2014
1. How is the port access ban monitored?
Last update: 2 May 2022
The monitoring will be done via the Union Maritime Information and Exchange System (which also links to EQUASIS , a public database providing, among other, safety related information on ships and companies). This system supports EU Member States with operational maritime surveillance capabilities in particular by providing the situational maritime awareness picture, tracking any ship movements in near real time. All EU Member States have access to this system and share information via this system.
2. What is meant by the term “relevant international conventions”?
Last update: 2 May 2022
The term refers to SOLAS, MARPOL or Load Lines conventions and the ships falling under their scope (so called convention ships). Effectively, this means ships of 500 GT and beyond (from smaller to the biggest) sailing commercially in international shipping.
3. How can EU port authorities and operators know if a Russian vessel has changed flag?
Last update: 2 May 2022
Every ship worldwide has to be assigned a unique identification number which is provided on behalf of the International Maritime Organization (the ‘IMO number’). The IMO number of the vessel is assigned from the time it is built and remains the same throughout her servicing.
As a result, any attempt to circumvent the sanctions by change of flag could be easily identified by the port authorities through a check of the IMO number of the vessel together with the records onboard the ship. In this regard, under SOLAS (International Convention for the Safety of Life at Sea), the ships are also obliged to keep onboard the synopsis report which tracks the history of change of flags. Also port authorities have access to the monitoring system mentioned above.
4. How to address a ship transporting goods the transport of which may be authorised?
Last update: 2 May 2022
The derogations provided for in Article 3ea(5) are subject to prior authorisation from the relevant national competent authority, which can only be granted under strict and specific conditions. If a ship falling under the scope of the prohibition and carrying goods the transport of which may justify an authorisation to access a port requests access to a port in the Union, it is the responsibility of the port authorities to make a case-by-case assessment and supervise that the unloading concerns only goods falling under the derogations and that their unloading is not otherwise prohibited by the Regulation.
5. Is it prohibited to conduct ship-to-ship operations with Russian flagged vessels?
Last update: 2 May 2022
Ship-to-ship operations can occur in different cases, namely a ship-to-ship operation between a Russian flagged vessel and a third country flagged vessel in international waters, a ship-to-ship operation between Russian and EU-flagged vessels, and a Russian flagged vessel and a thirdcountry flagged vessel in territorial waters of a Member State.
By virtue of the non-circumvention clause (laid down in Article 12), it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in Council Regulation 833/2014, including by acting as a substitute for natural or legal persons, entities or bodies targeted by the Regulation. Accordingly, if a ship-toship operation takes places with the objective or effect of circumventing the prohibition of Article 3ae of Regulation (EU) No 833/2014, such an operation would be caught by this provision. The determining element is that such a ship-to-ship operation is orchestrated in order for a vessel that is not subject to the port access ban to call in an EU port, where otherwise a Russian flagged vessel could not call in.
Per Article 13, the Regulation applies to all vessels that fall under the jurisdiction of Member States and vessels that are present in the territory of the Union.
6. Under the derogations in Article 3ea, how should goods be loaded and unloaded?
Last update: 2 May 2022
National competent authorities need to ensure that each authorised entry fulfils the derogation conditions laid down in Article 3ea of Council Regulation 833/2014. This means that each entry should be authorised individually. Where a vessel has been authorised to call on a port in order to unload goods subject to a derogation, it must obtain a separate authorisation in order to load goods. A cargo-free vessel may be authorised to call on a port in order to load goods.
The loading of goods is limited to what is allowed under the derogations. Article 3ea, points (a) and (e) refer explicitly to the purchase, import or transport into the Union. Accordingly, loading of goods would only be possible if there is a purchase or further transport into another Union port as final destination. It remains to be determined why a Russian-flagged vessel would provide transport services between two EU ports in such a case. Points (b) and (d) allow for an entry into port whether the purchase, import or transport is for the Union or to a third country.
7. Can Russian flagged recreational crafts berthed in EU port remain or leave this port?
Last update: 2 May 2022
Russian flagged recreational ships that were berthed in the port of a Member State before 16 April 2022 do not fall under the scope of the prohibition since their sole presence does not amount to access into a Union port. However, upon leaving a Union port, any request to return would result in calling into a Union port and be prohibited under Article 3ea.
If such a Russian flagged recreational ship, due to its size or technical characteristics, would not be able to leave the territory of the Union upon exiting the port, Member State authorities should not allow its departure, knowing that it would not be allowed to come back into an EU port. Accordingly, a recreational craft should be allowed to leave the port only if it will travel outside the Union territory.
Furthermore, any person or entity listed in Annex I of Council Regulation (EU) 269/2014 is subject to an asset freeze and any of his/her/its assets, including recreational crafts, should be frozen.
8. Can a Russian flagged vessel which entered an EU port under the exemption in paragraph 4 be authorised to leave?
Last update: 2 May 2022
The national competent authority must ascertain that the ship is entering under the conditions deemed necessary for in paragraph 4. The port access ban does not require blocking a ship which would have entered in accordance with this exemption, hence it may leave the port.
9. Are fishing vessels excluded from the scope of Article 3ea of Regulation 833/2014?
Last update: 5 May 2022
As mentioned in Q2 above, the relevant international conventions are SOLAS, MARPOL and Load Lines (LL) Conventions. As a result, “fishing vessels” are included in the sanction regime only in case they hold any “certificate” issued in accordance with SOLAS, MARPOL or Load Lines (LL) Conventions. Accordingly, at least any fishing vessel certified in accordance with MARPOL ANNEX IV has to be considered as “ship” for the purpose of Article 3ea(3)(a) of Council Regulation (EU) 833/2014 and falls within the scope of the ban.
10. Is a bareboat charter out under Russian flag reverting to an EU Member State flag register caught by the prohibition in Article 3ea paragraph 2?
Last update: 10 October 2022
Article 3ea covers all Russian flagged vessels, as well as vessels that change their Russian flag or their registration, to the flag or register of any other State after 24 February 2022. Hence, where a bareboat charter sailing under Russian flag reverts to its underlying EU Member State flag or any other flag after 24 February, she should be considered as flying the Russian flag in accordance with Article 3ea paragraph 2. Hence, such a bareboat charter is caught by the prohibition to access EU ports.
If applicable, such vessels may benefit from the exemption or derogations in paragraphs 4, 5, 5a and 5b
11. Can a Russian flagged ship which changes both ownership and flag after the 24 February trade on EU ports?
Last update: 18 May 2022
Article 3ea covers all Russian flagged vessels, as well as vessels that change their Russian flag or their registration, to the flag or register of any other State after 24 February 2022. This prohibition applies irrespective of the ownership of the ship.
12. Was the port access ban extended by the 8th package?
Last update: 10 October 2022
Paragraph 1a of Article 3ea prohibits access to EU ports to any vessel that is certified by the Russian Maritime Registry of Shipping. This prohibition applies irrespective of a vessel’s flag state. The prohibition will be applicable from 8 April 2023.
13. In Article 3ea, paragraph 1a restricts access to ports and locks in the territory of the Union to any vessel certified by the Russian Maritime Register of Shipping. How should ‘vessel’ be understood?
Last update:24 July 2023
The prohibition set out in Article 3ea, paragraph 1a, applies to all vessels certified by the Russia Maritime Register of Shipping. The specific definition of vessel set out in paragraph 3 of this article does not apply to this paragraph. Therefore, all vessels certified by the Russian Maritime Register of Shipping, irrespective of their type or size, are prohibited from accessing ports and locks in the territory of the Union.
14. In Article 3ea, paragraph 1a, how should ‘certified’ by the Russian Maritime Register of Shipping be understood?
Last update:24 July 2023
This provision covers any vessels which hold any type of statutory and/or classification certification issued by or on behalf of any flag State by the Russian Maritime Register of Shipping.
The EU has withdrawn the recognition of the Russian Maritime Register of Shipping to act as a recognised ship inspection and survey organisation in the EU , hence EU-flagged vessels are no longer allowed to have any such certificates. Non-EU flagged vessels with such certifications are banned from ports and locks in the territory of the Union.
15. Can access to ports and locks in the territory of the Union be granted to a vessel that has changed its Russian flag or its registration, to the flag or register of any other State after 24 February 2022, in case it is in need of assistance seeking a place of refuge, or in case of an emergency port call for reasons of maritime safety, or for saving life at sea?
Last update: 24 July 2023
Article 3ea, paragraph 4, provides that the competent authority may provide access to a vessel subject to the prohibitions if it is in need of assistance seeking a place of refuge, for an emergency port call for reasons of maritime safety, or for saving life at sea. This includes vessels that flew the Russian flag prior to 24 February 2022.
16. Do the prohibitions to access ports and locks in Article 3ea, 3eb and 3ec apply to anchorage areas?
Last update: 24 July 2023
As stated in recital 36 of Council Regulation (EU) 2023/1214, the prohibitions relating to port access apply to any vessel, whether it is moored at a port or at anchorage within the jurisdiction of a port of a Member State.
In the case of the Gulf of Finland, those prohibitions relate to any vessel, whether it is moored at a port or at anchorage that is located in the territorial waters or internal waters of a Member State.
In addition, Article 2 point 7 in Directive 2009/16/EC on port State control, covers, if so declared, anchorages: ‘Ship at anchorage’ means a ship in a port or another area within the jurisdiction of a port, but not at berth, carrying out a ship/port interface.
17. Which vessels are concerned by the prohibitions set out in Articles 3eb and 3ec?
Last update: 24 July 2023
These prohibitions apply to vessels irrespective of their flag of registration calling into a port or lock in the territory of the Union, namely tankers since the provision relates to the transport of Russian crude oil or petroleum products.
18. Articles 3eb and 3ec refer to ship-to-ship transfers or AIS interference at “any point of a given voyage to a Member State’s ports or locks”, how should ‘voyage’ be understood?
Last update: 24 July 2023
The voyage refers to the route the vessel undertakes from the moment it loaded the oil or petroleum products cargo, for as long as it is under way or at sea, such as a vessel laying idle. This covers both direct and indirect routes, irrespective of deviations which occurred from the loading of the Russian oil cargo to the calling at a port or lock in the territory of the Union.
19. How long is a vessel prohibited from accessing ports and locks in the territory of the Union if it is suspected of breaching the prohibitions in Article 3m and 3n by operating a ship-to-ship transfer or turned off its AIS navigation system, by application of Articles 3eb and 3ec?
Last update: 24 July 2023
Such a vessel is prohibited from accessing ports and locks in the territory of the Union as long as it is suspected of breaching the prohibitions in Articles 3m and 3n. Accordingly it cannot access any port or lock in the territory of the Union as long as it transports the relevant cargo of Russian crude oil or petroleum products.
20. If a ship-to-ship transfer takes place and the competent authority has reasonable grounds to suspect a breach of Articles 3m or 3n, are all vessels involved in this operation prohibited from accessing ports and locks in the territory of the Union?
Last update: 24 July 2023
Yes. Due to the ship-to-ship transfer, all participating vessels are suspected of being involved in the breach related to the ongoing transport. Accordingly, these vessels cannot be granted access to any port and lock in the territory of the Union.
21. How do the prohibitions in Articles 3eb and 3ec relate to other maritime safety provisions and prohibitions, such as the banning under the port State control Directive 2009/18/EC or the banning of single hull oil tankers in Regulation (EU) No 530/2012?
Last update: 24 July 2023
The maritime safety network as established and provided for in EU law, including in particular Directive 2009/18/EC on port State control, Regulation (EU) No 530/2012 on the accelerated phasing-in of double-hull or equivalent design requirements for single-hull oil tankers, Directive 2002/59/EC on VTMIS and, Directive 2009/20/EC on the insurance of shipowners for maritime claims and in particular Article 5.2 therein, remain unaffected and applicable for any voyage and port call to the EU Member States or along EU Member States coastlines. These apply to any offence committed at any point irrespective of when the voyage took place.
22. If a vessel was involved in a breach of the port access ban prohibitions in Articles 3eb or 3ec, but is later sold on to another owner or chartered to another company, can it access ports and locks in the territory of the Union?
Last update: 24 July 2023
As stated in FAQs 19 and 20, a vessel is prohibited from accessing ports and locks in the territory of the Union as long as it is suspected of breaching the prohibitions in Articles 3m and 3n. Accordingly it cannot access any port or lock in the territory of the Union as long as it transports the relevant cargo of Russian crude oil or petroleum products.
That prohibition thus ceases once the suspicion has been cleared or the cargo has been unloaded, hence the subsequent owner will not be affected by it. Of course, if the sale occurs while the suspicion remains or the cargo is still on board, then the prohibition remains.
23. Are vessels calling into ports and locks in the territory of the Union under an obligation to notify ship-to-ship transfers under the Sanctions Regulation?
Last update: 24 July 2023
As required by paragraph 2 of Article 3eb, vessels must notify a scheduled ship-to-ship transfer occurring in the exclusive economic zone of a Member State or within 12 nautical miles from the baseline of that Member State’s coast, at least 48 hours in advance. Accordingly, where such an operation has not been notified, competent authorities should not grant access.
24. Can a vessel that has been refused access in a Member States’ port or lock on the basis of Articles 3eb or 3ec call into another port or lock in the territory of the Union?
Last update: 24 July 2023
Where a vessel has been refused access, the competent authorities of this Member State will immediately notify all other relevant competent authorities, including port authorities, via the existing arrangements at their disposal and provided by EMSA. This notification obligation aims at avoiding ‘port/forum shopping’ by vessels. Based on the mutual trust and cooperation that competent authorities should award one another, Member States should refuse access once they receive notification of a refusal that has been issued by any other competent authority.
25. How should ‘illegally interfering, switching off or otherwise disabling the automatic identification system’ be understood in Article 3ec?
Last update: 24 July 2023
This provision also concerns instances in which a vessel deliberately provides false information by AIS.
Ships are prohibited from illegally interfering, switching off or otherwise disabling except in a situation of imminent danger. It may be the case that a short interference or switching off is accidental, in which case such incidents should be logged.
Such occurrence should be appreciated as part of the broader activity of the vessel. However, disablement for longer periods is an indication that suspicious activity is ongoing. Competent authorities can require and check a vessel’s AIS records, via the integrated maritime services in the Union Maritime Information and Exchange System to ascertain whether the AIS was switched off, gaps in signals or providing ‘incorrect or false’ positions.
That prohibition does not apply in circumstances where the navigation system can be legitimately turned off in accordance with international agreements, rules or standards that provide for the protection of navigational information, such as navigation through high-securityrisk waters.
26. How should Member States competent authorities monitor ship-to-ship transfers or the illegal interfering or turning off of a vessel’s AIS?
Last update: 24 July 2023
The Commission, with the assistance of the European Maritime Safety Agency (EMSA), will support Member States in the monitoring and notification of suspicious ship-to-ship transfers and incidents of illegally interfering with, switching off or otherwise disabling the shipborne AIS, e.g. for tankers navigating within the 200 nautical miles limit from Member States’ coastlines.
It will, in addition to any national system and information, facilitate and support the continuous maritime surveillance and situational awareness at sea as well as exchange and sharing of information using the Union Maritime Information and Exchange System.
27. Articles 3eb and 3ec provide that port access should not be granted if a competent authority has « reasonable cause to suspect » that the vessel is in breach of the relevant prohibitions. How should Member States competent authorities assess a suspicious ship-to-ship transfer or interference/turning off a vessel’s navigation system?
Last update: 24 July 2023
The competent authority should conduct an assessment on the basis of a risk analysis.
Accordingly, it should determine whether there are objective indicators from which it can infer knowledge or form suspicion that a vessel (or vessels) is breaching the prohibitions set out in Article 3m (prohibition to import Russian oil) and 3n (prohibition to transport Russia oil above the price cap). This is a factual, evidence-based, risk assessment.
28. What should Member States competent authorities’ consider when making such a risk analysis?
Last update: 24 July 2023
The risk assessment can be based on many indicators, that should be weighed as is most relevant based on a specific case.
Such assessment can be aggregated from multiple sources such as [non-exhaustive list]:
- Port of origin and port of calls during the voyage, including mooring at anchorage
- Insurer and coverage of insurance
- Cargo declarations
- Proof of carrying price capped Russian crude oil or petroleum products
- Route the vessel has undertaken in light of the notified cargo to be transporting, and explanations provided in that regard
- History of a vessel’s activities, including security notifications
- Past track-record of denials to enter Member States’ ports
- Information shared by other Member States, in particular neighboring countries, or the Commission
- Compliance with notification obligations
For ship-to-ship transfers:
- Previously operated ship-to-ship transfers
- Compliance with mandatory notifications and reporting obligations for ship-to-ship transfers under EU and international law, including for the transport of dangerous goods or polluting goods, namely crude oil and petroleum products, as well as security notifications
For AIS switching off or manipulations:
- Frequency of occurrence
- Length of occurrence
- Area of occurrence
- Explanations provided by the vessels when asked about the reasons for the occurrence
- Reasonableness of the route taken by the vessel prior to, or after turning off the AIS, and of the location of the vessel when the AIS was turned off
- Publicly available information about illegal oil operations happening in the area of the occurrence
The Commission with the assistance of the European Maritime Safety Agency (EMSA) will publish notices of behavior at risk of breaching maritime sanctions.
29. What sort of notification obligations can a competent authority take into account when assessing whether it has reasonable cause to suspect a breach of Articles 3m and 3n?
Last update: 24 July 2023
Vessels must comply with various notification obligations under Union and international law depending, amongst others, on their location and the type of cargo they are transporting, for instance there is a reporting of incidents and accident at sea requirement under Union law . Member States shall monitor and take all appropriate measures to ensure that the master of a ship within their search and rescue region/exclusive economic zone or equivalent, immediately reports to the coastal station responsible for that geographical area, any incident or accident affecting the safety of the ship and/or, any situation liable to lead to pollution of the waters or shore of a Member State, such as the discharge or threat of discharge of polluting products into the sea (which is an inherent risk when performing e.g. STS operations).
In addition, there is also an obligation to notify to the coastal State 48 hours in advance about a ship-to-ship transfer per Annex I to the International Convention for the Prevention of Pollution from Ships, Regulation 42 (MARPOL) and specifies the minimum information to be included in such notifications.
Furthermore the mandatory reporting obligation for Security Notifications also covers ship-toship transfers. The ship-to-ship transfers must be reported at the same time as the last ten port calls. This applies to international voyages for ships over 500GT.
Accordingly, the current or past compliance with such reporting obligations is a factual element that can be taken into account by a competent authority when assessing whether there is a reasonable cause to suspect a breach of Articles 3eb and 3ec. The competent authorities can also check a vessel’s history of compliance, for instance with paragraph 2 of Article 3eb.
4. ROAD TRANSPORT
RELATED PROVISION: ARTICLE 3l OF COUNCIL REGULATION 833/2014
1. What criteria should be applied by the competent authorities of a Member State to determine that the transport of goods by a road transport undertaking established in Russia or Belarus is necessary and, therefore, shall be authorized? Who should bear the burden of justification the necessity (Russian or Belarussian carrier, consignor, consignee, etc.)?
Last update: 8 June 2022
Article 3l of Council Regulation 833/2014 does not specify the procedures and conditions for its practical application, but allows Member States’ national competent authorities (NCAs) to decide what is most appropriate in a given case. For instance, it will be for the NCA to determine the necessity of a transport of permitted goods based on the justifications received for that transport, the nature of the goods, their use etc. Being a derogation from the general rule, the possibility to grant authorisations should be appreciated restrictively.
However, the demonstration of the necessity of a road transport should be possible even where the transport of goods by a road transport undertaking established in Russia or Belarus is not the only way in which the transport can occur. All necessary information can and should be requested from the applicant for an authorisation.
It is for the transporter to be authorised to carry out the transport in the EU territory, because the prohibition is placed on road transport undertakings. However, NCAs are free to accept authorisation requests made on behalf of the transporter by other persons and entities involved in the relevant transaction, such as the importer or the consignor, if national law allows that.
2. Should an authorization be granted to a single shipment, to a transport company or, more generally, to specific transport operations?
Last update: 8 June 2022
National competent authorities need to ensure that each authorised transport fulfils the derogation conditions laid down in Article 3l of Council Regulation 833/2014. This means that each transport should be authorised individually. However, if national law allows, and if the national competent authority is sure that a given series of transports will be identical, or are part of the same transaction concerning the same authorised goods (for instance, several shipments of the same items), they can also issue a broader authorisation under the conditions they deem appropriate.
Authorisations granted under Article 3l, paragraph 4(a) of Council Regulation 833/2014 concerning transport into the Union of natural gas and oil including refined petroleum products, as well as titanium, aluminium, copper, nickel, palladium and iron ore refer explicitly to the purchase, import or transport into the Union. Accordingly, this cannot cover any exports to Russia or Belarus.
Authorisations granted under Article 3l, paragraph 4(b) of Council Regulation 833/2014 concerning transport of pharmaceutical, medical, agricultural and food products allows for the import, purchase and transport into the Union or to a third country including Russia or Belarus.
3. Which Member State needs to grant the authorisation?
Last update: 24 June 2022
Under Article 3l of Council Regulation 833/2014, the national competent authorities of the Member State through which the goods are transported should grant the authorisation. This authorisation does not, in and of itself, bind any other Member State.
However, by virtue of the principle of sincere cooperation, Member States should collaborate to avoid disproportionate administrative burdens in dealing with transports crossing several national territories. Nothing prevents Member States from recognising each other’s authorisation decisions, or proactively reaching out to the NCAs of the transit Member States when granting such an authorisation. For instance, when goods are loaded in a Member State, it will likely be for that Member State to grant the first authorisation for the transport by the Russian or Belarussian road carrier. The Member State having granted the authorisation should notify all other Member States where the authorised transport needs to transit.
The notification between Member States can take place through any mean agreed by the concerned Member States.
The Member States should report any authorisation granted within two weeks of the authorisation by saving them in the FSOR. Given that users' notification is not automatically ensured by FSOR, member states can still notify the authorisation granted by sending it to the functional email address road_transport_sanctions@ec.europa.eu. To streamline reporting, member states are invited to share the same content via both FSOR and the above-mentioned functional mail address.
4. How should Member States’ authorities treat road transport companies established in Russia and Belarus after 16 April 2022?
Last update: 14 April 2022
With regard to Russian or Belarussian transporters which are still in the EU territory after the grace period provided for in Article 3l of Council Regulation 833/2014, please note first that this provision forbids those carriers to transport goods by road within the Union. An unloaded Russian or Belorussian truck is not forbidden from circulating in the Union, but would fall under the scope of the prohibition if it loads cargo at any time. Please also note that Article 12 of the Regulation provides that it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in the Regulation.
Accordingly, after 16 April, Russian or Belorussian vehicles with cargo should not be allowed to circulate within the territory of the Union. The wind-down period of 7 days was included to give such vehicles a reasonable amount of time to leave the territory of the Union. Infringements should be addressed at the location they are detected. The prohibition does not require Member States to detain Russian or Belorussian vehicles which are unloaded. Regarding cargo, NCAs should take the measures they consider necessary in light of the situation and as permissible under their national law, with respect to the principle of proportionality.
5. How should Member States’ authorities treat road transport companies established in Russia after 16 April 2022 when these carry out goods transit between mainland Russia and the Kaliningrad region?
Last update: 13 July 2022
Under Article 3l of the Regulation, road transport undertakings established in Russia are prohibited to transport goods by road within the territory of the Union, including in transit. However, this ban does not apply to the transport of goods in transit through the Union between the Kaliningrad Oblast and Russia, provided that the transport of such goods is not otherwise prohibited under the Regulation. Transit of sanctioned goods by road is therefore not allowed.
It falls on Member States to take the appropriate steps to prevent all possible forms of circumvention through the enclave of Kaliningrad.
Member States should continue monitoring the two-way trade flows between mainland Russia and this region, in particular by checking whether transit volumes increases significantly over time. They should carry out targeted, proportionate and effective controls and other measures deemed necessary.
6. Are Russian and Belarussian road transport operators prohibited from transporting people and their personal belongings (e.g. tourists, journalists, diplomats) or does the prohibition only cover freight transport?
Last update: 14 April 2022
Only the transport of goods by road is targeted by Article 3l of Council Regulation 833/2014. However, attention must be paid to avoid that Russian and Belarussian road transporters circumvent the prohibition by transporting passengers as a cover for freight.
7. What is the impact for EU road transport operators operating within Russia and Belarus?
Last update: 8 June 2022
This measure only targets road transport undertakings established in Russia or Belarus. Therefore, EU road transport operators are not concerned.
8. Does the diplomatic exemption in Article 3l(4)(d) cover third-country embassies?
Last update: 8 June 2022
Yes, this exemption does cover third-country embassies since 4 June 2022 (see Council Regulation (EU) 2022/879).
9. What is the scope of the exception for mail set out in Article 3l(2)(a)?”
Last update: 8 June 2022
The exception in Article 3l 2(a) allows postal items that are part of the universal service and originating in Russia to continue to be transported from Russia to a Member State in the EU (to the international office of exchange of the destination Member State) or for mail to cross the EU when transported to or from a third country. This concerns Russian domestic and international standard letters and parcels, as well as periodicals.
This exception does not apply to postal items containing goods which are otherwise prohibited to transport. Also, it only applies to postal items collected by the Russian Post, which is the designated postal universal service provider in the Russian Federation. In case the Russian Post uses other road transport undertakings to transport postal items to/through the EU, the exemption would only apply to the postal items transported by these undertakings and not to other goods they may carry.
10. Why did the 11th package introduce an extension of the road transport prohibition in a new paragraph 1a?
Last update: 30 June 2023
The extension of the road transport prohibition in Article 3l aims at countering circumvention of sanctions by companies using trailers and semi-trailers registered in Russia but hauled by trucks that are themselves not necessarily registered in Russia. Indeed, the transport of sanctioned goods by road transport companies not registered in Russia have been observed in the EU and was so far not concerned by the prohibition in paragraph 1. The new paragraph 1a intends to fill in that gap, tackling the cases where the goods are transported by companies using trailers and semi-trailers registered in Russia.
11. In paragraph 1a, what does “other countries” refer to?
Last update: 30 June 2023
Paragraph 1a prohibits the transport of goods within the Union by road transport companies, carried out by means of trailers or semi-trailers registered in Russia, including if those are hauled by trucks registered in “other countries”. This latest refers to any country that is not Russia, whether it is a Member State or a third country.
5. STATE-OWNED ENTERPRISES
RELATED PROVISION: ARTICLE 5aa OF COUNCIL REGULATION 833/2014
1. What is prohibited under Article 5aa?
Last update: 11 May 2022
This provision prohibits the conclusion of new contracts after 16 March 2022 with the legal persons contained in the Annex. The prohibition also applies to the execution of existing ones after 15 May 2022 or to the provision of any sort of economically valuable benefit (such as services or payments), even in the absence of such contractual relationship. The article does not prescribe the consequences that the prohibition should have on any ongoing contractual relations; an EU operator should take the measures necessary in light of its specific situation to halt its dealings by the end of the wind-down period on 15 May 2022.
2. What does “acting on behalf or at the direction of” mean?
Last update: 23 October 2023
Article 5aa(1)(c) prohibits to directly or indirectly engage in any transaction with a legal person, entity or body ‘acting on behalf or at the direction of’ an entity referred to in point (a) or (b) of this Article 5aa(1). Article 5aa(1)(c) seeks to address situations where an entity in Annex XIX attempts to circumvent the application of EU sanctions, for instance by changing the formal ownership of a company to side-step the application of Article 5aa (1)(b).
Guidance has been provided by the Commission to support such determinations, such as the criteria listed in the Commission opinion dated 17 October 2019. It addresses this notion of ‘acting on behalf or at the direction’ and notably this excerpt: “Ownership or control of the [targeted person/entity over the other entity] is an element that can be considered […] to increase the likelihood of [acting on behalf or at the direction of the targeted person/entity], but cannot suffice in determining whether the conduct did occur. In the absence of a definition and/or criteria that can be used to assess whether an entity acted on behalf or at the direction of a targeted entity, the NCA should take into account all the relevant circumstances in order to establish the situation at hand. These can include, for example, the precise ownership/control structure, including links between natural persons; the nature and purpose of the transaction, coupled with the stated business duties of the entity that is owned or controlled; previous instances of acting on behalf or at the direction of the targeted entity; disclosure made by third parties and/or factual evidence indicating that directions were given by the targeted entity”.
For instance, a company previously falling under the scope of Article 5aa(1)(b) is likely to be ‘acting on behalf or at the direction of’ an entity in Annex XIX (Article 5aa(1)(c)) if the ownership structure of the company is modified to reduce the shareholding owned by the entity in Annex XIX to 50% or below according to the ownership designation criterion, in particular where the share transfer is operated within the same corporate group and/or the transfer occurs close to the date of inclusion into Annex XIX of the relevant entity or of the issuance of guidance clarifying the implementation of the measure and/or if any material influence over the relevant entity is maintained (e.g. veto rights or any other influence over the management of the entity). In such a situation, there are reasonable grounds to suspect that the share transfer has been put in place in bad faith to camouflage the effective ownership or control and to circumvent the applicability of Article 5aa.
Based on such a determination, the prohibition requires that any provision of an economically valuable benefit in favour of the entity ‘acting on behalf or at the direction of’ be terminated. Where the termination of transactions with such an entity could affect the security of supply, operators should allow for a sufficient wind-down period (e.g. 60 days) to avoid unintended consequences before halting ongoing operations.
3. Regarding the scope of the exception provided in Article 5aa(2) of Council Regulation (EU) 833/2014, in the context of a credit agreement, do we understand correctly that “execution” means that the credit line can be drawn until 15 May 2022, with the subsequent repayment after such date? Or both also the repayment has to happen before 15 May 2022?
Last update: 16 June 2022
The intention of Article 5aa is to prohibit all dealings with the legal persons listed in the Annex. In this regards, repayments in the context of a credit agreement are covered by this transaction ban since they amount to the execution of a contract and should have been finalised by 15 May 2022.
However, since 3 June 2022, in accordance with Council Regulation (EU) 2022/879, the reception of payments due by the legal persons, entities or bodies referred to in paragraph 1 pursuant to contracts performed before 15 May 2022 is allowed under paragraph 2a.
4. Does Article 5aa(3)(c) of Regulation 833/2014 permit the purchase of Annex XXI coal products from an entity listed in Annex XIX, in circumstances where the contract is entered into after 9 April 2022?
Last update: 30 June 2023
Article 5aa(3)(c) should be read in conjunction with former Article 3j, in particular the winddown period provided for in paragraph 3. Accordingly, transactions falling under the scope of Article 5aa(3)(c) were possible until 10th August 2022 only for contracts concluded before 9 April 2022.
As explained in recital 51 of Council Regulation (EU) 2023/1214 (“11th sanctions package”), which entered into force on 24 June 2023, Article 3j and Annex XXII were deleted because the prohibition concerning coal imports is covered by Article 3i and Annex XXI of Regulation (EU) No 833/2014.
5. Does the prohibition under Article 5aa extend to the provision of legal services to entities listed in Annex XIX?
Last update: 16 June 2022
With regards to the provision of the related legal services, Article 5aa should be interpreted in light of the fundamental rights protected under the Charter, in particular the right of defence. This provision does not affect the provision of services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy as referred in Article 47 of the EU Charter of Fundamental Rights and Article 6 of the European Convention on Human Rights.
6. Does an EU operator engage indirectly with an entity targeted by Article 5aa if it provides insurance coverage to a vessel calling into a port owned by this entity?
Last update: 25 March 2024
The provision of insurance coverage for a vessel calling into a port owned by an entity listed in Annex XIX is not prohibited under Article 5aa as the provision of insurance to this vessel is not a direct or indirect transaction with the entity.
However, should the insured damage materialise, an EU insurer would only be allowed to make a direct payment to the port or reimburse liabilities for damages occurring in such a port if the latter is owned by an entity targeted by Article 5aa and listed in Annex XIX if the purpose of the entry into the port of the vessel was the transport of goods as provided in an exemption under paragraphs 3(a),(aa) and (f) which relate to the purchase, import, transport of certain goods.
6a. Can an EU insurer provide and pay out an insurance claim for a damage that has occurred in a port owned by an entity in Annex XIX?
Last update: 25 March 2024
Under the exemptions in Article 5aa, paragraphs 3(a), (aa) and (f) which allows certain transactions, including the transport of certain goods, EU insurers can provide coverage to vessels calling a port owned by an entity in Annex XIX.
Where the insured damage materialises, the payment of a claim directly to the port or the reimbursement of liabilities to the policyholder is lawful provided the necessary due diligence was carried out to ascertain that the damage occurred for the transport of the products referred to under paragraphs 3(a), (aa) and (f) and under the conditions described in the Article. For further information on the Oil Price Cap, please refer to the dedicated FAQs.
7. The Russian Maritime Registry of Shipping was already subject to EU sanctions, what is the difference with the current measure?
Last update: 10 November 2022
On 9 March 2022, the Russian Maritime Registry of Shipping (‘RMRS’) was added to the list of entities subject to financing limitations via loans, transferable securities and money market instruments (Article 5, paragraph 4, Council Regulation 833/2014).
On 7 October 2022, the Council decided to subject this entity to a transaction ban under Article 5aa of Council Regulation 833/2014. This measure prohibits the carrying out of any transaction, including for the provision of any sort of economically valuable benefit to the Russian Maritime Registry of Shipping. Such transactions cannot, for instance, be carried out by any EU vessel or any company incorporated or constituted under the law of a Member State, irrespective of where it is located. This prohibition also applies within the territory of the Union and where business is done in whole or in part within the Union (per Article 13 of Council Regulation 833/2014). EU sanctions do not apply extra-territorially, hence Article 5aa does not prohibit foreign operators, including non-EU vessels, from transacting with RMRS outside of the EU e.g. receive certification.
8. Can a non-EU vessel with RMRS certification enter EU territorial waters?
Last update: 10 November 2022
Yes. EU sanctions do not prohibit the recognition of an RMRS certificate required to enter EU territorial waters. From 8 April 2023, all vessels with an RMRS certification will be prohibited access to EU ports (see FAQs relating to the port access ban provision, Article 3ea of Council Regulation 833/2014). However, the access to ports of such vessels remains allowed, subject to an authorization by the national competent authorities, for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers.
9. Can the Russian Maritime Registry for Shipping still act as an EU ‘Recognised Organisation’?
Last update: 18 October 2022
The EU has withdrawn the recognition of the Russian Maritime Register of Shipping to act as a recognised ship inspection and survey organisation in the EU (so-called ‘Recognised Organisation’) with immediate effect . This means that an EU flag State can no longer enter into, or renew, any authorisations with RMRS nor delegate any work to it. Likewise, the Member States cannot delegate any verification in the ship security field or any safety inspection for the inland waterways purposes.
10. What does the placing of the Russian Maritime Registry for Shipping in Annex XIX imply for Member States’ obligations?
Last update: 18 October 2022
It is necessary for Member States that still have any delegations with this entity to withdraw these for the measure to take full effect. Accordingly, Article 1ab, paragraphs 1, 4, and 5 of Council Decision 2014/512/CFSP sets out a timeframe for the Member States to arrange for an orderly wind-down of such authorisations.
Any EU Member State as flag State having delegated any work to the Russian Maritime Register of Shipping for maritime safety related work on ships must withdraw those authorisations before 5 January 2023 (Article 1ab, paragraph 1).
The same wind-down period and end date, 5 January 2023, applies for any authorisation by any EU flag State to RMRS to act as a ‘Recognised Security Organisation’ (Article 1ab, paragraph 4).
The wind-down period for any authorisations to RMRS to perform any work on Inland Waterway ships is earlier and should be done before 6 November 2022 (Article 1ab, paragraph 5).
Until such authorisations have been withdrawn, Member States shall not allow, or grant a delegation to, the Russian Maritime Register of Shipping to perform any of the tasks which, in accordance with Union rules on maritime safety, are reserved to organisations recognised by the Union, including to undertake inspections and surveys related to statutory certificates as well as to issue, endorse or renew the related certificates.
11. When will statutory certificates issued by the Russian Maritime Registry of Shipping to economic operators be invalidated?
Last update: 18 October 2022
Statutory certificates issued on behalf of a Member State by RMRS to any EU flagged ships or inland waterway vessels before 7 October 2022 will expire on the date indicated on the certificate without possibility of renewal, if not withdrawn before that date by the national competent authorities. They will in any case cease to be valid by the 8 April 2023 at the latest (Article 1ab, paragraphs 2 and 6 of Council Decision 2014/512/CFSP).
This applies with regards to maritime safety , maritime security and for inland navigation .
EU flagged vessels still having RMRS certification can remain under the same EU flag, and can have new certificates issued on their behalf by another EU ‘Recognised Organisation’ after a transfer of class, or by the flag State itself.
12. Can a currently EU recognised organisation work with RMRS for the purpose of transfer of class?
Last update: 18 October 2022
Yes. EU recognised organisations that have been delegated to undertake the inspection and certification of ships classed or certified for statutory purposes until now by RMRS could continue working with RMRS for the purposes of transfer of class until 8 April 2023.
13. Does Article 5aa prohibit transactions with the Russian Maritime Register of Shipping for the transport of agricultural and food products?
Last update: 8 March 2023
No. The transaction ban contains an exemption for transactions necessary for the purchase, import or transport of agricultural and food products, including wheat and fertilisers whose import, purchase and transport is allowed under Council Regulation (EU) 833/2014.
Accordingly, under this exemption, EU operators such as EU insurance providers can provide the services to RMRS, directly or indirectly, if they are necessary for the purchase, import or transport of such products without having to request an authorisation to a Member State.
EU sanctions do not apply extra-territorially, hence Article 5aa does not prohibit operators that are not established under the jurisdiction of an EU Member State, including non-EU vessels, from transacting with RMRS outside of the EU, for purchase, import or transport in the aforesaid products.
14. Does Article 5aa prohibit transactions with a company that is minority owned by an entity listed in Annex XIX?
Last update: 30 June 2023
Article 5aa does not apply to companies in which an entity or entities listed in Annex XIX owns a minority shareholding (meaning that proprietary rights are directly or indirectly owned for less than 50 % by an entity listed in Annex XIX), except if such a company is found to be acting on the behalf or at the direction of an entity listed in Annex XIX (Article 5aa paragraph 1(c)).
Accordingly, it is necessary to assess, on a case-by-case basis, whether such a minority owned company is owned directly or indirectly for more than 50% or is acting on behalf of or at the direction of the entity listed in Annex XIX. Please refer to FAQ 2 for more information regarding this assessment.
Moreover, the fact that an entity listed in Annex XIX holds a minority ownership interest in a company, even where such a company carries out a project located in Russia, does not mean that an EU operator would automatically ‘directly or indirectly engage in transactions’ with a person listed in Annex XIX or with an entity acting on behalf or at the direction of that entity. In such a scenario, it is required to make a case-by-case assessment for each transaction.
15. Are maintenance and repair services considered strictly necessary for the purposes of Article 5aa paragraph 3(aa)?
Last update: 30 June 2023
Unless prohibited under Article 3m or 3n as well as Article 3f, it is possible to provide or receive maintenance and repairs services to vessels transporting natural gas, oil, or refined petroleum products from or through Russia required for concerns of maritime safety. Other services, such as tug services can also be provided.
16. Sovcomflot is subject to the transaction ban in Article 5aa of Council Regulation (EU) 833/2014. Since 24 June 2024, Sovcomflot is also subject to an asset freeze and a prohibition to provide funds or economic resources to it, under Council Regulation (EU) 269/2014. Under the transaction ban in Article 5aa of Council Regulation (EU) 833/2014, Sovcomflot benefits from the exemptions in paragraph 3 of that article. Can Sovcomflot benefit from such exemptions after its listing in Council Regulation (EU) 269/2014 on 24 June 2024?
Last update: 2 July 2024
As stated in FAQs 18 and 19 on General Questions, the prohibitions set out in Council Regulation (EU) 269/2014 and 833/2014 apply independently. If a specific action is prohibited under Council Regulation (EU) 269/2014, an exception in Council Regulation (EU) 833/2014 cannot be relied upon to exempt an operator from the prohibition in Council Regulation (EU) 269/2014.
The asset freeze and prohibition to provide funds or economic resources provided for in Council Regulation (EU) 269/2014 apply in full to Sovcomflot, subject only to possible exceptions contained in Council Regulation (EU) 269/2014. The exceptions in Council Regulation (EU) 269/2014 can only be relied upon in as far as they do not conflict with the prohibition laid down in Article 5aa of Council Regulation (EU) 833/2014. Any exceptions in Council Regulation (EU) 833/2014 are irrelevant for the asset freeze measures.
Accordingly, it is prohibited for EU operators to provide any funds or economic resources to Sovcomflot. It is also prohibited to provide any funds or economic resources to vessels owned by Sovcomflot as it can be presumed that any funds or economic resources made available to those vessels would reach or benefit Sovcomflot. See FAQs on Assets freeze and prohibition to provide funds or economic resources.
The provision of funds or economic resources to vessels owned by Sovcomflot is prohibited irrespective of whether the oil transported by such vessels was purchased at or below the Oil Price Cap. The exemption set out in Article 5aa of Council Regulation (EU) 833/2014 (Article 5aa(3)(aa)) cannot apply.
6. PUBLIC PROCUREMENT
RELATED PROVISION: ARTICLE 5k OF COUNCIL REGULATION 833/2014
1. What is the purpose of these Questions and Answers?
Last update: 12 May 2022
The adopted sanctions against Russia are unprecedented, have broad consequences and take immediate effect. These Q&A aim at supporting EU public buyers in their implementation, by explaining their logic and advising on application. However, the Q&A themselves are not legally binding and do not replace the relevant legal provisions.
2. What is the scope of the sanctions?
Last update: 12 May 2022
The sanctions cover ongoing and future public procurement procedures, as well as awarded public contracts and concessions.
They apply to a majority of public procurement contracts covered by the EU public procurement Directives (Directive 2014/23/EU ; 2014/24/EU ; 2014/25/EU ; 2009/81/EC ) and to a big part of the contracts excluded from their scope.
3. From when are the sanctions applicable?
Last update: 12 May 2022
The sanctions are applicable from 9 April 2022. From this day, new contracts falling under the prohibition should not be signed and starts the period for termination of existing contracts falling under the prohibition (except for coal contracts falling under the prohibition which should be terminated immediately if execution for further 4 months was not authorised under Article 5k(2)(f) of the Sanctions Regulation).
4. When shall the sanctioned contracts be terminated?
Last update: 12 May 2022
Ongoing contracts shall be terminated by 10 October 2022, except for specific cases authorised in accordance with paragraph 2 of article 5k. Alternatively to termination, contracts can be suspended, as explained in reply to question 28.
5. What contracts do the sanctions prohibit?
Last update: 12 May 2022
The sanctions prohibit contracts with:
• Russian nationals, companies, entities or bodies established in Russia as well as companies and entities directly or indirectly owned for more than 50% by them and persons bidding or implementing a contract on their behalf
• any person, regardless of their place of establishment or nationality, who implements or intends to implement a contract using Russian or Russian owned subcontractors, suppliers or capacity providers for participation above 10% of the contract value See points (a)-(c) of article 5k(1) of the Sanctions Regulation for the exact formulation.
6. What procurement excluded from the Directives is covered by the sanctions?
Last update: 2 June 2022
Additionally to the scope of the Directives, the sanctions cover also procurement concerning:
• concessions awarded to public buyers on the basis of exclusive right(s)
• concessions to holders of exclusive rights
• concessions for air and passenger transport
• concessions implemented outside the EU
• water concessions
• concessions awarded to affiliated undertakings and joint ventures
• concessions related to real estate transactions
• radio and audio-visual production and broadcasting, electronic communication services
• arbitration, conciliation and legal services
• financial instruments, loans and some central banks services
• some civil protection services provided by NGOs
• political campaigns
• lotteries
• passenger transport services
• purchases connected with classified information due the country’s essential national security interest, contracts for intelligence activities
• purchases for resale by entities active in the sectors of water, energy, transport and postal services
• contracts awarded to affiliated undertakings and joint ventures by entities active in the sectors of water, energy, transport and postal services
• posts' financial, philatelist, logistic services and services by electronic means,
• government to government defence and security contracts and concessions
• defence and security contracts and concessions related with cooperative programmes
• defence contracts and concessions for military force deployed outside of the EU
• defence and security research and development contracts for the contracting authority
See the listing of the Directives’ exclusion articles in article 5k(1) of the Sanctions Regulation for the exact formulation.
7. What procurement is not covered by the sanctions?
Last update: 12 May 2022
Public procurement not covered by the sanctions is:
• procurement not covered by the Directives and not specifically included in the sanctions
(see for an illustrative list of specifically included procurement the question above)
• all procurement below the Directives’ thresholds
Additionally, the competent national authority may authorise the award and continued execution of contracts related to:
• the continuation of nuclear energy projects, radioisotopes precursors for medical application, radiation monitoring and civil nuclear cooperation
• intergovernmental cooperation in space programmes
• strictly necessary goods and services which cannot be purchased in sufficient quantity elsewhere
• the functioning of diplomatic representations
• natural gas and oil, including refined petroleum products, as well as titanium, aluminium, copper, nickel, palladium, iron ore and coal until 10 August 2022
See article 5k(1) and (2) of the Sanctions Regulation for the exact formulation.
8. What is the general logic of the public procurement sanctions?
Last update: 12 May 2022
Overall, the logic of the public procurement sanctions is:
9. Do the public procurement sanctions cover particular sectors?
Last update: 12 May 2022
No, as a principle the sanctions cover all sectors covered by the Directives and additional areas as specified in question 5. Other specific areas excluded from the EU public procurement legislation are also not covered by the sanctions.
10. Which public buyers are concerned by the sanctions?
Last update: 12 May 2022
All EU Member States public buyers are bound by the sanctions.
11. What should they do concerning ongoing contracts? and new contracts?
Last update: 26 January 2024
Ongoing contracts covered by the sanctions cannot be further implemented. Thus, they have to be terminated. In this regard:
• All public buyers should verify whether they have concluded any public contract above the EU public procurement thresholds.
• For these contracts public buyers should:
o consider the possibility of Russian involvement in the sense of Article 5k(1) o check if the scope of contracts with Russian involvement is in principle covered by the sanctions (probably they are)
• In order to ensure that there is no Russian involvement in the contract, the public buyer may request a statement by the contractor along the following lines:
I declare under honour that there is no Russian involvement in the contract of the company I represent exceeding the limits set in Article 5k of Council Regulation (EU) No 833/2014 of 31 July 2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.
In particular I declare that:
(a) the contractor I represent (and none of the companies which are members of our consortium) is not a Russian national, or a natural or legal person, entity or body established in Russia;
(b) the contractor I represent (and none of the companies which are members of our consortium) is not a legal person, entity or body whose proprietary rights are directly or indirectly owned for more than 50 % by an entity referred to in point (a) of this paragraph;
(c) neither I nor the company represent is a natural or legal person, entity or body act on behalf or at the direction of an entity referred to in point (a) or (b) above,
(d) there is no participation of over 10 % of the contract value of subcontractors, suppliers or entities whose capacities the contractor I represent relies on by entities listed in points (a) to (c).
• Given the individual financial sanctions also in place, the public buyer may add to the above statement by the contractor the following lines:
(e) the contractor I represent (and the companies which are members of our consortium or any of their subcontractors) is not a target of EU sanctions, such as those against the persons listed in Annex I to Council Regulation (EU) No 269/2014 , nor is owned or controlled by listed persons. The criterion to be taken into account when assessing whether a legal person or entity is owned by another person or entity is the possession of more than 50% of the proprietary rights of an entity or having majority interest in it .
• In case of any doubts, public buyers should request additional information, explanation or documents or conduct additional verifications to ensure the veracity of the statement and information provided by the contractor, such as by checking for adverse (negative) media coverage, and investigating corporate structures e.g. via beneficial ownership registers.
12. What should public buyers do in regard of future contracts?
Last update: 12 May 2022
All public buyers are strongly advised to request a declaration as above with the tender documentation. They may find it appropriate to ask tenderers for detailed information or documentation on their final beneficial ownership (all consortium members in case of consortia) and possibly, also subcontractors, suppliers and entities relied on.
The above information may also be requested at a later stage, respecting the principle of equal treatment of tenderers and giving them a reasonable time for reaction.
Public buyers may request additional information in case of reasonable doubts concerning the information received.
13. If a contract is terminated due to these sanctions, can a new one be awarded on the basis of a negotiated procedure without publication?
Last update: 12 May 2022
Ongoing contracts can in principle be still implemented until 10 October 2022. Thus contracting authorities should be able to award a new contract to replace the old one until then, if needed. There could be specific situations, e.g. in case of contracts requiring a particularly long preparation and tendering procedure, where this is not possible.
Every contract award on the basis of a negotiated procedure without prior publication of a contract notice needs to be justified on an individual basis. Termination of a contract due to the sanctions can be considered an unforeseeable event. It should, however, be analysed whether a new contact is necessary and whether its conclusion is extremely urgent. In view of the transition period for terminating contracts, this cannot be presumed. The award of a new contract within the transition period should in general be possible, either by using a normal, or an accelerated procedure.
For details on emergency procedures the Commission’s Communications on procurement in Covid-19 crisis situation and the asylum crisis situation can be consulted.
14. What if a public buyer signed a prohibited contract after the date of application of the sanctions?
Last update: 12 May 2022
Although such a contract should not have been concluded in the first place, it is valid until terminated or declared invalid by a court decision. Thus, when mistakenly concluded, it should be terminated as soon as possible.
Is shall be noted that formally this constitutes a violation of the Sanctions Regulation and should be subject to prosecution and penalties.
15. Can a public buyer still purchase Russian energy or gas?
Last update: 12 May 2022
Yes, it is still possible to purchase it from Russia, although in some cases it may require an authorisation by the competent national authorities.
Purchases of energy and fuel for production of energy by entities providing gas, heat and electricity to the public are not covered by the sanctions (exceptions from the Directive 2014/25/EU, in its article 23(b), not included in the sanctions Regulation).
Purchase of gas is also in general exempted (Article 5k(2) lit. e), upon authorisation. As explained in the reply to question 9, all public buyers should analyse if their contracts are subjected to sanctions. Thus, if a public buyer purchasing gas for itself discovers or learns from its contractor that it comes from Russian entities (including subcontractors or suppliers), it must seek an authorisation by the competent national authority to maintain the conditions of the current contract beyond 10 October 2022 (listed in Annex I to the Regulation 833/2014).
16. Does the 10% Russian subcontracting, supplying or capacity provision limit apply individually or cumulatively?
Last update: 12 May 2022
It applies individually to each subcontractor, supplier or capacity provider. Where more than one covered entity is involved, the value of their participation has to reach 10 % in at least one case for sanctions to apply.
17. Does the 10% Russian subcontracting and supplying limit apply only to the first step or also further in the supply chain?
Last update: 12 May 2022
The terms “subcontractors” and “suppliers” include the whole supply chain and not only direct suppliers. Thus, contracts are covered even if the 10% of Russian subcontracting or supplying is provided through intermediary entities.
18. How does the 10% Russian subcontracting and supplying limit apply if the subcontractor or supplier is only partially owned by an entity covered by the sanctions?
Last update: 12 May 2022
If a subcontractor which accounts for over 10% of the contract value is owned for more than 50% by a Russian entity or national, it is a covered subcontractor.
19. Does subcontractors, suppliers or entities whose capacities are being relied on mean only those that the buyer knows about?
Last update: 12 May 2022
No, it means any third parties involved for more than 10% of the contract value.
20. Who is meant by subcontractors, suppliers or entities whose capacities are being relied on? What if these entities ultimately do not implement a contract at all?
Last update: 12 May 2022
These notions cover all entities that perform a part of the contract, i.e. provide services or works or deliver any kind of supply. They cover also any entity indicated in the tender offer, even if it finally does not implement any part of the contract in practice and its capacity is merely relied on for the purpose of fulfilling the selection criteria.
21. Can subcontractors, suppliers or capacity providers be replaced?
Last update: 12 May 2022
Yes, the public buyer receiving a tender or having a contract involving sanctioned Russian participation should in accordance with the principle of non-discrimination and equal treatment require from the tenderer or contractor its replacement in line with article 63(2) and 71(6)(b)
Directive 2014/24/EU, articles 79(1)-(2) and 88(6)(b) Directive 2014/25/EU, article 42(4)(b) Directive 2014/23/EU and by analogy should offer the possibility of its replacement in case of Directive 2009/81/EC. A replacement proposed by a tenderer or contractor should be accepted if a proposed new subcontractor, supplier or capacity provider is not in an exclusion situation (including the current sanctions) and after the replacement the selection criteria remain fulfilled by the tenderer or contractor.
In case a replacement was not proposed by the contractor or tenderer, or where the replacement proposed was not acceptable, with account being taken also of the principles of nondiscrimination and equal treatment, a tender should be rejected or a contract terminated.
22. Can a consortium member be replaced?
Last update: 12 May 2022
No, all the members of a consortium, a group of natural or legal persons or public entities, when they jointly submit an offer having joint and several responsibility for contract implementation, constitute together one economic operator and therefore they cannot be replaced.
23. Does the Russian ownership concern only the immediate owner or up to the ultimate beneficial owner?
Last update: 12 May 2022
The sanctions exclude any Russian ownership over 50%, up to the ultimate beneficial owner. If the Russian participation is partial, a proportion should be calculated and summarised as needed, even if the partial ownership comes from different ownership levels.
Thus, if a tenderer is owned by 30% by a Russian citizen and 70% by an EU company, which is owned by 40% by a Russian entity, the tenderer is owned for 58% by covered entities and should be excluded.
24. How is the owner’s nationality proportion established in the case of companies listed on the stock market?
Last update: 12 May 2022
Any company involved in a public procurement procedure or contract, whether listed on a stock market or not, is obliged to provide detailed information on their owners, to the extent necessary to establish that it is not Russian owned over the forbidden limit.
25. Is requesting the information about ownership in line with the rules on the protection of personal data?
Last update: 12 May 2022
Information on ownership is necessary to implement the Sanctions Regulations. Therefore, public buyers are authorised to request it by Article 6 of the GDPR. Nevertheless, all the rules on the protection of personal data (GDPR) still apply. Thus, the information shall be protected, not shared beyond the purpose for which it was obtained, and destroyed when it is not needed.
26. Can excluded tenderers claim violation of the principle of transparency?
Last update: 12 May 2022
No. The Sanctions Regulation is directly and immediately applicable from its entry into force and the fact that this exclusion was not listed in the procurement documents, or that it is not contained in the applicable Public Procurement Directive, is irrelevant.
27. Can contracts subject to sanctions still be awarded if their execution finishes before 10 October 2022?
Last update: 12 May 2022
No. Contracts covered by the sanctions cannot be awarded, even if the contract execution would finish before 10 October 2022.
28. Can a contract just be suspended and not terminated?
Last update: 12 May 2022
The Sanctions Regulation prohibits the execution of the contract. Therefore, a contract can be terminated or suspended indefinitely and unconditionally, in accordance with national law.
29. Shall the sanctioned companies be excluded from Dynamic Purchasing Systems list?
Last update: 12 May 2022
Since a Dynamic Purchasing System is not a contract, the participation of covered entities in the list should be considered as frozen and no invitations should be sent to them.
30. What does acting on behalf of or at the direction of covered entities mean?
Last update: 12 May 2022
This is an issue of factual assessment which needs to be made by the buyer. The Commission has provided guidance on how to assess this in its Commission opinion of 17 October 2019:
https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/docum ents/191017-opinion-regulation-2014-833-article-5-1_en.pdf
“In the absence of a definition and/or criteria that can be used to assess whether an entity acted on behalf or at the direction of a targeted entity, the NCA should take into account all the relevant circumstances in order to establish the situation at hand. These can include, for example, the precise ownership/control structure, including links between natural persons; the nature and purpose of the transaction, coupled with the stated business duties of the entity that is owned or controlled; previous instances of acting on behalf or at the direction of the targeted entity; disclosure made by third parties and/or factual evidence indicating that directions were given by the targeted entity.”
31. How is the 50% ownership calculated in the case of consortia?
Last update: 12 May 2022
The limit is calculated individually. It applies to each consortium member. None of them can be Russian owned for over 50%.
32. Do the sanctions prohibit contracts with a Russian company or a Russian owner that itself is owned by a non-Russian company or individual?
Last update: 12 May 2022
The prohibition applies in respect of all companies established in Russia, independently of their ownership, as well as to companies that are directly or indirectly owned by a Russian national or company established in Russia for more than 50 %. This is regardless of whether these companies are owned by a company that is not established in Russia or in ownership of a Russian company or national.
Whether or not a Russian company is owned by a non-Russian company or individual is thus not relevant.
33. Are the contracts below the EU public procurement thresholds covered by the sanctions?
Last update: 12 May 2022
No, contracts below the EU public procurement thresholds are not covered by the sanctions. However, a contract shall not be artificially split into parts. In case a contract is artificially split with the aim of avoiding the threshold, it is to be considered as one contract and as such covered by the sanctions.
34. Are the decisions related to sanctions subject to review like other public procurement decisions?
Last update: 12 May 2022
Yes, the decisions of public buyers related to the Sanctions Regulation are subject to review as any other decision taken in regard of contracts falling within the scope of Directives 2014/23/EU, 2014/24/EU, 2014/25/EU and 2009/81/EC. Thus, a tenderer having or having had an interest in obtaining a particular contract and who has been harmed or risks being harmed by a decision of the public buyer allegedly contrary to the Sanctions Regulation, may lodge a complaint before the first instance public procurement review body.
The decisions on termination of an ongoing public contract based on the Sanctions Regulation are subject to review based on the national law, as any other aspect of implementation of the public contracts. At the same time, no damages can be claimed for their termination as per Article 11 of the Sanctions Regulation.
35. Can public buyers be held accountable for terminating ongoing contracts with sanctioned parties? What is the legal basis for excluding claims for damages?
Last update: 12 May 2022
Claims for damages are excluded by Article 11 of the Sanctions Regulation (“no claim clause”). According to this clause, Russian parties and those acting on their behalf cannot obtain compensation for damages resulting from the latter complying with the obligations under the Sanctions Regulation.
36. Is a company established in Germany with a managing director of Russian nationality and German residence excluded from the award or the fulfilment of public contracts if the threshold value is reached?
Last update: 23 May 2022
No, it is not excluded on the basis of the Sanctions Regulation since the contract is signed with the company which is established in Germany and not with its managing director.
37. How do provisions under Article 5k apply to a person with a dual nationality – Russian and another?
Last update: 26 August 2022
Article 5k applies to Russian citizens and does not provide for exceptions for dual citizenship. Thus, having Russian nationality is decisive and any other citizenship irrelevant.
38. When shall a declaration of no Russian involvement be considered sufficient and when shall additional information be requested?
Last update: 26 August 2022
This is an issue of individual assessment of the contracting authority of each particular contract and tenderer, taking into account the size and importance of the contract, the nature of the contract and its particular market, the geographical location of the contract implementation, particular observations connected with the tenderer and its offer, and general information known to the buyer.
In any case, the information on Russian involvement should be requested on the whole ownership chain (up to the final beneficial owner) only where necessary. This would not be the case where it can be excluded that there is any individual indirect Russian participation above 10% of the contract value down the supply chain (all subcontractors and suppliers and their subcontractors and suppliers).
39. Can a competent national authority give a general authorisation for certain types of contracts?
Last update: 26 August 2022
The Sanctions Regulation empowers the competent national authorities to provide authorisations in certain cases provided for in Article 5k(2), and does not regulate the procedure or mechanism for granting those authorisations. Competent national authorities are therefore entitled to decide that the award of certain groups or types of contracts is authorised. Such a block authorisation may have the effect of releasing buyers from the need of analysing or checking situations within specific contracts, provided that they respect the conditions of those authorisations.
40. Can a competent national authority authorise the execution of already awarded contracts?
Last update: 26 August 2022
The authorisation of authorities by Article 5k(2) referred to under the preceding question covers both award of contracts and the continued execution thereof.
41. When shall a public buyer apply for authorisation?
Last update: 26 August 2022
Formally, there is no deadline for application. However, the authorisation should be requested as soon as possible to ensure that it is obtained on time before the award of a new contract or to have enough time for a new award procedure in case the authorisation is refused by the competent national authority.
42. Can contracts be terminated before 10 October 2022?
Last update: 26 August 2022
The Sanctions Regulation prohibits to execute contracts only from 10 October 2022. Thus, the Sanctions Regulation is not a legal basis to terminate them before.
In practice, the majority of contracts cannot be terminated from one day to the next. Therefore, the termination procedure should start sufficiently early to ensure that contracts are not executed beyond 10 October 2022.
While the Sanctions Regulation is a legal basis for termination of contracts, the procedure is subject to national law.
43. Do the sanctions apply to Russian nationals who have obtained refugee status (considering inter alia the Refugee Convention of 1951)?
Last update: 26 August 2022
Article 8 of the Refugee Convention of 1951 states that exceptional measures which may be taken against the person, property or interests of nationals of a foreign State, shall not be applicable to a refugee who is formally a national of the said State, solely on account of such nationality.
Article 18 of the Charter of Fundamental Rights of the EU provides that ‘the right to asylum shall be guaranteed with due respect for the rules of the Geneva Convention of 28 July 1951 and the Protocol of 31 January 1967 relating to the status of refugees…’.
Therefore, in line with those provisions, Russian nationals having obtained refugee status in any of the EU Member States are not covered by the provisions of Article 5k of the Sanctions Regulation.
44. Do sanctions apply to supplies purchased earlier, be it stocked, multiple times resold or used?
Last update: 26 August 2022
Sanctions apply to the conclusion of public contracts after 9 April 2022 and to the execution of prior contracts as from 10 October 2022.
The sanctions do not apply to the subject-matter of the offer or contract (supplies), but to the Russian or Russian owned entities (contractor, subcontractor, supplier or capacity providers) involved in the implementation of the contract (for participation above 10% of the contract value) after 9 April 2022 for newly concluded contracts or as from 10 October 2022 for prior contracts.
Therefore, sanctions are not applicable in the case where the contractor, subcontractor, supplier or capacity providers involved in the implementation of the contract has before the submission of the offer or contract award and before 9 April 2022 purchased supplies (over 10 percent of the contract value) from a Russian or Russian-owned entity.
45. Shall subcontracting be checked all the way down the supply chain to ensure that there is no Russian involvement?
Last update: 26 August 2022
Russian involvement should be checked as long as there is a possibility of a subcontractor or supplier whose involvement exceeds 10% of the contract value, even far down the supply chain, e.g. energy or raw materials.
46. Do the sanctions cover lots worth less than 80.000€ (or 1 million € in case of works) and constituting less than 20% of the value of the procurement they are part of?
Last update: 26 August 2022
Yes, they do. Article 5(10) of Directive 2014/24/EU allows to award such contracts without following the competitive procedure but that does not exclude them from the scope of the Directive. Therefore, being covered by the Directive, they are also covered by the Sanctions Regulation.
47. If an EU company has a permanent branch in Russia, is that EU company’s branch covered by the Sanctions Regulation?
Last update: 26 August 2022
This depends on whether the branch fulfils the conditions or Art. 5 k (1). This has to be assessed case-by-case.
48. What is the relationship between Article 5k and Article 5aa?
Last update: 26 August 2022
Article 5aa refers mainly to entities owned by the Russian State but forbids transactions with them in general, not only within public procurement. Article 5k covers transactions by EU public entities with all Russian entities, including natural persons, in the context of public procurement. The two provisions thus have a different scope, which may overlap in individual cases.
49. What is the relationship between Article 5k of Council Regulation (EU) 833/2014 and Article 2 of Council Regulation 269/2014?
Last update: 26 January 2024
Both provisions must be complied with, hence their applicability must be checked in parallel. It suffices that one of both provisions applies for an action to be prohibited.
7. HUMANITARIAN AID
RELATED PROVISION: COUNCIL REGULATION 833/2014
1. Are humanitarian activities exempted from the sanctions? Can for instance food, medicines and medical devices be provided on this basis?
Last update: 7 February 2023
EU sanctions are targeted. They are aimed at those responsible for the policies or actions the EU wants to influence. This targeting intends to reduce as much as possible any adverse humanitarian effects or unintended consequences for persons that are not targeted by these measures, in particular the civilian population, or neighbouring countries. Any action not explicitly prohibited under EU sanctions is permitted. Humanitarian operators can seek guidance from their national competent authority (NCA).
Council Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine provides for the following specific exceptions for humanitarian purposes:
- Export restrictions applicable to items covered by Annex I to the EU Dual-Use Regulation and to ‘Advanced technology’ items do not apply if intended for humanitarian needs, health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment or as a response to natural disasters; nor for medical or pharmaceutical purposes. For further details, including notification obligations please refer to the Frequently Asked Questions on export-related restrictions pursuant to Articles 2, 2a and 2b of Council Regulation No 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine.
- Export restrictions applicable to items covered by Annex XXIII may be lifted following a derogation granted by the relevant national competent authority, after having determined that such items are necessary for humanitarian purposes. Please refer here to Article 3k of Council Regulation (EU) No 833/2014.
- The prohibition to provide public financing or financial assistance for trade with, or investment in, Russia do not apply for trade in food, and for agricultural, medical or humanitarian purposes. Please refer here to Article 2e of Council Regulation (EU) No 833/2014.
- The ban on the overflight of EU airspace and on access to EU airports by Russian carriers of all kinds may be lifted on humanitarian grounds, following a derogation granted by the relevant national competent authority. Please refer here to Article 3d of Council Regulation (EU) No 833/2014.
- The export restrictions applicable to maritime navigation goods and radio communication technology do not apply if intended for humanitarian purposes, health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters. Please refer here to Article 3f of Council Regulation (EU) No 833/2014. - The restrictions on the acceptance of deposits can be subject to exemptions following an authorisation by the NCA if necessary for humanitarian purposes, such as delivering or facilitating the delivery of assistance, including medical supplies, food, or the transfer of humanitarian workers and related assistance, or for evacuations. Please refer here to Article 5d of Council Regulation (EU) No 833/2014.
- The ban on access to EU ports by Russian vessels can be subject to a derogation following an authorisation by the NCA if the access is necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products or required for humanitarian purposes. Please refer here to Article 3ea of Council Regulation (EU) No 833/2014.
- The prohibition for Russian transport undertaking to transport goods by road within the territory of the Union can be subject to a derogation following an authorisation by the NCA if the transport is necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, or humanitarian purposes. Please refer here to Article 3l of Council Regulation (EU) No 833/2014.
- The prohibition on the registration or the provision of a registered office, business or administrative address as well as management services to trusts or similar legal arrangements may also be lifted following a derogation granted by the relevant national competent authority, after having determined that the services are necessary for humanitarian purposes. Please refer here to Article 5m of Council Regulation (EU) No 833/2014.
Council Regulation (EU) 2022/625 of 13 April 2022 amending Council Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine provides for exemptions, for certain clearly defined categories of organisations and agencies, and derogations, concerning the freezing of assets of, and the restrictions on making funds and economic resources available to, designated persons, entities and bodies, when those actions are necessary for exclusively humanitarian purposes in Ukraine. Please refer here to Article 2a of Council Regulation (EU) No 269/2014.
Council Regulation (EU) 2022/263 of 23 February 2022 concerning restrictive measures in response to the illegal recognition, occupation or annexation by the Russian Federation of certain non-government controlled areas of Ukraine provides for exemptions, for certain clearly defined categories of bodies, persons, entities, organisations and agencies, and derogations to allow the provision of goods and technology indicted in Annex II, as well as certain restricted services and assistance related to such goods and technology, to persons, entities and bodies in the nongovernment controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts of Ukraine or for use in those areas, where necessary for humanitarian purposes. Similarly, the exemption and derogation allow for the provision of specific restricted services and assistance directly relating to certain infrastructure in the non-government-controlled areas of the Donetsk, Kherson, Luhansk and Zaporizhzhia oblasts of Ukraine, where necessary for humanitarian purposes. Please refer here to Article 4a and Article 5a of Council Regulation (EU) 2022/263. The legal act was amended by Council Regulation (EU) 2022/626 of 13 April 2022 and Council Regulation (EU) 2022/1903 of 6 October 2022, notably to also cover the non-government controlled areas of Kherson and Zaporizhzhia oblasts of Ukraine.
For further guidance on how to provide humanitarian aid in compliance with EU sanctions, please refer to the Commission Guidance note on the provision of humanitarian aid to fight the COVID-19 pandemic in certain environments subject to EU restrictive measures. Some of the principles captured in this Guidance Note, which covers EU sanctions vis-à-vis counter terrorism, Iran, Nicaragua, Syria and Venezuela, may apply by analogy to the above sanctions regimes, insofar as they concern horizontal aspects (e.g. application of Internal humanitarian law and non-vetting of final beneficiaries). Moreover, in 2021 the Commission has set up a sanctions-humanitarian contact point, that NGO and economic operators can address to request tailor-made support. The contact point can be reached at: EC-SANCTIONS- HUMANITARIAN-CONTACT-POINT@ec.europa.eu.
8. PROVISION OF SERVICES
RELATED PROVISION: ARTICLE 5n OF COUNCIL REGULATION 833/2014
1. The EU has prohibited the provision of certain business-relevant services to the Russian government, as well as to legal persons such as companies and other entities or bodies established in Russia. What kind of services are prohibited?
Last update: 30 June 2022
As of 4 June 2022, it is prohibited to provide, directly or indirectly, accounting, auditing, including statutory audit, bookkeeping and tax consulting services, as well as business and management consulting or public relations services (Article 5n of Council Regulation 833/2014) to the Russian government, as well as to legal persons such as companies and other entities or bodies established in Russia.
The scope of the services prohibited should be interpreted with reference to Annex II to Regulation (EC) No 184/2005 of the European Parliament and of the Council of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment60.
- Accounting, auditing, bookkeeping and tax consultancy services cover the recording of commercial transactions for businesses and others; examination services of accounting records and financial statements; business tax planning and consulting; and the preparation of tax documents.
- Business and management consulting and public relations services cover advisory, guidance and operational assistance services provided to businesses for business policy and strategy and the overall planning, structuring and control of an organisation. Management fees, management auditing; market management, human resources, production management and project management consulting; and advisory, guidance and operational services related to improving the image of the clients and their relations with the general public and other institutions are all included.
The provision in Article 5n has been amended since its introduction in June 2022. Please find in Annex A an outline of the applicable prohibitions on the provision of services, as well as of the relevant wind-down periods, exemptions and derogations.
2. Do public relations services falling under the prohibition of Article 5n (1) also include lobbying activities?
Last update: 26 October 2022
60 See Recital (26) of Council Regulation 2022/879 of 3 June 2022, amending Council Regulation 833/2014.
Yes, lobbying services could constitute public relations services and therefore fall under the prohibition laid down in Article 5n.
As stated in Article 3 of the interinstitutional agreement of 20 May 2021 on a mandatory transparency register, the activities covered by lobbying services include, inter alia:
• organising or participating in meetings, conferences and events, and engaging in any similar contacts with EU institutions;
• contributing to, or participating in, consultations, hearings or similar initiatives;
• organising communication campaigns, platforms, networks and grassroots initiatives; and
• preparing or commissioning policy and position papers, amendments, opinion polls, surveys, open letters, other communication or information material, or commissioning and carrying out research. However,
• activities by employers and trade unions acting as participants in social dialogue;
• activities carried out by individuals acting in a strictly personal capacity and not in association with others; and
• spontaneous, purely private or social meetings and meetings taking place in the context of an administrative procedure established by the treaties or legal acts of the EU are not covered by the definition of lobbying activities and therefore fall outside the scope of Article 5n (1).
3. What do the terms “strictly” and “exclusive” refer to in the exceptions contained in Articles 5n (4b), (5), (6) and (7)?
Last update: 2 April 2024
These terms are used to make sure that the exceptions contained in Articles 5n (4b), (5), (6) and (7) are correctly interpreted by EU operators when assessing whether they can rely on these provisions. These exceptions are to be interpreted restrictively. The term strictly means that there is no other way to terminate contracts or to exercise the right of defense other than to rely on the provision of these otherwise prohibited services.
Article 12 prohibits conscious and intentional participation in activities the object or effect of which is to circumvent the prohibitions in the Regulation.
4. Does the prohibition on providing services “indirectly” in Article 5n prohibit an EU services provider from providing restricted services to subsidiaries of an entity established in Russia?
Last update: 30 June 2023
No. It is not prohibited to provide services to non-Russian entities, i.e. entities not established in Russia, even if they are subsidiaries of entities established in Russia.
The use of the term “indirectly” in Article 5n means that it is prohibited for an EU services provider to provide restricted services to EU or other non-Russian entities that are subsidiaries of entities established in Russia if those services would actually be for the benefit of the parent company established in Russia.
Article 12 prohibits knowing and intentional participation in activities the object or effect of which is to circumvent prohibitions in the Regulation.
5. Does the prohibition on providing services “indirectly” in Article 5n prohibit an EU services provider from providing outsourced restricted services to Russian legal entities?
Last update: 30 June 2023
Yes. EU entities cannot provide services to entities established in Russia, so they cannot use outsourced services to provide prohibited services as this indeed could be considered an indirect provision of these services.
Article 12 prohibits EU entities to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation.
6. Does the prohibition on providing services in Article 5n (1), (2), (2a) and (2b) prohibit entities established in the EU which are subsidiaries of Russian companies from providing prohibited services to their mother companies established in Russia?
Last update: 2 April 2024
Yes. Entities established in the EU, including those that are subsidiaries of companies established in Russia, are bound by EU sanctions. Hence, they are prohibited from providing, directly or indirectly, any of the listed services (accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services, architectural and engineering services, legal consultancy services, IT consultancy services, market research and public opinion polling services, technical testing and analysis services and advertising services, software for the management of enterprises and software for industrial design and manufacture) to the Government of Russia or persons established in Russia.
7. Does the prohibition on providing services prohibit nationals of EU Member States or persons located in the EU from working as employees of entities established in Russia?
Last update: 2 April 2024
Not necessarily, it depends on the service provided. Under Article 5n, EU persons, including nationals of EU Member States or persons located in the Union, are prohibited from providing, directly or indirectly, any of the listed services (accounting, auditing, including statutory audit, bookkeeping or tax consulting services, or business and management consulting or public relations services, architectural and engineering services, legal consultancy services, IT consultancy services, market research and public opinion polling services, technical testing and analysis services and advertising services, software for the management of enterprises and software for industrial design and manufacture) to the Government of Russia or persons established in Russia. Hence, EU persons are prohibited from providing these services to companies established in Russia in their capacity as employees.
However, EU persons can still provide all services that are not prohibited in their capacity as employees.
8. How is the sectoral scope for ‘IT consultancy services’ defined in relation to Art 5n (2) of Council Regulation 833/2014?
Last update: 24 October 2022
IT consultancy services are defined by reference to the United Nations’ Central Products Classification “CPC” (Statistical Office of the United Nations, Statistical Papers, Series M, No 77, CPC prov., 1991).
According to this definition, 'IT consultancy services' include:
− Consultancy services related to the installation of computer hardware: assistance services to the clients in the installation of computer hardware (i.e. physical equipment) and computer networks.
− ‘Software implementation services’: all services involving consultancy services on, development and implementation of software. The term "software" may be defined as the
sets of instructions required to make computers work and communicate. A number of different programmes may be developed for specific applications (application software), and the customer may have a choice of using ready-made programmes off the shelf (packaged software), developing specific programmes for particular requirements (customized software) or using a combination of the two. The following sub-sectors are included:
− Systems and software consulting services: services of a general nature prior to the development of data processing systems and applications. It might be management services, project planning services, etc.
− Systems analysis services: analysis services include analysis of the clients' needs, defining functional specification, and setting up the team. Also involved are project management, technical coordination and integration and definition of the systems architecture.
− Systems design services: design services include technical solutions, with respect to methodology, quality-assurance, choice of equipment software packages or new technologies, etc.
− Programming services: programming services include the implementation phase, i.e.
writing and debugging programmes, conducting tests, and editing documentation.
− Systems maintenance services: maintenance services include consulting and technical assistance services of software products in use, rewriting or changing existing programmes or systems, and maintaining up-to-date software documentation and manuals. Also included are specialist work, e.g. conversions.
9. Can these measures not further hamper the already challenging working conditions of civil society organisation in Russia?
Last update: 21 December 2022
The ban on IT consultancy services is subject to the exemptions and derogations specified in Article 5n of Council Regulation (EU) No 833/2014, which aims to protect the work of the civil society. The derogations provided for include, inter alia, the supply of IT consultancy services to civil society activities that directly promote democracy, human rights or the rule of law in Russia.
10. What activities are covered under the prohibition on ‘architectural and engineering services’ in Art. 5n (2) of Council Regulation 833/2014?
Last update: 24 October 2022
‘Architectural and engineering services’ are defined by reference to the United Nations’ Central Products Classification “CPC” (Statistical Office of the United Nations, Statistical Papers, Series M, No 77, CPC prov., 1991). According to this definition, the covered sub-sectors are: ‘Architectural services’, ‘Engineering services’, ‘Integrated engineering services’, ‘Urban planning and landscape architectural services’ and ‘Related scientific and technical consulting services’.
‘Architectural services' include:
− Advisory and pre-design architectural services: assistance, advisory and recommendation services concerning architectural and related matters. Included here are services as undertaking preliminary studies addressing issues such as site philosophy, intent of development, climatic and environmental concerns, occupancy requirements, cost constraints, site selection analysis, design and construction scheduling and any other issues affecting the nature of the design and construction of a project. The provision of these services is not necessarily related to a new construction project. For example, it may consist of advice concerning the means of carrying out maintenance, renovation, restoration or recycling of buildings, or appraisals of the value and quality of buildings or of advice on any other architectural matter.
− Architectural design services: architectural design services for buildings and other structures. Design services may consist of one or a combination of the following: schematic design services, which consist of determining, with the client, the essential character of the project, defining intent, space requirements, budget limitations and time scheduling; and of preparing sketches including floor plans, site plans and exterior views; design development services, which consist of a more precise illustration of the design concept in terms of siting plan, form, material to be used, structural, mechanical and electrical systems and probable construction costs; final design services, which consist of drawings and written specifications sufficiently detailed for tender submission and construction, and of expert advice to the client at the time of calling for and accepting tenders.
− Contract administration services: advisory and technical assistance services to the client during the construction phase to ensure that the structure is being erected in conformity with the final drawings and specifications. This involves services provided both in offices and the field, such as construction inspection, preparation of progress reports, issuance of certificates for payments to the contractor, guidance to the client and the contractor in the interpretation of contract documents and any other advice on technical questions that may develop during construction.
− Combined architectural design and contract administration services: combinations of architectural services utilized on most projects including schematic design, design development, final design and contract administration services. This may include post construction services which consist of the assessment of deficiencies in construction and instructions regarding corrective measures to be taken during the 12-month period following the completion of the construction.
− Other architectural services: all other services requiring the expertise of architects, such as the preparation of promotional material and presentations, preparation of as-built drawings, constant site representation during the construction phase, provision of operating manuals, etc.
‘Engineering services’ include:
− Advisory and consultative engineering services: assistance, advisory and recommendation services concerning engineering matters. Included here are the undertaking of preparatory technical feasibility studies and project impact studies. Examples are: study of the impact of topography and geology on the design, construction and cost of a road, pipeline or other transportation infrastructure; study of the quality or suitability of materials intended for use in a construction project and the impact on design, construction and cost of using different materials; study of the environmental impact of a project; study of the efficiency gains in production as a result of alternative process, technology or plant layout. The provision of these services is not necessarily related to a construction project. It may consist, for example, of the appraisal of the structural, mechanical and electrical installations of buildings, of expert testimony in litigation cases, of assistance to government bodies in drafting laws, etc.
− Engineering design services for the construction of foundations and building structures: structural engineering design services for the load-bearing framework of residential and commercial, industrial and institutional buildings. Design services consist of one or a combination of the following: preliminary plans, specifications and cost estimates to define the engineering design concept; final plans, specifications and cost estimates, including working drawings, specifications regarding materials to be used, method of installation, time limitations and other specifications necessary for tender submission and construction and expert advice to the client at the time of calling for and accepting tenders; services during the construction phase. Exclusion: Engineering services for buildings if they are an integral part of the engineering design service for a civil work or production plant or facility.
− Engineering design services for mechanical and electrical installations for buildings: mechanical and electrical engineering design services for the power system, lighting system, fire alarm system, communication system and other electrical installations for all types of buildings and/or the heating, ventilating, air conditioning, refrigeration and other mechanical installations for all types of buildings. Design services consist of one or a combination of the following: preliminary plans, specifications and cost estimates to define the engineering design concept; final plans, specifications and cost estimates, including working drawings, specifications regarding materials to be used, method of installation, time limitations and other specifications necessary for tender submission and construction and expert advice to the client at the time of calling for and accepting tenders; services during the construction phase.
− Engineering design services for the construction of civil engineering works: engineering design services for the construction of civil engineering works, such as bridges and viaducts, dams, catchment basins, retaining walls, irrigation systems, flood control works, tunnels, highways and streets including interchanges and related works, locks, canals, wharves and harbours works, water supply and sanitation works such as water distribution systems, water, sewage, industrial and solid waste treatment plants and other civil engineering projects. Design services consist of one or a combination of the following: preliminary plans, specifications and cost estimates to define the engineering design concept; final plans, specifications and cost estimates, including working drawings, specifications regarding materials to be used, method of installation, time limitations and other specifications necessary for tender submission and construction and expert advice to the client at the time of calling for and accepting tenders; services during the construction phase. Included are engineering design services for buildings if they are an integral part of the engineering design for a civil engineering work.
− Engineering design services for industrial processes and production: engineering design services for production processes, procedures and facilities. Included here are design services as they relate to methods of cutting, handling and transporting logs and logging site layout; mine development layout and underground construction, the complete civil, mechanical and electrical mine surface plant installations including hoists, compressors, pumping stations, crushers, conveyors and ore and waste-handling systems; oil and gas recovery procedures, the construction, installation and/or maintenance of drilling equipment, pumping stations, treating and storage facilities and other oil field facilities; materials flows, equipment layout, material handling systems, processes and process control (which may integrate computer technology) for manufacturing plants; special machinery, equipment and instrumentation systems; any other design services for production procedures and facilities. Design services consist of one or a combination of the following: preliminary plans, specifications and cost estimates to define the engineering design concept; final plans, specifications and cost estimates, including working drawings, specifications regarding materials to be used, method of construction and/or installation, time limitations and other specifications necessary for tender submission and construction and expert advice to the client at the time of calling for and accepting tenders; services during the installation phase. Included are engineering design services for buildings if they are an integral part of the engineering design service for a production plant or facility.
− Engineering design services n.e.c.: other specialty engineering design services. Included here are acoustical and vibration engineering designs, traffic control systems designs, prototype development and detailed designs for new products and any other specialty engineering design services. Exclusion: The aesthetic design of products and the complete design of products which do not require complex engineering (e.g. furniture) are classified in subclass 87907 (Specialty design services).
− Other engineering services during the construction and installation phase: advisory and technical assistance services to the client during construction to ensure that construction work is in conformity with the final design. This involves services provided both in
offices and in the field, such as the review of shop drawings, periodic visits to the site to assess progress and quality of the work, guiding the client and the contractor in the interpretation of contract documents and any other advice on technical questions that may develop during construction.
− Other engineering services: engineering services not elsewhere classified. Included here are geotechnical engineering services providing engineers and architects with necessary subsurface information to design various projects; groundwater engineering services including groundwater resources assessment, contamination studies and quality management; corrosion engineering services including inspection, detection and corrosion control programmes; failure investigations and other services requiring the expertise of engineers.
‘Integrated engineering services’ include:
− Integrated engineering services for transportation infrastructure turnkey projects: fully integrated engineering services for the construction of transportation infrastructure turnkey projects. Services included here are planning and pre-investment studies, preliminary and final design, cost estimation, construction scheduling, inspection and acceptance of contract work as well as technical services, such as the selection and training of personnel and the provision of operation and maintenance manuals and any other engineering services provided to the client that form part of an integrated bundle of services for a turnkey project.
− Integrated engineering and project management services for water supply and sanitation works turnkey projects: fully integrated engineering services for the construction of water supply and sanitation works turnkey projects. Services included here are planning and pre-investment studies, preliminary and final design, cost estimation, construction scheduling, inspection and acceptance of contracts as well as technical services, such as the selection and training of personnel and the provision of operation and maintenance manuals and any other engineering services provided to the client that form part of an integrated bundle of services for a turnkey project.
− Integrated engineering services for the construction of manufacturing turnkey projects: fully integrated engineering services for the construction of manufacturing facilities turnkey projects. Services included here are planning and pre-investment studies to address issues such as the integration of operations, site selection, pollution and effluent control and capital requirements; all necessary structural, mechanical and electrical
design services; production process engineering design services including detailed process flow diagrams, general site and plant arrangement drawings, plant and equipment specifications; tender specifications; construction scheduling inspection and acceptance of work as well as technical services, such as the selection and training of personnel, the provision of operations and maintenance manuals, start-up assistance and any other engineering services that form part of an integrated bundle of services for a turnkey project.
− Integrated engineering services for other turnkey projects: fully integrated engineering services for other construction works. Services included here are planning and preinvestment studies, preliminary and final design, cost estimates, construction scheduling, inspection and acceptance of contracts as well as technical services, such as the selection and training of personnel and the provision of operation and maintenance manuals and any other engineering services provided to the client that form part of an integrated bundle of services for a turnkey project.
‘Urban planning and landscape architectural services’ include:
− Urban planning services: development services of programme regarding land use, site selection, control and utilization, road systems and servicing of land with a view to creating and maintaining systematic, coordinated urban development.
− Landscape architectural services: plan and design services for the aesthetic landscaping of parks, commercial and residential land, etc. This implies preparing site plans, working
drawings, specifications and cost estimates for land development, showing ground contours, vegetation to be planted, and facilities such as walks, fences and parking areas. Also included are inspection services of the work during construction.
‘Related scientific and technical consulting services’ include:
− Geological, geophysical and other scientific prospecting services: geological, geophysical, geochemical and other scientific consulting services as they relate to the location of mineral deposits, oil and gas and groundwater by studying the properties of the earth and rock formations and structures. Included here are the services of analysing the results of subsurface surveys, the study of earth sample and core, and assistance and advice in developing and extracting mineral resources.
− Subsurface surveying services: gathering services of information on subsurface earth formations by different methods, including seismographic, gravimetric, magnetometric and other subsurface surveying methods.
− Surface surveying services: gathering services of information on the shape, position and/or boundaries of a portion of the earth's surface by different methods, including transit, photogrammetric and hydrographic surveying, for the purpose of preparing maps.
− Map - making services: map-making services consisting in the preparation and revision of maps of all kinds (e.g. road, cadastral, topographic, planimetric, hydrographic) using results of survey activities, other maps, and other information sources.
11. Which activities are covered by the prohibition of ‘legal advisory services’ according to Art 5n (2) of Council Regulation (EU) No. 833/2014? Is the guarantee of the right of defence affected?
Last update: 2 April 2024
The sanctions on ‘legal advisory services’ have been designed so as to preserve access to justice and the right of defence. ‘Legal advisory services’ include:
− the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law;
− participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties; and
− preparation, execution and verification of legal documents.
Article 5n of Council Regulation (EU) No. 833/2014 explicitly excludes from the ban the provision of services that are strictly necessary:
− for the termination by 8 January 2023 of contracts which are not compliant with this Article concluded before 7 October 2022, or of ancillary contracts necessary for the execution of such contracts [please note that this wind-down period in Art. 5n(4) has expired];
− for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy; or
− to ensure access to judicial, administrative or arbitral proceedings in a Member State, or for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of this Regulation and of Council Regulation (EU) No 269/2014.
12. What is the meaning of “entities or bodies established in Russia”? In particular, do the restrictions in Article 5n(1), (2), (2a) and (2b) apply to services provided to (a) non-Russian branches of Russian entities; (b) non-Russian related parties of Russian companies / non-Russian affiliated parties of Russian companies / nonRussian companies belonging to the same group as Russian companies; (c) nonRussian companies owned by Russian residents?
Last update: 2 April 2024
The restrictions under Article 5n(1), (2), (2a) and (2b) apply to services provided to entities or bodies established in Russia.
As a result, the prohibition:
• Applies to services provided to non-Russian branches of Russian entities, which have no legal personality and are therefore considered to be established in Russia;
• Does not apply to services provided to companies incorporated under the law of a country different from Russia, which are not established in Russia, even if they are subsidiaries of Russian companies or are owned by Russian residents, provided that the services are not for the benefit of the parent company established in Russia.
13. Are services provided to natural persons in Russia covered by the prohibitions under Article 5n(1), (2), (2a) and (2b) of Council Regulation 833/2014?
Last update: 2 April 2024
No, the prohibitions under Article 5n(1), (2), (2a) and (2b) of Council Regulation 833/2014 only cover services provided to the Russian government and to legal persons, entities or bodies established in Russia.
14. Does the prohibition apply to EU individuals providing restricted services to Russian entities?
Last update: 2 April 2024
Yes, the prohibitions in Article 5n(1), (2), (2a) and (2b) have general application, including on individuals.
15. Does the provision of services to EU established but Russian tax residents companies fall under the prohibitions of Article 5n?
Last update: 2 April 2024
Under Article 5n(1), lett. b, (2), lett., (2a), lett. b and (2b) lett. b of Council Regulation (EU) No. 833/2014, it is prohibited to provide the restricted services to legal persons, entities or bodies established in Russia (as well as to the Government of Russia). As a result, it is not prohibited to provide the restricted services to companies that are not established in Russia (including EU subsidiaries of entities established in Russia).
In principle, for the purpose of applying the prohibitions contained in Article 5n, it is not relevant that the EU established company is tax resident (also) in Russia. However, Article 5n prohibits both the direct and the indirect provision of the restricted services to entities established in Russia. As a result, it is possible to provide those services to the EU subsidiary of a Russian company, provided that they are not actually for the benefit of the company established in Russia.
However, it is prohibited to provide restricted services to the EU branches of Russian companies because they do not have legal personality and are considered as entities established in Russia.
It must be ensured that the rules described above are not used as a means to circumvent the application of the EU restrictive measures.
16. Does the exemption until 30 September 2024 under Article 5n(7) apply only when the Russian entity receiving the services is owned or controlled exclusively by legal persons, entities or bodies incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII?
Last update: 2 July 2024
No, it is sufficient that the Russian entity is owned, or solely or jointly controlled by a legal person, entity or body incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII.
The exemption until 30 September 2024 under Article 5n(7) may for instance apply when a Russian company is jointly controlled by an EU company and a company that is neither from the EU nor from a partner country as listed in Annex VIII.
To provide the restricted services after 30 September 2024, operators must obtain an authorisation from the relevant national competent authority according to Article 5n(10) lett. h of Council Regulation 833/2014.
17. Does the exemption under Article 5n(7) of Council Regulation 833/2014 apply if the legal persons, entities or bodies established in Russia are indirectly owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, the EEA, Switzerland or a partner country?
Last update: 2 July 2024
The exemption under Article 5n(7) applies until 30 September 2024 when the provision of services is intended for the exclusive use of entities established in Russia that are ultimately owned or controlled by an entity from a country of the EU or EEA, from Switzerland or from one of the partner countries as listed in Annex VIII to Council Regulation 833/2014.
In view of the above:
• the exemption applies if for example the Russian entity receiving the services is owned by an entity (which is neither Russian nor from the EU, EEA, Switzerland or partner country as listed in Annex VIII), which is in turn ultimately owned or controlled by a company from the EU, EEA, Switzerland or partner country as listed in Annex VIII;
• the exemption does not apply if for example the Russian entity receiving the services is owned or controlled by a company from the EU, EEA, Switzerland or partner country as listed in Annex VIII, which is in turn owned or controlled by a Russian company or by a company from another jurisdiction (a company not from the EU, EEA, Switzerland or partner country as listed in Annex VIII).
It must be ensured that the rules outlined above are not used as a means to circumvent the application of the EU restrictive measures.
To provide the restricted services after 30 September 2024, operators must obtain an authorisation from the relevant national competent authority according to Article 5n(10) lett. h of Council Regulation 833/2014.
18. Does the exemption under Article 5n(7) apply when the Russian legal person is owned or controlled by a natural person who is the citizen of a Member State, of a country member of the European Economic Area, of Switzerland or of a partner country as listed in Annex VIII?
Last update: 2 July 2024
No. The exemption, until 30 September 2024, under Article 5n(7) is meant to apply only to subsidiaries of EU companies (or of companies incorporated in EEA, Switzerland or a partner country as listed in Annex VIII). It does not apply to services provided to Russian companies owned or controlled by individuals, including when those individuals are from the EU, EEA, Switzerland or from one of the partner countries as listed in Annex VIII.
19. Do the prohibitions in Article 5n restrict the possibility to provide the relevant services to Russian entities controlled by foreign companies not being from the EU, EEA, Switzerland or from one of the partner countries as listed in Annex VIII?
Last update: 2 July 2024
Yes. The exemption under Article 5n(7) applies only with respect to entities owned or controlled by EU companies, companies incorporated in the EU, EEA, Switzerland or from one of the partner countries as listed in Annex VIII, and only applies until 30 September 2024.
To provide the restricted services after 30 September 2024, operators must obtain an authorisation from the relevant national competent authority according to Article 5n(10) lett. h of Council Regulation 833/2014.
20. When are legal advisory services indirectly provided for the purposes of Article 5n(2) of Council Regulation 833/2014?
Last update: 21 December 2022
An indirect provision of legal advisory services is constituted when another operator than the recipient of services is (also) benefitting from them. This could be the case when e.g. an EU subsidiary is receiving legal consultation, which indirectly benefits the Russian parent company.
Although a case-by-case assessment is required, certain legal services are more likely than others to be (also) for the benefit of the parent company: legal consultation regarding a local issue, e.g. car lease for local staff in a EU Member State, is less likely to constitute an indirect provision of prohibited legal advisory services as this typically benefits largely the EU subsidiary. However, e.g. the legal consultation to set up a new globally operating corporate structure probably would.
21. Are notarial services covered by the prohibition under Article 5n(2) of Council Regulation 833/2014? Does the prohibition also apply in cases where notaries are state-appointed public officers and exercise public authority when performing their activities on behalf of the participants? Is the exercise of public authority through notaries covered by the prohibition of “legal advisory services” within the meaning of the Council Regulation?
Last update: 21 December 2022
Yes, notarial services are covered by the prohibition under Article 5n(2) of Council Regulation 833/2014 if they are provided to an entity established in Russia or to the Government of Russia and do not fall within any of the applicable exemptions provided in Article 5n.
The status of the provider of the services is not relevant, only the provision of certain services itself is prohibited. The fact that seeking a certain service is mandated or even just recognised by the law does not mean that the provision of this service is somehow exempted from the prohibition set out by Art 5n(2) of Council Regulation 833/2014.
The prohibition applies for example to the authentication of contracts and other declarations directed at the performance of legal transactions, as well as the certification of signatures and the establishment of deeds regarding factual circumstances (these activities would be covered by the notion of “preparation, execution and verification of legal documents”; see recital 19 of Council Regulation 1904/2022).
22. Does the exemption for court and administrative procedures pursuant to Art. 5n(6) also apply to official notarial authentication procedures?
Last update: 21 December 2022
According to Article 5n(6), only those legal advisory services are exempted which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in the EU or which are needed for the recognition or enforcement of a judgment or an arbitration award rendered in the EU. If notarial authentication services are strictly necessary in those circumstances and meet the conditions, they are exempted from the prohibition.
23. Are pro bono legal services covered by the prohibition under Article 5n(2) of Council Regulation 833/2014?
Last update: 21 December 2022
No specific exemptions or derogations are provided for pro bono legal advisory services as such. As a result, it is in general prohibited to provide those services to the Government of Russia and to any legal person, entity or body established in Russia.
However, as with remunerated services, pro-bono services are not prohibited if they fall outside the scope of that prohibition or fall within the scope of application of the general exemptions provided under Article 5n (e.g. they are provided to a natural person, they are covered by the exemptions in paragraphs 5 or 6). The same services may also be authorized if they fall within the scope of application of one of the derogations provided in Article 5n (for example if their provision is necessary for humanitarian purposes or for civil society activities that directly promote democracy, human rights or the rule of law in Russia).
24. Are law firms and lawyers subject to EU jurisdiction authorized to represent the Government of Russia or legal entities established in Russia in judicial, arbitral or administrative proceedings outside the EU?
Last update: 21 December 2022
The exemption under Article 5n(6) only applies to the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, or for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State.
However, the provision of the legal advisory services may still be allowed (even outside of the EU) if it falls within the scope of Article 5n(5), i.e. if the services are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy.
25. Does the prohibition also cover legal advisory services under the Russian laws (or any other laws, non-EU) provided by the Russian representative office of an EU based legal entity?
Last update: 21 December 2022
The prohibition to provide legal advisory services applies regardless of the type of law (EU law, Russian law or other) to which it refers. The representative offices of EU legal entities are bound to comply with EU restrictive measures, and it is therefore prohibited for them to provide the restricted services to the Government of Russia or to companies in Russia (unless any of the exemptions or derogations in Article 5n apply).
26. Is it prohibited to provide sanctions compliance advice to Russian entities and the Government of Russia?
Last update: 21 December 2022
Russian companies are generally not bound to comply with EU sanctions, which typically only apply to EU companies and companies doing business in the EU. As a result, they should not in principle need to seek legal advice regarding the application of EU sanctions.
EU companies (not their Russian counterparties) are typically the entities applying for the authorizations to be issued by the national competent authorities of the EU Member States, under the derogations contained in the EU sanctions regulations. It is not prohibited to provide services to non-Russian entities (i.e., entities not established in Russia), even if they are subsidiaries of entities established in Russia. However, it is for example prohibited to provide services to EU or other non-Russian entities that are subsidiaries of entities established in Russia if those services would actually be for the benefit of the parent company established in Russia.
EU restrictive measures do not contain a specific exception for the provision of sanctions compliance advice as such.
However, the prohibition under Article 5n does not apply inter alia to the provision of:
• Services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy (paragraph 5); and
• Services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State, or for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of this Regulation and of Council Regulation (EU) No 269/2014 (paragraph 6). As explained in Recital 19 of Council Regulation (EU) 2022/1904, the prohibition of legal services does not apply to representation, advice, preparation of documents or verification of documents in the context of legal representation services.
In view of the above, the provision of sanctions compliance advice may not be prohibited if it falls in one or more of the cases explicitly allowed under the provisions above. In any event, legal services providers must pay particular attention that their services to Russian entities do not entail any legal advice which might be considered as a form of evasion of EU sanctions by those Russian entities and/or circumvention of those sanctions by EU companies.
27. How should the term “statutory audit” in Article 5n(1) of Council Regulation 833/2014 be interpreted?
Last update: 21 December 2022
In general terms, the scope of the services prohibited under Article 5n(1) of Council Regulation 833/2014 should be interpreted with reference to Annex II to Regulation (EC) No 184/2005 of the European Parliament and of the Council of 12 January 2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment. Accounting, auditing, bookkeeping and tax consultancy services cover the recording of commercial transactions for businesses and others; examination services of accounting records and financial statements; business tax planning and consulting; and the preparation of tax documents.
With respect in particular to the definition of ‘statutory audits’, in the European Commission’s view this may be interpreted by reference to the definition contained in Article 2(1) of Directive 2006/43/EC. Please note anyway that Article 5n(1) shall be read in its integrity and the “statutory audit” is just a subset, an example of all the services that must not be provided to the Russian government and to Russian entities.
28. Does ‘IT consultancy services’ cover the supply of software?
Last update: 2 April 2024
IT consultancy services include the development and implementation of software, as well as assistance or advice relating to the development and implementation of software, thus including the supply of bespoke software. However, the retail sale of off-the-shelf software is covered under a different CPC code (CPC 63252) and is therefore not included in the scope of IT consultancy services within the meaning of Article 5n(2) of the Council Regulation (EU) No 833/2014.
On 18 December 2023, the Council has adopted a prohibition to export, sale, transfer, supply or provision of software for the management of enterprises and software for industrial design and manufacture as listed in Annex XXXIX to Council Regulation 833/2014 to the Government of Russia or legal persons, entities or bodies established in Russia. For further information, see the dedicated FAQs on Software published on 6 February 2024.
29. Does ‘IT consultancy services’ cover software updates and upgrades?
Last update: 2 April 2024
The CPC classification of IT consultancy services referred to in Article 5n(2) of the Council Regulation (EU) No 833/2014 includes a category called ‘systems maintenance services’. Those include consulting and technical assistance services regarding software products in use, rewriting or changing existing programmes or systems, and maintaining up-to-date software documentation and manuals.
To that extent, IT consultancy services also include assistance or advice relating to software updates and upgrades, as well as bespoke software updates and upgrades. However, in cases where software updates and upgrades do not involve the provision of assistance or advice to the customer, for example in cases of the supply of automatic software updates to previously purchased software other than bespoke software, this should not be regarded as IT consultancy services within the meaning of Article 5n(2) of the Regulation.
30. Does the prohibition to provide legal advisory services also include the provision of legal representation in front of courts?
Last update: 30 June 2023
As recital 19 of Council Regulation 1904/2022 mentions, legal advisory services do not include any representation, advice, preparation of documents or verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings. Hence they are not subject to the prohibition.
31. Does IT consultancy services according to Art 5n(2) of Council Regulation (EU) No. 833/2014 also include ‘cloud services’?
Last update: 2 April 2024
No, ‘cloud services’ are in general not covered under the definition of ‘IT consultancy services’ set out in Article 5n(2) of the Regulation and are therefore not subject to the relevant prohibition.
However, the prohibition in Art. 5n(2b) covers software for the management of enterprises or software for industrial design and manufacture delivered in any form, also through cloud services (Software-as-a-service or Saas cloud services in relation to such software).
32. Are technical assistance or maintenance services provided for already existing software products, programmes or systems covered by the prohibition to provide IT consultancy services?
Last update: 30 June 2023
Yes, unless no exemption of derogation of Art 5n applies, maintenance services are also covered under the definition of “IT consultancy services” and hence prohibited. See also CPC class 8425 “systems maintenance services” in Question 8 above.
33. Why was a derogation needed from the prohibition to provide certain services to Russian companies in connection with firewalls?
Last update: 24 July 2023
The services prohibitions (Article 5n of Council Regulation (EU) No 833/2014) prevent the provision of certain services that may be necessary for the setting up of a firewall (in particular, legal advisory services and auditing services), whereas they would be directly or indirectly for the benefit of a Russian entity.
In view of the above, in such cases a derogation from Article 5n(1) and (2) of Regulation (EU) No 833/2014 allows the national competent authorities to authorise the provision of certain restricted services, under such conditions as they deem appropriate.
The derogation only applies if the relevant conditions are met, and notably provided that: (i) the relevant services are strictly necessary for the setting-up, certification or evaluation of a firewall; (ii) the firewall effectively removes the control by the listed person, entity or body over the assets of a non-listed EU person, which is owned or controlled by the former and (iii) ensures that no further funds or economic resources accrue for the benefit of the listed person (see also Question 42 of the FAQ on the Asset Freeze and Prohibition to make funds and economic resources available regarding in general the firewall and Questions 43 and 44 of the same FAQ regarding the corresponding derogation from the asset freeze and the prohibition on making economic resources available to listed persons).
34. Is the provision of ancillary services, i.e. technical assistance, financing or financial assistance and ‘other services’ to Russian subsidiaries of EU companies related to the restricted goods and services under Article 5n(1), (2), (2a) and (2b) of Council Regulation (EU) No 833/2014 possible?
Last update: 2 April 2024
Article 5n(3a) of Council Regulation 833/2014 prohibits the provision of ancillary services (e.g. technical assistance, brokering services, financing or financial assistance) related to goods and services prohibited under Article 5n(1), (2), (2a) and (2b).
Under Article 5n(10), the competent authorities may authorise the sale, supply, transfer, export, or provision of the services, including ancillary services under Article 5n(3a). Hence, an EU operator would need to submit an authorisation request with the relevant national competent authority to be able to continue to provide prohibited services, including technical assistance or financing, to the Government of Russia or legal persons, entities or bodies established in Russia.
Article 5n(4b) established a wind-down period until 20 March 2024 for software for prior contracts. Therefore, where the sale, supply, transfer or export of the good or the provision of the “main” service was exempted (as was the case during the wind-down period), the related ancillary services could continue to be provided as well.
35. As from 30 September 2024, EU operators will have to request an authorisation to provide “intra-group” services (see Art. 5n(10)(h)). Can they request an authorisation for more than one service (“bundled authorisation”) or for services provided from more than one Member State, e.g. via their subsidiaries in several Member States?
Last update: 2 April 2024
Member States and their national competent authorities are responsible for the implementation and enforcement of EU sanctions. This also concerns authorisation procedures (e.g. processing time, information and documents needed to grant authorisation, period for which an authorisation is granted, etc.).
A national competent authority may decide to grant “bundled authorisations” for similar services offered under the same derogation(s) to the same Russian client. By way of example, a national competent authority may grant an authorisation to a specific operator for a number of similar or identical services to be provided during a specific timeframe to the same Russian counterpart (e.g. weekly or quarterly) under a derogation concerning humanitarian purposes. This authorisation could be coupled with reporting obligations at the end of the stated period to ensure that the authorisation has been used according to the specified conditions.
Council Regulation (EU) 833/2014 does not foresee general authorisations covering entire sectors or activities (as e.g. would be possible under the US or UK system). Such a general authorisation would amount to a de-facto exemption, which the Council would need to establish explicitly. However, in the 12th sanctions package the Council has further replaced existing exemptions with derogations, requiring a prior authorisation.
Furthermore, the Court of Justice of the EU has clarified that a national competent authority must, when assessing authorisation requests, make an assessment on a case-by-case basis and that it is not authorised to give general approval to a certain category of transactions in respect of which the entities concerned would be relieved of the need to request authorisation on a case-by-case basis (Judgment of the Court of 5 March 2015, paragraph 76, EuropäischIranische Handelsbank AG v Council of the European Union, C-585/13P, ECLI:EU:C:2015:145).
An authorisation issued by the national competent authority of a Member State is valid only within that Member State. Therefore, authorisations are not automatically valid in other Member States e.g. in the case of a parent company and a subsidiary located in different Member States. Operators must request authorisations in each Member State they are planning to provide services from. When requesting an authorisation, the Commission recommends that the operator informs its national competent authority that a similar authorisation is being or has been requested for its subsidiary in another Member State. This will allow national competent authorities to exchange relevant information.
The Commission continues to support and monitor the uniform implementation of EU sanctions by Member States, including the granting of authorisations. Member States have the obligation to inform other Member States and the Commission of any authorisation granted pursuant to Art. 5n(11) of Reg. 833/2014.
36. Is the provision of services to the Russian Government or Russian entities via subsidiaries in third countries prohibited under Article 5n?
Last update: 2 April 2024
Article 5n prohibits the sale, supply, transfer, export and the provision of services and software to the Russian Government or Russian entities. The provision of services and software to the Russian Government or Russian entities by EU operators via their subsidiaries in third countries could be considered an indirect provision of these services, which would therefore be prohibited under Article 5n.
Moreover, Article 12 prohibits EU entities to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in this Regulation.
37. Are nationals of EU Member States subject to the prohibition to provide services, even if the services are provided as an employee of an EU mother company to a subsidiary in Russia?
Last update: 5 September 2024
Yes. According to Article 13 of Council Regulation 833/2014, any person inside or outside the territory of the Union who is a national of a Member State is subject to the prohibition. As a consequence, this would also include employees of EU operators providing the prohibited services to the subsidiary in Russia.
On 24 June 2024, an exemption for nationals of a Member State who are residents of Russia and were so before 24 February 2022 was introduced. They are allowed to provide certain services (otherwise covered by a prohibition under 5n(1), 5n(2), 5n(2a)) for the exclusive use of their employers, only if their employers are subsidiaries owned or controlled by entities established in a Member State, a country member of the European Economic Area, Switzerland or a partner country (as listed in Annex VII to Council Regulation 833/2014), see Article 5n(8a).
Pursuant to Article 5n(10) the competent authorities may authorise the sale, supply, transfer, export, or provision of the services (otherwise prohibited under 5n(1), 5n(2), 5n(2a), 5n(2b) and 5n(3a)) for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII.
See also Question 7 for further information.
ANNEX A - OVERVIEW OF PROHIBITIONS ON SERVICES AND SOFTWARE
|
Scope |
Accounting, auditing, including statutory audit, bookkeeping, tax consulting services, business and management consulting, public relations services Article 5n(1) Council Regulation 833/2014 |
Architectural and engineering services, legal advisory services, IT consultancy services Article 5n(2) Council Regulation 833/2014 |
Market research and public opinion polling services, technical testing and analysis services, advertising services Article 5n(2a) Council Regulation 833/2014
|
Software for the management of enterprises and software for industrial design and manufacture as listed in Annex XXXIX Article 5n(2b) Council Regulation 833/2014 |
|
Wind-down |
Termination by 5 July 2022 of contracts concluded before 4 June 2022 |
Termination by 8 January 2023 of contracts concluded before 7 October 2022 |
Termination by 16 January 2023 of contracts concluded before 17 December 2022 |
Termination by 20 March 2024 of contracts concluded before 19 December 2023 |
|
Exemption for services that are strictly necessary for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy Article 5n(5) Council Regulation 833/2014 |
Applicable |
Applicable |
Not Applicable |
Not Applicable |
|
Exemption for services that are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State Article 5n(6) Council Regulation 833/2014 |
Applicable |
Applicable |
Not Applicable |
Not Applicable |
|
Exemption for services that are strictly necessary for the recognition or enforcement |
Applicable |
Applicable |
Not Applicable |
Not Applicable |
|
of a judgement or an arbitration award rendered in a Member State Article 5n(6) Council Regulation 833/2014 |
|
|
|
|
|
Exemption for services intended for the exclusive use of entities owned or controlled by entities from EU, EEA or a listed partner country Article 5n(7) Council Regulation 833/2014 |
Applicable (until 30 September 2024) |
Applicable (until 30 September 2024) |
Applicable (until 30 September 2024) |
Applicable (until 30 September 2024) |
|
Exemption for services that are necessary for public health emergencies , the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment , or as a response to natural disasters Article 5n(8) Council Regulation 833/2014 |
Not Applicable |
Applicable |
Applicable |
Applicable |
|
Derogation for services necessary for: Article 5n(10) Council Regulation 833/2014 |
|
|
|
|
|
• humanitarian purposes (such as delivering or facilitating the delivery of assistance, including medical supplies, food, or the transfer of humanitarian workers and related assistance or for evacuations) |
Applicable |
Applicable |
Applicable |
Applicable |
|
• civil society activities that directly promote democracy, human rights or the rule of law in Russia |
Applicable |
Applicable |
Applicable |
Applicable |
|
• the functioning of diplomatic and consular representations of the Union and of the Member States or partner countries in Russia, or international organisations |
Applicable |
Applicable |
Applicable |
Applicable |
|
• |
ensuring critical energy supply within the Union and the purchase, import or transport into the Union of titanium, aluminium, copper, nickel, palladium and iron ore |
Applicable |
Applicable |
Applicable |
Applicable |
|
• |
ensuring the continuous operation of infrastructures, hardware and software which are critical for human health and safety, or the safety of the environment |
Applicable |
Applicable |
Applicable |
Applicable |
|
• |
the establishment, operation, maintenance, fuel supply and retreatment and safety of civil nuclear capabilities, and the continuation of design, construction and commissioning required for the completion of civil nuclear facilities, such as the Paks II projec t, the supply of precursor material for the production of medical radioisotopes and similar medical applications, or critical technology for environmental radiation monitoring, as well as for civil nuclear cooperation, in particular in the field of research and development |
Applicable |
Applicable |
Applicable |
Applicable |
|
• |
the provision of electronic communication services by Union telecommunication operators necessary for the operation, maintenance and security , including cybersecurity, of electronic communication services , in Russia, in Ukraine, in the Union, between Russia and the Union, and between Ukraine and the Union, and for data centre services in the Union |
Applicable |
Applicable |
Applicable |
Applicable |
|
• |
the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is |
Applicable |
Applicable |
Applicable |
Applicable |
|
incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII |
|
|
|
|
9. SOFTWARE
RELATED PROVISION: ARTICLE 5n(2b) OF COUNCIL REGULATION 833/2014
1. The EU has prohibited the provision of certain business-relevant services to the Russian government, as well as to legal persons such as companies and other entities or bodies established in Russia. What kind of services are prohibited?
Last update: 6 February 2024
As of 18 December 2023, it is prohibited to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for design and manufacture, to the Government of Russia or to legal persons, entities or bodies established in Russia.
A wind-down period of three months was introduced for the sale, supply, transfer, export, or provision of software that is strictly necessary for the termination by 20 March 2024 of contracts concluded before 19 December 2023 or of ancillary contracts necessary for the execution of such contracts.
The prohibition covers software in a material form (e.g. saved on a storage medium like a flash drive or printed on an IT support) or in intangible form (e.g. download from a cloud, transferred by technology by email).
The provision of technical assistance, brokering services or other services related to the prohibited software as well as the provision of financing or financial assistance is also prohibited (see Art. 5n (3a)).
2. What types of software are covered by the prohibition in Art. 5n(2b)?
Last update: 6 February 2024
The prohibition in Article 5n(2b) refers to two types of software – software for the management of enterprises and design and manufacturing software. This prohibition aims to further hamper Russia's capacities in its industrial sector.
Annex XXXIX lists the following types of software:
1. Software for the Management of Enterprises, i.e. systems that digitally represent and steer all processes happening in an enterprise, including:
• enterprise resource planning (ERP),
• customer relationship management (CRM),
• business intelligence (BI),
• supply chain management (SCM),
• enterprise data warehouse (EDW),
• computerized maintenance management system (CMMS),
• project management software,
• product lifecycle management (PLM),
• typical components of the above-mentioned suites, including software for accounting, fleet management, logistics and human resources.
2. Design and Manufacturing Software used in the areas of architecture, engineering, construction, manufacturing, media, education and entertainment, including:
• building information modelling (BIM),
• computer aided design (CAD),
• computer-aided manufacturing (CAM),
• engineer to order (ETO),
• typical components of above-mentioned suites.
3. Does the prohibition in Art. 5n(2b) also includes software updates?
Last update: 6 February 2024
Yes, the prohibition to sale, supply, transfer, export, and the provision of the software listed in Annex XXXIX also covers software updates.
Please note that assistance or advice relating to software updates and upgrade, as well as bespoke software updates and upgrades were already subject to a prohibition to provide IT Consultancy services to the Russian Government or Russian entities, according to Art. 5n(2).
4. Does Article 5n(2b) prevent the provision of software services to entities in third countries, other than Russia?
Last update: 6 February 2024
Article 5n(2b) concerns software for the management of enterprises and for industrial design and manufacture. It prohibits the sale, supply, transfer, export, and the provision of such software to the Russian Government or Russian entities. The intention is to deprive those recipients of the latest software development.
The prohibition in Article 5n(2b) does not affect the sale, supply, transfer, export, and the provision of the software in question to entities in other third countries, which are not targeted by the provision.
Consequently, the new prohibition allows an EU operator to continue providing software to its multinational clients with multiple global subsidiaries and affiliates, including when some of those affiliates are Russian.
However, this is different for cases of suspected circumvention, for instance if the client may in fact seek to acquire the software for a predominant use by a subsidiary established in Russia or any other legal person, entity or body established in Russia.
EU operators must carry out relevant due-diligence to avoid participating in circumvention (see also Article 12 of Regulation 833/2014 which prohibits EU operators to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions).
10. TRUST SERVICES
RELATED PROVISION: ARTICLE 5m OF COUNCIL REGULATION 833/2014
1. What should be understood by the term “trust or any similar legal arrangement” as mentioned in Article 5m of Council Regulation (EU) 833/2014?
Last update: 24 June 2022
There is a variety of trusts and legal arrangements used throughout the Member States. The common law trust serves as an example but there is no single definition of what qualifies as a “similar legal arrangement”. Accordingly, it would be relevant to assess such an arrangement’s structure or function as compared to that of a trust, such as the establishment of a fiduciary bond between parties and a separation or disconnection of legal and beneficial ownership of assets.
You may refer to Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing as well as the report from the Commission assessing whether Member States have duly identified and made subject to the obligations of Directive (EU) 2015/849 all trusts and similar legal arrangements governed under their laws.
2. What activities are prohibited in relation to trusts? How is this prohibition to be applied in practice?
Last update: 24 June 2022
Article 5m, paragraph 1, prohibits the registration of any trust or similar legal arrangement. Accordingly, no EU person should register a new arrangement. Where registration is mandatory under national law in order for the trust or another similar legal arrangement to be set up, this would not be possible.
With regards to trusts or similar legal arrangements which are already established, Article 5m paragraph 1 prohibits the provision of a registered office, business or administrative address as well as the provision of management services whereas paragraph 2, prohibits the provision of trustee services to any trust or similar legal arrangement.
As such services may be necessary for the operation of such arrangements, the prohibition requires their dissolution, the resurfacing of all assets as well as the restitution of assets to the trustor or distribution to beneficiaries (subject to a derogation under Article 5m paragraphs 5 and 6).
If a settlor or beneficiary of a trust or similar legal arrangement is a person subject to an asset freeze under EU sanctions, any assets to be returned or distributed to this person should be immediately frozen.
Please note that these prohibitions apply for any trust or similar legal arrangement having as a trustor or a beneficiary any of the persons described in paragraph 1(a) to (e) that is:
(a) Russian nationals or natural persons residing in Russia;
(b) legal persons, entities or bodies established in Russia;
(c) 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);
(d) legal persons, entities or bodies controlled by a natural or legal person, entity or body referred to in points (a), (b) or (c); or
(e) 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).
3. Article 5m was amended by Council Regulation (EU) 2022/879 of 3 June 2022. What has changed?
Last update: 24 June 2022
Article 5m was amended in the following manner:
• The wind-down period in paragraph 3 was extended from 10 May 2022 to 5 July 2022. From 5 July 2022, it will be prohibited to provide trustee services to trusts or similar legal arrangements falling under the scope of Article 5m, paragraph 1.
• Where, in compliance with Council Regulation (EU) 2022/576 of 8 April 2022, the winding-down of a trust or similar legal arrangement was initiated before 11 May 2022, a national competent authority may authorise operations strictly necessary for the termination until 5 September 2022.
• A national competent authority may also authorise the provision of services if the trustee does not accept from or distribute assets to a trustor or beneficiary in paragraph 1 (a) to (e). This means that a trust or similar legal arrangement can continue to operate, for instance, where there are several beneficiaries including EU persons.
• The derogation foreseen in paragraph 6 (previously paragraph 5) for humanitarian purposes and civil society activities was expanded to cover the operation of trusts whose purpose is the administration of occupational pension schemes, insurance policies or employee share scheme, charities, amateur sports clubs, and funds for minors or vulnerable adults.
• A new reporting obligation for Member States under paragraph 7, regarding any authorisation granted under paragraphs 5 and 6.
4. If beneficiaries of such trusts include both Russian nationals and non-Russian nationals, how should the prohibition be applied?
Last update: 24 June 2022
The prohibition to register a new trust or provide trustee services only applies where a settlor or beneficiary is a Russian person as defined under paragraph 1 (a) to (e). Where applicable, these services could be provided or continue if these persons are removed from the trust or similar legal arrangement.
Furthermore, in accordance with Article 5m, paragraph 4, the prohibitions do not apply where a trust or similar legal arrangement has only one trustor or one beneficiary who is a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State.
Finally, paragraph 5(b) provides that a national competent authority may also authorise the provision of services if the trustee does not accept from or distribute assets to a trustor or beneficiary in paragraph 1 (a) to (e). This means that a trust or similar legal arrangement can continue to operate, for instance, where there are several beneficiaries including EU persons.
5. Should trusts apply individually for a derogation or can a national competent authority provide an exemption for all trusts of a similar type, such as pension funds?
Last update: 24 June 2022
National competent authorities should ensure that any authorisation granted fulfils the derogation conditions as laid down in Article 5m of Council Regulation 833/2014. Accordingly, the provision of any prohibited services to trusts or any similar legal arrangement falling under the scope of the Regulation should be authorised individually.
6. Do the prohibitions apply to dual nationals (having Russian nationality and the nationality of an EU Member State) as well as persons of Russian nationality who have a temporary or permanent residence permit in another Member State?
Last update: 24 June 2022
Russian nationals falling under the scope of paragraph 1 (a) and (e) with dual RussianEU nationality or having a temporary or permanent residence permit in a Member State can benefit from the exemption under Article 5m, paragraph 4.
The exemption provides that prohibitions do not apply where a trust or similar legal arrangement has only one trustor or one beneficiary who is a national of a Member State or a natural person having a temporary or permanent residence permit in a Member State.
For a dual national having both Russian nationality and a nationality of a country other than that of a Member State, the prohibitions in Article 5m apply.
For trusts with both Russian and non-Russian settlors or beneficiaries, we refer you to Question 4 of this FAQ.
7. Should undertakings for the collective investment in transferable securities (UCITS) or alternative investment fund (AIF) structures be deemed to be covered by the terms “trust or any similar legal arrangements” within the meaning of Article 5(m)?
Last update: 8 July 2022
Whilst there exists a variety of trusts and legal arrangements throughout the Member States, the qualification of UCITS or AIF structures would need to be assessed on the merits of the specific circumstances, such as the nature, structure, administration function, location/custody of assets, discretionary/non-discretionary mandate of the fund in question and the beneficial owners of the assets.
Against this background, UCITS should normally not be deemed to be covered by the term “trust or similar legal arrangements” since UCITS is a regulated financial product. Accordingly, it should meet the requirements set out in Directive 2009/65/EC, must be authorised by a national competent authority (NCA) and be managed by an approved UCITS management company. Nevertheless, given that UCITS may be constituted in accordance with contract law (as common funds, including unit trusts managed by management companies), trust law (as unit trusts), or statute (as investment companies), it could prove relevant - especially where UCITS have been constituted in accordance with trust law - to assess UCITS structure or function, including the establishment of a fiduciary bond between parties and a separation or disconnection of legal and beneficial ownership of assets, etc.
As regards the use of AIF structures, there are no harmonised rules at EU level regarding the operation of AIFs. The generic term “AIF structures” may, in principle, be deemed to fall within the notion of “trusts or similar legal arrangements”. That is particularly relevant for situations where AIFs are constituted in accordance with trust law or contract law, for non-EU AIFs, AIFs with no legal personality, self-managed AIFs and certain offshore AIF structures of third countries which may happen to be largely unsupervised and non-transparent or non-reporting vehicles with opaque nature/function of the management mandate, assets and their location and/or beneficial owners. In this context, it is particularly relevant to refer to Article 12 of Council Regulation (EU) 833/2014, which seeks to prohibit activities the object or effect of which is to circumvent, prohibitions set out in that Regulation.
8. Should foundations be considered to fall under the scope of the prohibition?
Last update: 8 July 2022
Foundations are regarded as the civil law equivalent to a common law trust, as they may be used for similar purposes. This equivalence is reflected in Directive (EU) 2015/849 which imposes on foundations the same beneficial ownership requirements as on trusts and similar legal arrangements. Accordingly, persons holding equivalent positions in foundations as settlors and beneficiaries should be construed as being subject to the same restrictions under Article 5m.
11. CHEMICALS
RELATED PROVISION: REGULATION (EC) No 1907/2006; COUNCIL REGULATION 833/2014; COUNCIL REGULATION 269/2014
1. How do EU sanctions, in particular Council Regulation (EU) No 269/2014 and Council Regulation (EU) No 833/2014, interplay with Regulation (EC) No 1907/2006 and other EU legislation on chemicals in general?
Last update: 1 July 2022
European Union sanctions, including Council Regulation (EU) No 269/2014 and Council Regulation (EU) No 833/2014 apply as lex specialis with respect to Regulation (EC) No 1907/2006 and other Union legislation on chemicals in general. This means that, while both instruments must continue to be interpreted purposively, that is to say to give full effect to their objectives, the provisions of the latter should apply as long as they are not in conflict with EU sanctions or they cannot be derogated from (see e.g. Question 5).
2. What does Council Regulation (EU) No 269/2014 entail for communication platforms for data sharing and chemical companies?
Last update: 24 July 2024
Under Council Regulation (EU) No 269/2014, the EU has designated a number of individuals and legal persons as subject to sanctions. Being a “designated person” means that all funds and economic resources, directly or indirectly belonging to, held or controlled by a designated person must be frozen. In practice, any EU legal and private person and EU Member State’s public institution doing business in the EU must prevent any transfer of, alteration of, access to, use of or other dealings with those funds or economic resources. The freezing of economic resources of a designated person means that any asset of a designated person, whether tangible or intangible, cannot be used by anyone to obtain other funds or assets. Property rights over data and vertebrate or nonvertebrate studies qualify as economic resources since they can be used by the data owner or the recipient of a letter of access to obtain economic benefits (e.g. via the submission of a registration dossier to the European Chemicals Agency (ECHA) or updates of an existing registration). Hence, they are subject to such restriction.
Council Regulation (EU) No 269/2014 also prohibits making funds or economic resources available to designated persons or persons owned/controlled by them. By way of example, this means that no further trade with those persons is possible as of the moment of their designation. This includes sharing data and studies or making available financial profits to a designated communication platform member, including if they are originating from costs sharing. Council Regulation (EU) No 269/2014 provides for several exceptions, in particular Article 6e(1a) whereby the National Competent Authorities (NCAs) of a Member State, based on a specific and case-by-case assessment, may authorise, for each relevant transaction separately, the release of certain frozen funds or economic resources belonging to natural persons listed in Annex I thereto who held a significant role in international trade in agricultural and food products, including wheat and fertilisers, prior to their listing, or the making available of certain funds or economic resources to those persons, under such conditions as the NCAs deem appropriate and after having determined that such funds or resources are necessary for the sale, supply, transfer or export of agricultural and food products, including wheat and fertilisers, to third countries in order to address food security. Subject to the assessment of the NCA, in the context of REACH Regulation this derogation can apply in the case of chemicals whose intended use is as fertilisers.
See also on this Commission FAQs on Sanctions adopted following Russia’s military aggression against Ukraine (‘Russia sanctions FAQs’), Section A. Horizontal as well as Circumvention and Due diligence, and B. Individual financial measures.
3. What does Council Regulation (EU) No 833/2014 entail for communication platforms for data sharing and chemical companies?
Last update: 24 July 2024
Council Regulation (EU) No 833/2014 provides for a number of trade restrictions. In particular, Article 5aa prohibits engaging in transactions with certain legal persons, entities or bodies, and Article 5n prohibits the provision of business and management consulting services as well as advisory services to, inter alia, legal persons established in Russia. It is an obligation on the existing or potential registrants in REACH to take necessary actions to comply with Council Regulation (EU) No 833/2014.
As far as data sharing is concerned, obtaining permission to refer to data in exchange for cost compensation qualifies as a transaction and it is therefore not permitted when the previous registrant or data owner meets the criteria provided for by letters (a) to (c) of Article 5aa. In this case, the potential registrant should indicate to ECHA that an agreement could not be concluded due to the transaction ban provided for by Council Regulation (EU) No 833/2014. ECHA will then decide whether to grant permission to refer to data. For the case where the potential registrant meets the criteria provided for by letters (a) to (c) of Article 5aa, see Question 6.
Obtaining permission to refer to data from a previous registrant or data owner established in Russia, or from an Only Representative (OR) of a legal entity established in Russia, is not, per se prohibited according to Article 5n. However, as explained in Questions 14 and 15, and subject to the assessment of the NCA, an OR cannot provide business and management consulting services and legal advisory services to a client established in Russia. Subject to the assessment of the NCA, this may prevent an OR from representing a Russian client in data sharing negotiations. In this case, the potential registrant should indicate to ECHA that an agreement is not reachable due to Council Regulation (EU) No 833/2014. ECHA should then decide whether to grant permission to refer to data. For the case where the potential registrant is an OR of a legal entity established in Russia, see Question 7.
In case of doubt, business operators can seek guidance from their National Competent Authorities (NCAs).
See also on this Commission FAQs on Sanctions adopted following Russia’s military aggression against Ukraine (‘Russia sanctions FAQs’), Section A. Horizontal as well as Circumvention and Due diligence, and Section B. Individual financial measures.
4. Should the EU members of a communication platform constituted for generating studies or for data sharing purposes, or an Only Representative (OR) comply with EU sanctions?
Last update: 1 July 2022
Yes. EU citizens as well as EU business operators incorporated or constituted under the law of a Member State or doing business in full or in part in the EU are required to comply with EU Sanctions (e.g. Article 13 of Council Regulation (EU) No 833/2014). This includes the different types of communication platforms governed by Union or national Law, as well as their members meeting the conditions indicated above and ORs pursuant to Article 8 of the REACH Regulation.
5. Should I comply with the mandatory data sharing obligations under Articles 25–27 and 30 of the REACH Regulation and related obligations if the potential registrant is a company designated under Council Regulation (EU) No 269/2014, or owned/controlled by a designated person under Council Regulation (EU) No 269/2014?
Last update: 24 July 2024
No. As long as the potential registrant is designated under Council Regulation (EU) No 269/2014 or other EU sanctions (or owned/controlled by a designated person), it cannot receive economic resources from those who are required to comply with Article 11 of Council Regulation (EU) No 269/2014. Previous registrants owning the relevant data must refrain from entering data sharing negotiations and granting letters of access to those that are designated or owned/controlled by a designated person. Ongoing negotiations should be suspended as long as the person is designated or owned or controlled by a designated person. Note that derogations and exemptions under Council Regulation (EU) No 269/2014 may apply. It is an obligation of the data owner to comply with EU sanctions; hence, data owners should investigate if the potential registrant is a company designated under Council Regulation (EU) No 269/2014, or owned/controlled by a designated person under Council Regulation (EU) No 269/2014 (see also Question 3).
A data owner that is a designated person or a company owned or controlled by a designated person is still obliged to enter mandatory data sharing negotiations. However, it cannot receive financial benefits from it (e.g. a designated member of the communication platform cannot receive funds stemming for instance from data sharing agreements and cost sharing as long as it is designated). Costs due to the designated data owner could be kept in an escrow account until the data owner is no longer designated. If a designated company is non-cooperative or requires payment of the share of the costs for access to studies, the potential registrant should indicate to ECHA that an agreement is not reachable due to the asset freeze derived from EU sanctions. ECHA should then decide whether to grant access to the data .
On the identification of potential registrants or previous registrants that are designated, or owned or controlled by designated persons, see Question 8.
6. Should I comply with the mandatory data sharing obligations under Articles 25–27 and 30 of the REACH Regulation or related obligations if the potential registrant is a company that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014?
Last update: 24 July 2024
No. Article 5aa(1) of Council Regulation (EU) No 833/2014 prohibits to directly or indirectly engage in any transaction with:
(a) a legal person, entity or body established in Russia, which is publically controlled or with over 50 % public ownership or in which Russia, its Government or Central Bank has the right to participate in profits or with which Russia, its Government or Central Bank has other substantial economic relationship, as listed in Annex XIX;
(b) a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIX; or
(c) a legal person, entity or body acting on behalf or at the direction of an entity referred to in point (a) or (b) of this paragraph.
Granting a letter of access in exchange of cost sharing qualifies as a transaction and therefore it is not permitted in the cases mentioned under Article 5aa. Exemptions may apply, in particular Article 5(2).
For the case where the previous registrant or data owner meets the criteria provided for by letters (a) to (c) of Article 5aa, see Question 3. On the identification of potential registrants or previous registrants that are subject to the transaction ban, see Question 8.
7. Should I comply with the mandatory data sharing obligations under Articles 25–27 and 30 of the REACH Regulation or related obligations if the potential registrant is an OR of a legal entity established in Russia?
Last update: 24 July 2024
Granting a permission to refer to data for the purposes of compliance with the REACH
Regulation does not, per se, qualify as one of the prohibited services according to Article 5n of Council Regulation (EU) No 833/2014. However, as explained in Questions 14 and 15 and subject to the assessment of the NCA, an OR cannot provide business and management consulting services and legal advisory services to a client established in Russia, including representing that client in data sharing negotiations. This will effectively prevent the parties from concluding a data sharing agreement, unless an exception from the prohibition established by Article 5n applies.
For cases where the potential registrant is designated under Council Regulation (EU) No 269/2014 or meets the criteria under letters (a) to (c) of Article 5aa of Council Regulation (EU) No 833/2014 see, respectively, Questions 5 and 6.
8. What should I do, as a potential registrant or as a previous registrant, to ensure that my counterpart is not designated under Council Regulation (EU) No 269/2014, owned/controlled by a designated person under Council Regulation (EU) No 269/2014 or does not meet the criteria under letters (a)– (c) of Article 5aa of Council Regulation (EU) No 833/2014?
Last update: 24 July 2024
It is for the companies that are required to comply with Council Regulation (EU) No 833/2014 and Council Regulation (EU) No 269/2014 as per, respectively Article 13 and Article 17, to decide which due diligence activities to carry out, in the light of the relevant risk assessment. This said, in order to exclude their liability for a sanction breach, a company must be able to demonstrate they had no reasonable cause to suspect that their actions would infringe the measures set out in the relevant Regulation (as per e.g. Article 10(2) of Council Regulation (EU) No 269/2014). Subject to the assessment of the NCA, a potential registrant or a previous registrant could not invoke the protection granted by that provision if they failed to carry out sanctions compliance practices, such as contractually agreeing that the counterpart will not breach sanctions in relation to the economic resources provided or requesting a declaration that the counterpart is not listed or subject to sanctions whatsoever.
The responsibility for a sanction breach does not depend on its value or gravity, therefore minor breaches or breaches where the risk of infringement was low (and therefore no or limited due diligence was carried out) do not exclude or limit the liability, unless the absence of reasonable cause of suspicion can be shown. Imposing due diligence checks on the counterpart for the purposes of compliance with sanction legislation appears therefore to be legitimate, even in case of low risk of non-compliance. A case-by-case assessment is warranted to ensure that the request is nevertheless not abusive. The requesting company should also not simply rely on the declaration of the counterpart but should carry out its own verifications. If these verifications cannot confirm the statements by the other party, and the information is necessary due to a reasonable suspicion of possible infringement of sanctions, the potential registrant or previous registrant will have to refrain from any further co-operation as per the sanction provisions relevant in each case. The above is in line with the Commission Guidance for EU operators: implementing enhanced due diligence to shield against Russia sanctions circumvention (page 7) , which reads as follows:
First of all, especially when exporting goods subject to restrictions, EU operators need to know their counterparts and how reliable they are. They should include, in particular, contractual clauses with their third-country business partners prohibiting further re-exports of the items to Russia and Belarus. For example, such a clause may oblige the importer in third countries not to export the concerned goods to Russia or Belarus, and not to resell the concerned goods to any third party business partner unless that partner commits not to export the concerned goods to Russia or Belarus. It is vital that the contractual clause gives rise to liability and can be enforced under the law applicable to the contract.
The clause may also entail ex post verifications, and may be identified an essential element of the contract. See also the notice to operators of 1 April 2022. It is for Member States to implement and enforce sanctions. The European Commission has the role of ensuring uniform implementation throughout the Union and monitoring enforcement by the Member States.
9. What should communication platforms do if they have entered a data sharing agreement with a company before it was designated or before the company that owns or controls it was designated under Council Regulation (EU) No 269/2014?
Last update: 24 July 2024
Having made funds or economic resources available to a person before it was designated does not qualify as a violation of EU sanctions. However, in general EU sanctions do not allow to continue providing goods and services to a designated person, even under a prior contract. It is for the communication platform to decide which actions are necessary, taking into account its business operations and existing agreements, to ensure compliance with the asset freeze obligation and the prohibition to make funds available to or for the benefit of designated persons. Only the necessary actions to comply with those obligations should be taken (see also Question 21). For instance, a communication platform must make sure, also taking the appropriate contractual measures, that no further funds or economic resources are made available to the designated members (e.g. from further implementation of existing cost-sharing agreement) and, if appropriate, exclude or suspend the relevant company from the Communication platform. See also Question 8.
Communication platforms should remain vigilant and report to NCA information that might be relevant for the implementation of sanctions as provided in Article 8(1)(a) of Council Regulation (EU) No 269/2014. (e.g. circumvention attempts they become aware of, such as a listed company making use of a third company to join the platform as a middle person).
10. What should communication platforms do if they have entered a data sharing agreement with a company before it met the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014?
Last update: 24 July 2024
Having engaged in transactions with a company before it met the criteria under letters (a)–(c) of Article 5aa does not violate Council Regulation (EU) No 833/2014. However, communication platforms should not engage in further transactions with those companies. It is for the communication platform to decide which actions are necessary, taking into account its business operations and existing agreements, to ensure compliance with Council Regulation (EU) No 833/2014. This may include to ensure that funds or economic resources including data stemming from existing agreements on cost-sharing or granted letters of access are not made available to that designated member of the platform.
Communication platforms should remain vigilant and report to the NCA information that might be relevant for the implementation of sanctions as provided in Article 6b(1)(a) of Council Regulation (EU) No 833/2014 (e.g. circumvention attempts they become aware, such as a company that met the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014 making use of a third company as a middle person to join the platform).
11. Do data sharing obligations after the submission of a registration dossier under Article 3 of Council Regulation 2019/1692 apply in case the communication platform has granted a letter of access to a company that has become designated or owned/controlled by a designated person, or a company that now meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014?
Last update: 24 July 2024
No. Further data sharing is not possible in this case. Should the lead registrant be a designated entity or owned/controlled by a designated person, or a company that now meets the criteria under letters (a)–(c) of Article 5aa, Council Regulation (EU) No 833/2014, and the communication platform should take action to change its lead registrant. In principle, and subject to the NCA assessment, the actions that are strictly necessary to that end are not, in principle and subject to the assessment of the NCA, prohibited under Article 5n of Council Regulation (EU) No 833/2014. These actions include terminating, suspending or otherwise severing data sharing or joint submission agreements between the lead registrant and other registrants, as well as surrendering the lead registrant’s role to another registrant according to procedures made available by ECHA. The NCA may ensure that in that context no other services are provided to those persons. Exceptions might apply (see Question 15).
12. Can I submit a joint registration dossier as a lead registrant if a co-registrant is designated or is owned or controlled by a designated person, is a company that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014, or is an OR of a legal entity established in Russia??
Last update: 24 July 2024
No. Such a sub-submission would entail making economic resources available to a designated person. A lead registrant submitting such a registration dossier would be in violation of Council Regulation (EU) No 269/2014. Moreover, ECHA must freeze REACH registration dossiers as that would be for the benefit of a designated person or a person owned or controlled by a designated person. Similarly, submitting a joint registration dossier would be tantamount to entering a transaction with a company that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014, which is prohibited by that article. Finally, subject to the assessment of the NCA, such a submission would most likely qualify as an indirect provision of prohibited management and consulting service to a legal entity established in Russia, as per Article 5n(1) of Council Regulation (EU) No 833/2014.
On the submission of registration updates, see also Questions 16 and 17.
13. As an OR or a Third Party Representative (TPR), can I represent a designated company or a company owned or controlled by a designated person, or a company that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014, for instance to submit the update to the registration dossier pursuant to Article 22 of the REACH Regulation?
Last update: 24 July 2024
No, as this would be tantamount to making resources available to a designated person or entering a transaction prohibited under Article 5aa. Exceptions might however apply.
In principle, and subject to NCA assessment, activities aimed at discontinuing the relationship between the OR or TPR and the represented company are not covered by this prohibition. These include terminating, suspending or otherwise severing contracts in place with that company and surrendering the lead registrant’s role to another registrant according to procedures made available by ECHA. Similarly, the mere notification of a cessation of import as provided for by Article 22(1)(c) and 50 of the REACH Regulation or the submission of information about the non-EU entity to ECHA, including for the purposes of Section 1.1.4 of Annex VI of the REACH Regulation, do not constitute a breach of sanctions.
14. Outside the case discussed under Question 13 of this section of the Russia Sanctions FAQs, as an OR, can I represent a company established in Russia for REACH Regulation-purposes (e.g. submitting, updating or holding a registration or an application for authorisation)?
Last update: 24 July 2024
Article 5n(1) of Council Regulation (EU) No 833/2014 prohibits, inter alia, the provision, directly or indirectly, of business and management consulting services to, inter alia, legal persons, entities or bodies established in Russia.
According to the answer to Question 1, Section G.8 (provision of services) of the Russia sanctions FAQs, such prohibition covers business and management consulting and public relations services cover advisory, guidance and operational assistance services provided to businesses for business policy and strategy and the overall planning, structuring and control of an organisation, management fees, management auditing; market management, human resources, production management and project management consulting; and advisory, guidance and operational services related to improving the image of the clients and their relations with the general public and other institutions are all included.
According to the ECHA Guidance on Registration, Section 2.1.2.5 :
“a natural or legal person established outside the EU, who manufactures a substance, formulates a mixture or produces an article can appoint an only representative to carry out the registration of the substance that is imported”
[…]
“The only representative must keep an up-to-date list of EU customers (importers) within the same supply chain of the ‘non-EU manufacturer’ and the tonnage covered for each of these customers, as well as information on the supply of the latest update of the safety data sheet. The only representative is legally responsible for the registration and should be contacted by importers for any information related to registration in the EU.”
Against this backdrop, the activities of ORs for the benefit of legal persons, entities or bodies established in Russia, as described in the ECHA Guidance, appear to fall within the scope of the prohibited services under Article 5n(1), as clarified in Section G.8 of the Russia sanctions FAQs. It is for the OR to assess on a case-by-case basis its specific activities against Article 5n(1) and these FAQs. Since sanctions enforcement is part of the remit of Member States, economic operators can seek further guidance on their specific case to National Competent Authorities.
It is a responsibility of the OR to immediately discontinue the provision of prohibited services. This includes, first and foremost, taking the necessary contractual adjustements. In taking those actions, ORs can rely on Article 11 of Council Regulation (EU) No 833/2014, whereby no claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under such Regulation shall be satisfied, if they are made by, inter alia, any Russian person, entity or body . Note that the transitional period for services strictly necessary for the termination of contracts not compliant with these provisions under Article 5n(3) ended on 5 July 2022. Article 5n does however envisage a number of exceptions .
In principle, and subject to NCA assessment, activities aimed at discontinuing the relationship between the OR and the company established in Russia are not covered by the prohibition. These include terminating, suspending or otherwise severing contracts in place with that company and, as the case may be, surrendering the lead registrant’s role to another registrant according to procedures made available by ECHA. Similarly, the mere notification of a cessation of import as provided for by Articles 22(1)(c) and 50 of the REACH Regulation or the submission of information about the non-EU entity to ECHA, including for the purposes of Section 1.1.4 of Annex VI of the REACH Regulation, is not a service prohibited pursuant to Article 5n of Council Regulation (EU) No 833/2014. The above considerations also apply to TPRs of legal entities acting on behalf of manufacturers established in Russia, for their respective activities as provided for by Article 4 of the REACH Regulation.
15. Do advisory activities for REACH Regulation-related purposes, such as data sharing negotiations, setting up communication platforms, registration dossier submissions or update and application for authorisations, fall within the scope of the prohibition of Article 5n(2) of Council Regulation (EU) No 833/2014, if provided to or on behalf of companies established in Russia or their representatives?
Last update: 24 July 2024
According to the answer to Question 11, Section G.8 (provision of services) of the Russia sanctions FAQs, Art 5n(2) of Council Regulation (EU) No 833/2014 encompasses the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law, participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties; and preparation, execution and verification of legal documents.
It is for the economic operator to assess, on a case-by-case basis, which of their activities fall within the scope of the prohibition. This said, and subject to the assessment of the NCA in the specific case, several of the services normally provided by lead registrants, communication platforms and lawyers for REACH Regulation-related purposes such as registration dossier submission or update, application for authorisations, appear to fall within the scope of the prohibition (e.g. drafting of consortium and other agreements, provision of legal advice on REACH and other relevant EU legislation, representing companies established in Russia in the context of data sharing negotiations etc.).
Note that Article 5n provides for carve outs for the exercise of the right of defence in judicial proceedings and the right to an effective legal remedy or to ensure access to contractual clauses). If the restrictive measures cease to apply, the operator would have to comply with its obligation. judicial, administrative or arbitral proceedings in a Member State, or for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of Council Regulation (EU) No 833/2014 and of Council Regulation (EU) No 269/2014.
16. Can I submit information under the first paragraph of Article 11 of the REACH Regulation on behalf of a co-registrant that is designated or is owned or controlled by a designated person?
Last update: 24 July 2024
In order to submit joint updates of registration dossiers, the lead registrant should:
- identify the co-registrants that are designated or owned or controlled by a designated person;
- encourage those co-registrants to cease manufacture or import and to notify the cessation to ECHA pursuant to Articles 22(1)(c) and 50 of the REACH Regulation by a given deadline;
- monitor the registration status of the co-registrants in question until the indicated deadline;
- duly inform the NCA of all the above and communicate any other relevant information as per Article 8(1)(a) of Council Regulation (EU) No 269/2014. This will be the case even if the designated co-registrant does not co-operate with the request of the lead registrant to cease manufacture or import, provided that the NCA has been informed accordingly.
Finally, as a good due diligence practice, the registrants of the substance should also disseminate the relevant information to their supply chain and concerned persons, as appropriate.
It is nonetheless to be recalled that NCAs are exclusively responsible to assess each case of possible breach of sanctions, and economic operators can seek for further guidance from them. Exceptions may apply.
17. Can I submit information under the first paragraph of Article 11 of the REACH Regulation together with a co-registrant that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014 ?
Last update: 24 July 2024
In order to submit joint updates of registration dossiers, the lead registrant should:
- identify the co-registrants that meet the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014;
- encourage those co-registrants to cease manufacture or import and to notify the cessation to ECHA pursuant to Articles 22(1)(c) and 50 of the REACH Regulation by a given deadline;
- monitor the registration status of the co-registrants in question until the indicated deadline;
- duly inform the NCA of all the above and communicate any other relevant information as per Article 6b(1) of Council Regulation (EU) No 833/2014.
This will be the case even if the co-registrant that meet the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014 does not co-operate with the request of the lead registrant to cease manufacture or import, provided that the NCA have been informed accordingly.
Finally, as a good due diligence practice, the registrants of the substance should also disseminate the relevant information to their supply chain and concerned persons, as appropriate.
It is nonetheless to be recalled that NCAs are exclusively responsible to assess each case of possible breach of sanctions, and economic operators can seek for further guidance from them. Exceptions may apply.
18. As an OR of a legal entity established in Russia, should I submit or make information available to ECHA or to any competent authority of the Member State in which I am established, if requested to do so pursuant to Article 36 of the REACH Regulation?
Last update: 24 July 2024
Yes. Article 36 provides that any manufacturer or importer must assemble and keep available all the required information to carry out his or her duties under the REACH Regulation for at least 10 years after the end of manufacture or import. Requests to provide this information are addressed to the OR in their individual capacity, and, in principle and subject to NCA assessment, their fulfilment is permitted under para 6 of Article 5n Council Regulation (EU) No 833/2014.
19. I have received a request to submit information to ECHA to support my selfdeclaration as a SME, for the purposes of the determination of a fee under the REACH Regulation. As an OR of a legal entity established in Russia, can I fulfil this request?
Last update: 24 July 2024
Yes. In principle, and subject to the NCA assessment, the prohibition to provide business and management consulting services and legal advisory services to legal entities established in Russia does not entail restrictions that prevent or prohibit economic operators from co-operating with ECHA in the context of verifications of their SME status. This includes making information in their possession available to ECHA and, if necessary, seeking further information from the legal entity they represent. ECHA’s verification is based on Commission Regulation (EC) No 340/2008, and a failure to provide evidence supporting a previous declaration on the company size may result in the obligation to pay an additional fee or administrative charge.
The verification of the eligibility of economic operators to fee reductions is also carried out retrospectively, so the above considerations also apply to ORs who terminated or suspended their services to the legal entity established in Russia.
20. As an OR of a legal entity established in Russia, should I pay my outstanding ECHA invoices originating from activities I performed in the interest of my client?
Last update: 24 July 2024
Yes. In principle, and subject to the NCA assessment, invoices issued by ECHA are based on the REACH Regulation, Commission Regulation (EC) No 340/2008 and the other legislation governing the financial management of the Agency. These are independent from any service agreement between the OR and his or her client. The prohibition to provide certain services to legal entities established in Russia, pursuant to Article 5n of Council Regulation (EU) No 833/2014, does not exempt economic operators from settling their own debts with third parties, including when they arose from the submission of registrations or applications in the interest of a legal entity established in Russia.
When the OR already terminated or suspended their contractual relationship with the legal entity established in Russia, it is left to the addressee of the invoice to recover the payment from their former client, based on any indemnity clause or similar arrangements applicable in each case.
21. How can I protect myself from claims from a potential registrant that is designated or owned or controlled by a designated person regarding the fact that I refused to enter negotiations under Article 25–27 and 30 of the REACH Regulation with it or from other actions I have taken to comply with EU sanctions?
Last update: 1 July 2022
All Council Regulations establishing EU sanctions envisage a standard provision which shields those required to comply with EU sanctions from claims from third parties for those very actions. By way of example, Article 11(1) of Council Regulation (EU) 269/2014 reads: ‘No claims in connection with any contract or transaction the performance of which has been affected, directly or indirectly, in whole or in part, by the measures imposed under this Regulation, including claims for indemnity or any other claim of this type, such as a claim for compensation or a claim under a guarantee, particularly a claim for extension or payment of a bond, guarantee or indemnity, particularly a financial guarantee or financial indemnity, of whatever form, shall be satisfied, if they are made by: (a) designated natural or legal persons, entities or bodies listed in Annex I; (b) any natural or legal person, entity or body acting through or on behalf of one of the persons, entities or bodies referred to in point (a).’ Article 11(1)(a)–(b) of Council Regulation (EU) No 833/2014 mirrors the above provision of Council Regulation (EU).
22. As an EU company, can I provide my scientific data to a company in a third country, knowing that those data could be forcibly shared by the local authority to persons listed under Annex I to Council Regulation (EU) No 269/2014, or owned or controlled by them?
Last update: 24 July 2024
No. Article 10 of Council Regulation (EU) No 833/2014 establishes that actions by natural or legal persons, entities or bodies shall not give rise to liability of any kind on their part, if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in that Regulation. If the EU company has reasonable cause to suspect that the data can be shared with a listed company, they should not be provided to a company in a third country, even if that is one of its subsidiaries. This can happen for instance if the third country is not aligned with EU sanctions and it has implemented REACH Regulation-type legislation.
23. Can I grant a letter of access to a company in Russia or in another third country for the manufacturing of chemicals included in Annex VII of Council Regulation (EU) No 833/2014 which are intended to be exported in Russia or to be used in Russia.
Last update: 24 July 2024
No. Council Regulation (EU) 2023/1214 of 23 June 2023 (“11th sanctions package”) adding Article 2a(2)(c) to Regulation (EU) No 833/2014 includes the prohibition to provide financing or financial assistance related to the goods and technology referred to in paragraph 1 (Annex VII goods and technology) for any sale, supply, transfer or export of those goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly to any natural or legal person, entity or body in Russia, or for use in Russia. In essence, this Article prohibits the transfer of rights over scientific data to de-localise production of restricted chemicals to third countries, where those chemicals are intended for Russia.
24. Can I import substances from a legal person, entity or body that meets the criteria under letters (a)–(c) of Article 5aa(1) of Council Regulation (EU) No 833/2014, if that is necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers?
Last update: 9 December 2022
Yes. Council Regulation (EU) 2022/1269 of 21 July 2022 amended Council Regulation (EU) No 833/2014 to include an exemption under Article 5aa(3)(f) allowing transactions with legal persons, entities and bodies that meet the criteria under letters (a)–(c) of Article 5aa(1) provided that such transactions are necessary for the purchase, import or transport of pharmaceutical, medical, agricultural and food products, including wheat and fertilisers. This is under the condition that the underlying trade in goods is not otherwise restricted under Council Regulation (EU) No 833/2014 .
Since the provision in Article 5aa(3)(f) qualifies as an exemption, the importer or the OR is not required to obtain the authorisation of the NCA before importing the substance. However, if the substance is imported or used, even by distributors or downstream users, for other purposes than those contemplated under Article 5aa(3)(f), the importer or the OR can be considered liable for the infringement of Article 5aa by the NCA. It is for the importer or the OR to take the necessary actions in order to ensure that the uses by the distributors or downstream users are in line with the purposes indicated in Article 5aa(3)(f); this may include, among others, providing a notice/information to the latter notably on the scope of the uses permitted under Article 5aa(3)(f), including contractual arrangements in the relevant distribution agreements and having a monitoring/tracking system in place. Since Article 5aa(1) prohibits directly or indirectly engaging in any transaction with legal persons, entities and/or bodies that meet the criteria under letters (a)–(c), the relevant NCA can consider distributors or downstream users as in breach of such provision as well.
The importer or the OR should also take the necessary actions to ensure that its REACH registration is in line with the permitted uses (e.g. update the uses or discontinue the import of the substances for non-permitted uses and update the substance volume).
25. Are REACH registrations and authorisations economic resources to be reported to the NCA pursuant to Article 9(2) of Council Regulation (EU) No 269/2014?
Last update: 24 July 2024
Yes. Article 9(2) of Council Regulation (EU) No 269/2014 establishes that listed persons must report, before 1 September 2022 or within 6 weeks from the date of listing in Annex I, whichever is latest, funds or economic resources within the jurisdiction of a Member State belonging to, owned, held or controlled by them, to the competent authority of the Member State where those funds or economic resources are located and cooperate with the competent authority in any verification of such information. REACH registrations should be considered located in Finland, as held by ECHA in Helsinki. REACH Authorisations should be considered located in Belgium, as granted by the Commission. Listed persons and persons owned or controlled by them should therefore report them to the Finnish and Belgian National Competent Authority. The latter is to transmit that information to the Commission, as per Article 9(4).
26. Can I purchase substances from a company designated or owned/controlled under Council Regulation (EU) No 269/2014, or from a legal person, entity or a legal person, entity or body that meets the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014, if that company holds a REACH registration?
Last update: 9 December 2022
No. It is prohibited to provide funds or economic resources to designated persons, even indirectly, or engage in transactions with companies that meet the criteria under letters (a)–(c) of Article 5aa of Council Regulation (EU) No 833/2014. Exceptions might however apply (see also Question 24).
12. INTELLECTUAL PROPERTY RIGHTS
RELATED PROVISION: COUNCIL REGULATION 269/2014
A. General questions
1. Do EU sanctions provided for in Council Regulation (EU) No 269/2014 apply to intellectual property rights?
Last update: 8 September 2022
EU sanctions apply to intellectual property rights (e.g. trademarks, designs, patents, plant variety rights; collectively IPRs). Under Council Regulation (EU) No 269/2014, the EU has designated a number of individuals and legal persons as subject to sanctions.
Being a “designated person” means that all funds and economic resources, directly or indirectly belonging to, held or controlled by a designated person must be frozen. In practice, any EU legal and private person and EU Member State’s public institution doing business in the EU must prevent any transfer of, alteration of, access to, use of or other dealings with those funds or economic resources.
The freezing of economic resources of a designated person means that any asset of a designated person, whether tangible or intangible, cannot be used by anyone to obtain other funds or assets. IPRs can qualify as intangible ‘economic resources’. Hence, they are also subject to this restriction.
This means that public institutions (e.g. a trademark register) must not enable the use of IPRs of a designated person, or of a person owned or controlled by a designated person (e.g. no IPR property transfer should be registered).
EU sanctions also prohibit making further funds or economic resources available to designated persons or persons owned/controlled by them. By way of example, this means that in principle no further transactions with those persons are possible as of the moment of the application of the prohibition (e.g. payment of license fees for an IPR by an EU person to a designated person) (see however in this respect Question 5 and 8).
By the same token, EU economic operators should not make IPRs available to designated persons (e.g. by means of licensing agreements).
2. Should EU and Member State intellectual property offices suspend the registration or the registration of transfer of IPRs held by persons and entities designated under Annex I to Council Regulation (EU) 269/2014?
Last update: 21 March 2023
Economic resources of persons and entities designated under Annex I to Council Regulation (EU) 269/2014 (designated persons) must be frozen. The use of economic resources to obtain funds, goods or services in any way must be prevented. Moreover, it is prohibited to make available economic resources to or for the benefit of designated persons.
This means, inter alia, that EU and Member States intellectual property offices must not grant a new registration for an IPR, whose application has already been submitted before the designation, and they must not register transfers of already granted IPRs, if they belong to a designated person or entity or if they belong to persons owned or controlled by designated persons or entities. This is because, if the designated person/entity is deemed to own or control a non-designated entity, it can be presumed that the control also extends to the assets of that entity, and that any funds or economic resources made available to that entity would reach the designated person. The assessment of control is to be made on a case-by-case basis. See on this the FAQs on Russia sanctions concerning Asset freezes and the prohibition to make funds and economic resources available. See on this also FAQs, Section B. Individual Financial Measures. See also Question 3.
3. Should applications for registration of new IPRs by persons listed in Annex I to Council Regulation (EU) No 269/2014, or persons owned or controlled by them, be accepted by intellectual property offices?
Last update: 5 November 2024
No. Applications for registrations of new IPRs entail the creation of new rights for the benefit of the applicant. Hence, they qualify as making economic resources available to listed persons, or persons owned/controlled by them. As such, they should be rejected. See also Answer 20, part “Article 5s” of this section.
4. How can EU and Member States intellectual property offices verify whether an IPR applicant/owner, or a party in opposition or invalidity proceedings is designated under Annex I to Council Regulation 269/2014?
Last update: 8 September 2022
EU and Member States intellectual property offices are subject to the same obligations concerning compliance with sanctions than any other individual and legal persons that fall under the scope of application of Article 17, Council Regulation 269/2014.
In respect to what sanctions compliance entails, see this FAQs Section A.2. Circumvention and Due Diligence, in particular questions 1, 2 and 4. EU and Member State intellectual property offices should first and foremost verify the names of owners/applicants of IPR, as well as applicants in opposition or invalidity proceedings, against the entries in Annex I to Council Regulation 269/2014; a non-official consolidated list of those entries is also available on the EU sanctions map and in the financial sanctions database .
EU and Member State intellectual property offices should also ensure that owners and applicants of IPRs as well as applicants in opposition or invalidity proceedings are not owned or controlled by persons and entities in Annex I to Council Regulation 269/2014. In this case, EU and national Member State Offices should not rely solely on the information submitted by the IPR applicant/owner or party in the afore-said proceedings (see Section B.1 Asset freeze and prohibition to make funds and economic resources available). Rather, they should do further investigations in the public domain and in relevant registries (see this FAQs, Section A.2. Circumvention and Due Diligence, question 2).
EU and Member State intellectual property offices can also seek the advice and support of the relevant National Competent Authority (“NCA”) (e.g. the NCA in the Member State where the intellectual property office is based) when they are unable to verify whether a legal persons is owned or controlled by a designated person.
5. Should EU and Member State intellectual property offices remove from their online databases (e.g. TMView, DesignView, etc.) the entries of IPRs held by persons and entities designated under Annex I to Council Regulation (EU) 269/2014? If so, what would be the adequate cut-off date and should they remove from the databases IPRs of non-designated Russian or Belorussian persons?
Last update: 26 April 2022
The asset freeze and the prohibition to make funds available apply as of the date of entry into force of the Council Implementing Regulation including the person or entity in Annex I to Council Regulation 269/2014. Please note that the list in Annex I is a dynamic one; persons and entities are included and removed periodically. The updated list and the relevant date of entry into force can be consulted in the Annex I to the nonofficial consolidated versions of Council Regulation (EU) 269/2014 in the section Ukraine of the EU sanctions map, available at the following hyperlink: https://www.sanctionsmap.eu/
EU and Member States’ intellectual property offices can display a reference/sign/indication that a given Russian and Belorussian mark, related to Annex I designated persons and entities as well as person and entities owned or controlled by them, is frozen due to the EU sanctions. This means that a frozen mark should still be displayed in the online IPR databases used by EU and Member States’ intellectual property offices.
6. With regard to applications for IPR registration filed by designated persons or entities before the date of inclusion in Annex I to Council Regulation 269/2014, should EU and Member State intellectual property offices complete the examination phase and not register the IPR, or should the examination phase be suspended immediately? In the case of patents, can the search report and written opinion be forwarded to the applicant? In the case of trademarks, is it possible to publish trademark applications for the purpose of opposition proceedings?
Last update: 21 March 2023
Once the IPR applicant is identified as one of the sanctioned individuals or entities listed in Annex I of Council Regulation (EU) No 269/2014, all steps of the procedure of the examination should be immediately suspended to guarantee that no economic resources are made available to, or for the benefit or persons or entity and the type of IPR involved (patent, trademark, etc.).
This is to prevent that through an IPR application the designated individual or entity obtains funds or economic resources (goods or services or any other intangible asset). Patents search reports and written opinions must not be forwarded to the applicant. Publication of trademarks applications should be withheld as long as the applicant is designated or owned/controlled by a designated person. See also Question 3 regarding applications for IPRs filed after the person has been designated.
For already registered IP rights, EU and Member States’ intellectual property offices can display a reference/sign/indication that a given application by a designated person or entities as well as persons and entities owned or controlled by them, is frozen pursuant to the EU sanctions (see question 4).
7. Should EU and Member State intellectual property offices suspend requests from designated entities/persons for formal modifications, e.g., change of address of an IPR owner or change of name of its representative?
Last update: 8 September 2022
If such requests can be considered as use in the sense of Article 1(e) of Regulation (EU) No 269/2014, i.e. aiming at obtaining funds, goods or services, in any way, they should be suspended.
8. Should EU and Member State intellectual property office suspend the renewal of, invalidate or revoke registered IPRs owned or controlled by persons and entities designated under Annex I to Council Regulation (EU) 269/2014?
Last update: 21 March 2023
IPRs can be renewed, provided they remain frozen (see Question 1). They do not have to be invalidated or revoked, unless so required according to the procedures provided for in the EU or Member State law (e.g. cancellation procedure under Article 29 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 (EU Trademark Regulation). See also Question 8.
9. Could EU and Member State intellectual property offices continue to receive payments of fees from designated persons or entities or persons/entities owned or controlled by designated persons, with regard to suspended proceedings? Should renewal fees be accepted?
Last update: 8 September 2022
According to Article 2(1) of Council Regulation (EU) No 269/2014, all funds and economic resources of designated persons and entities must be frozen and no funds or economic resources can be made available to them or for their benefit.
However, Council Regulation (EU) No 269/2014 provides for exceptions to these obligations. For instance, NCAs are allowed to authorise the release of frozen funds or the provision of funds or economic resource if they are necessary to satisfy the basic needs of natural or legal persons (Article 4(1)(a)) or intended exclusively for payment of fees or service charges for routine holding or maintenance of economic resources (Articles 4(1)(c)).
In practice, the designated owner of an IPR could consider applying pursuant to the above provisions, if the conditions are met, to the relevant NCA, to allow the release of funds that have been frozen by a bank in a Member State to pay the renewal fees, and allow the EU or Member State IP office to register the renewal. In this context, it has to be noted that sanctions are not punitive; the purpose of sanctions is not to deprive the designated person of its rights. If an IPR is not renewed, the owner would lose its rights on it.
Hence, if the conditions are met and subject to the discretion of the NCA, a derogation under Article 4(1)(a) or (c), lodged for the purpose of renewing a frozen IPR appears legitimate. As noted, it is the person interested in the renewal that should apply for the derogation (i.e. the designated person).
The application should be filed with the NCA with which there are the closest links (e.g. the NCA in the Member State where the IP office is based). In the interest of the economy of the proceedings, in the same decision granting a derogation, the NCA could (i) authorise the bank in a Member State to release the frozen funds of the designated person necessary to pay the renewal fees and (ii) the EU or Member State IP office to renew the IPR.
10. How should EU and Member State intellectual property offices process requests for extension of deadlines from designated entities/persons?
Last update: 8 September 2022
Requests from designated entities/persons for extension of deadlines should only be accepted if the related procedure for which the extension is sought is necessary to preserve an IPR or an application for an IPR.
11. Does it make a difference whether the IPRs was applied for or registered on the basis of EU secondary law (e.g. Trade Mark Regulation) or through international agreements (e.g. Madrid trade mark registration system, European Patent Convention, Patent Cooperation Treaty)?
Last update: 26 April 2022
No, it does not make any difference. IPRs included in registers of EU and Member State intellectual property offices must be frozen.
12. How should an EU or Member State intellectual property office proceed in case a designated entity/person files an application for an international trademark (Madrid Protocol) through the International Bureau of the World Intellectual Property Organisation?
Last update: 5 November 2024
If the intellectual property office only freezes the proceedings with the application, then within 12 months (or within the extended period of 18 months) the trademark will become valid in its territory. As a result, the intellectual property office should refuse to grant protection within the time period applying under Art 5(2) of the Madrid Protocol. See also Answer 6, part “Article 5s” of this FAQs section.
13. Could frozen IPRs still be enforced before EU courts?
Last update: 8 September 2022
Enforcing IPRs before EU courts should be permitted, insofar as the judicial proceeding is necessary to preserve the right. Restrictions concerning the asset freeze and the prohibition to make funds available to designated persons remain applicable.
14. Could a designated persons or entity initiate, participate in or continue opposition/invalidity procedures, acting as applicant?
Last update: 21 March 2023
EU and Member States intellectual property offices should suspend the initiation of new opposition procedures by a designated person or entity, the participation therein or the continuation of pending opposition/invalidity proceeding, unless these proceedings are necessary to preserve an already granted right .
However, a distinction should be made between opposition and invalidity proceedings. EU and Member States intellectual property offices should not suspend the registration of the IPR of other than designated persons after the application has been filed and an opposition has been launched by a designated person; if, at the end of the timeframe for filing an opposition, the opposition procedure cannot be resumed (i.e. because the designated opponent has not be de-listed), the EU or Member States intellectual property office should proceed with the registration. This is because the non-designated applicant for an IPR registration should not bear the consequence of the designation of the opponent that would stem from keeping the registration of the IPR suspended until the opposition proceedings can be resumed.
Invalidity proceedings lodged by a designated person should remain suspended as long as the person is designated.
15. Could a designated person or entity defend its right against in opposition proceedings?
Last update: 8 September 2022
Defending an IPR against an opposition should be permitted, to the extent necessary to preserve the right. Restrictions concerning the asset freeze and the prohibition to make funds available to designated persons remain applicable. This for instance could apply in the case of patents, in which case opposition takes place once the registration is granted.
16. Would EU persons breach the obligations envisaged in Council Regulation (EU) 269/2014 if they continue paying renewal fees for trademarks, patents or other IPRs registered to the Russian and Belorussian intellectual property offices?
Last update: 26 April 2022
The restrictions provided for in Council Regulation (EU) 269/2014 only apply to persons and entities included in Annex I to Council Regulation 269/2014, as well persons and entities owned or controlled by them. As long as the Russian and Belorussian intellectual property offices are not designated and they are not controlled by a designated person, they are not subject to the restrictions provided for in Council Regulation (EU) 269/2014, in which case EU persons are allowed to continue paying renewal fees for trademarks, patents or other IPRs registered to the Russian and Belorussian intellectual property offices.
17. How should “payments” received by EU IP law firms to lodge/represent a Russian or Belorussian IPR’s owner be treated? Does it make a difference if the IPR’s owner is designated under Annex I to Council Regulation (EU) 269/2014? Should the EU and Member State intellectual property office refuse fee payments for registration or renewal?
Last update: 21 March 2023
Council Regulation (EU) No 269/2014 prohibits EU operators from making any funds or economic resources available to persons designated under Annex I to it, directly or indirectly. In principle, and by way of example, an EU business is not allowed to sell or deliver products or services to those persons, even if in exchange for adequate payment. There are a number of exceptions (derogations) to this prohibition, including for prior contracts where a payment by a listed person is due under a contract or agreement concluded, or an obligation that arose before the date on which that person was included in Annex I, and provided that the funds or economic resources will be used for a payment by the designated person and that the payment is not made to or for the benefit of a designated person (Article 6). However, this is subject to prior authorisation by the relevant national competent authority. The contact details of Member State competent authorities are included in Annex I to Council Regulation No 269/2014.
As already mentioned, in principle persons non-designated or non-owned/controlled by designated persons are not subject to asset freeze restrictions. However, the Russian government and legal persons established in Russia are subject to relevant sectoral restrictions. Article 5n(1) of Council Regulation 833/2014, which was introduced on 3 June 2022 , prohibits, inter alia, the provision, directly or indirectly, of business and management consulting services to legal persons, entities or bodies established in Russia. According to the answer to Question 1, Section G.8 (provision of services) of this Russia sanctions FAQs, such prohibition covers management consulting, guidance and operational assistance services provided to businesses for business policy and strategy and the overall planning, market management and project management consulting, advisory. It is for the economic operator to assess, on a case-by-case basis, if its representation services fall within the scope of the restriction. If that is the case, the EU representative of legal persons, entities or bodies established in Russia should discontinue its services. Since sanctions enforcement is part of the remit of Member States, economic operators can seek further guidance on their specific case to National Competent Authorities.
18. Is the provision of legal advisory services to Russian companies for the purpose of assisting in administrative or judiciary court proceedings on IPRs permitted pursuant to Article 5n(6) of Council Regulation (EU) 833/2014?
Last update: 21 March 2023
The provision of legal advisory services to Russian companies is permitted under Article 5n(6) of Council Regulation (EU) 833/2014 if this is strictly necessary to ensure the access to judicial proceedings, as well as administrative proceedings such as those initiated or pending before the EUIPO, EPO or Member States’ Intellectual Property Offices, under the conditions indicated in this Section and Section G.8, Provision of Services.
19. Is the sale, licensing or transfer in any other way of IPRs or trade secrets as well as granting rights to access or re-use any material or information protected by means of IPRs or constituting trade secrets allowed for the use in relation to goods or technology that are subject to certain restrictions under Council Regulation 833/2014?
Last update: 6 July 2023
No, unless an exception applies. Articles 2(2)(c), 2a(2)(c), 2aa(2)(c), 3(2)(c), 3b(2)(c), 3c(4)(c), 3f(2)(c), 3h(2)(c) and 3k(2)(c) of Council Regulation 833/2014 prohibit the sale, licensing or transfer in any other way of IPRs or trade secrets as well as granting rights to access or re-use any material or information protected by means of IPRs or constituting trade secrets, if used in relation to goods and technology referred to in those Articles.
These restrictions apply irrespective of whether the IPR or the trade secret is registered before an intellectual property office in the EU, in a Member State or in a third country or otherwise protected under EU law, a Member State’s law or a third country’s law. This is because the sale, licensing or transfer in any other way, as well as the granting of rights to access or re-use per se is prohibited.
Similarly, the above also applies in cases of IPRs or trade secrets being sold, licensed or transferred in any other way, as well as rights being granted access or re-use them outside the territory of the EU or being granted to a person who is not required to comply with Council Regulation 833/2014 as per Article 1375, whenever that is related to the relevant goods and technology and to the provision, manufacture, maintenance and use of those goods and technology, directly or indirectly to any natural or legal person, entity or body in Russia or for use in Russia.
By way of example, the restrictions at hand encompass the following situations:
- selling trade marks or patents7 as well as sharing a trade secret with a third country operator while knowing, suspecting or accepting the risk that those IPRs or trade secrets will be used to manufacture restricted goods destined for Russia or to be affixed on restricted technology or goods that will be exported to Russia;
- granting access to data covered by copyright to obtain regulatory registrations or any other licenses, including in third countries, to manufacture restricted technology or goods which will be used in Russia .
The terms ‘intellectual property rights’ in Articles 2(2)(c), 2a(2)(c), 2aa(2)(c), 3(2)(c), 3b(2)(c), 3c(4)(c), 3f(2)(c), 3h(2)(c), 3k(2)(c), Council Regulation 833/2014 must be understood in a broad sense, in particular encompassing trademarks, designs, patents, copyrights, or utility models.
The terms ‘trade secrets’ in Articles 2(2)(c), 2a(2)(c), 2aa(2)(c), 3(2)(c), 3b(2)(c), 3c(4)(c), 3f(2)(c), 3h(2)(c), 3k(2)(c) of Council Regulation 833/2014 must be understood as per the definition of Article 2(1) of Directive (EU) 2016/943. In essence, trade secrets are valuable pieces of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage because it is secret. That includes a wide range of know-how and business information, such as early-stage inventions, manufacturing processes, precise tonnages manufactured, links between manufacturers or importers and their distributors or downstream users including lists of suppliers and clients, the precise use, function or application of a chemical, details of full compositions of mixtures (recipes or chemical compounds), insofar as the criteria of Article 2(1) of Directive (EU) 2016/943 are met.
Subsidiaries of EU parent companies incorporated under the law of a third country are not bound by the restriction at hand. However, EU parent companies cannot use those subsidiaries to circumvent the obligations that apply to the EU parent, for instance by transferring IPRs to them so that they can transfer them in violation of the aforementioned provisions.
Last, it is to be noted that Article 10 of Council Regulation 833/2014 establishes that actions by natural or legal persons, entities or bodies shall not give rise to liability of any kind on their part, if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in that Regulation.
20. What is the responsibility of a person required to comply with Articles 2(2)(c), 2a(2)(c), 2aa(2)(c), 3(2)(c), 3b(2)(c), 3c(4)(c), 3f(2)(c), 3h(2)(c), 3k(2)(c) of Council Regulation 833/2014 if the buyer, the licensee or the person that whatsoever benefits from/received the relevant IPRs or trade secrets, uses them on goods or technology in breach of Council Regulation (EU) 833/2014?
Last update: 6 July 2023
According to Answer to Q.24, Section D.2 of the Russia Sanctions FAQs “it is for the EU Company to ensure that the provision of services in question is not related to the sanctioned good or to the provision, manufacture, maintenance and use of this sanctioned good.”
In the event that a company required to comply with Council Regulation (EU) 833/2014 as per Article 13 thereof (‘obliged person’), sells, licenses or transfers in any other way IPRs or trade secrets, or grants rights to access or re-use any material or information protected by means of IPRs or constituting trade secrets to a person, including in a third country, that uses them in relation to goods or technology sold, transferred, exported or supplied in breach of Council Regulation (EU) 833/2014, the relevant NCA should assess the company’s responsibility in lights of Article 10 of Council Regulation (EU) 833/2014, whereby actions by natural or legal persons, entities or bodies shall not give rise to liability of any kind on their part if they did not know, and had no reasonable cause to suspect, that their actions would infringe the measures set out in this Regulation. This entails that the obliged person has to take appropriate actions to ensure that the buyer, the licensee or the persons that whatsoever benefits from/received the relevant IPRs or trade secrets will not use them in relation to the restricted goods or technology for prohibited actions. This may include contractual arrangements, verifications on the use of the IPRs or trade secrets by the licensee, investigations and due diligence on the reliability of the latter (including online). It is for the obliged person to assess whether and what type of due diligence is necessary on the basis of the risk assessment and risk management (e.g. high risk or low risk that the licensee might, willingly or negligently use the IPRs or trade secrets in breach of Council Regulation (EU) 833/2014). The obliged person must also comply with Article 12 of Council Regulation (EU) No 833/2014, which provides that it is prohibited to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions of that Regulation. See also section A.2 of these FAQs, Circumvention and Due Diligence.
21. What is the impact of Article 5aa of Council Regulation 833/2014 on IPRs and IPR holders?
Last update: 21 March 2023
First and foremost, see in this respect Section G.5 of these Russia Sanctions FAQs. Article 5aa prohibits to directly or indirectly engage in any transaction with:
- a legal person, entity or body established in Russia, which is publicly controlled or with over 50 % public ownership, or in which Russia, its Government or Central Bank has the right to participate in profits, or with which Russia, its Government or Central Bank has other substantial economic relationship, as listed in Annex XIX;
- a legal person, entity or body established outside the Union whose proprietary rights are directly or indirectly owned for more than 50 % by an entity listed in Annex XIX; or
- a legal person, entity or body acting on behalf or at the direction of an entity referred to in point (a) or (b) of this paragraph.
The term transactions must be interpreted broadly and encompasses the prohibition to engage in any trade with the targeted persons, such as paying licensing fees and grant new or renewal of licences of IPRs. It also prohibits for intellectual property offices to accept new applications, register transfer of property or licenses, register new IPRs, accept any applications for cancellation or opposition.
22. Can applications for Geographical Indications (GIs) be granted if one or more applicants are designated under Annex I to Council Regulation (EU) No 269/2014 or owned/controlled by them?
Last update: 21 March 2023
No. As confirmed by the Court’s recent case law (judgment of 14 July 2022, Commission v Denmark, Case C-159/20, ECLI:EU:C:2022:561, paragraph 54), protected designations of origin (PDOs) and protected geographical indications (PGIs) are protected as an intellectual property right by the relevant EU legislation, according to which a scheme for PDOs and PGIs is established in order to help producers of products linked to a geographical area by ensuring uniform protection of the names as an intellectual property right in the territory of the European Union.
The Advocate General has clarified that geographical names (PDOs and PGIs) are industrial property rights, even if they are covered by sui generis rules, of which the public-law aspects prevail over the private-law aspects; he also added that GIs confer exclusive rights on the proprietor, even if not individual (Opinion of 17 September 2020, Syndicat interprofessionnel de défense du fromage Morbier V Société Fromagère du Livradois SAS, Case C-490/19, ECLI:EU:C:2020:730, paragraph 29).
It follows from that that even if GIs are linked to a specific geographic area rather than a producer, a successful GI application would bring about an economic advantage and financial benefit to the person or entity applying for it.
This would thus violate the prohibition to make funds and economic resources available, directly or indirectly, to or for the benefit of designated natural or legal persons, entities or bodies, or those associated with them, as specified in Article 2(2) of Council Regulation (EU) No 269/2014.
Hence, GI applied for by persons designated in Annex I to Council Regulation (EU) No 269/2014 cannot be granted. In this vein, pending applications in that case should be frozen (e.g. suspended).
B. Article 5s of Council Regulation (EU) 833/2014
B.1 Overview
1. What does the obligation enshrined in Article 5s of Council Regulation (EU) 833/2014 entail?
Last update: 5 November 2024
In essence, Article 5s(1)(a) and (b) of Council Regulation (EU) 833/2014, as introduced by Council Regulation (EU) 2024/1745 of 24 June 2024 (i.e. fourteenth package of the Russia sanctions, hereinafter ‘Article 5s’) requires the Commission, the European Union Intellectual Property Office (‘EUIPO’) and Member States Intellectual Property Offices (‘NIPOs’) to not accept new applications for registration, or any requests or submission filed during the registration procedure of certain Intellectual Property Rights (IPRs), if the applicant or requestor is a Russian legal or natural person or is a natural person resident in Russia (‘Target Person’). Certain persons are exempted from this restriction, as defined in Article 5s(5). Not accepting applications, requests, submissions does not entail the obligation to issue a formal decision of refusal. The applicant or requestor can re-submit the application, request or submission should Article 5s be repealed .
2. Why has the European Union adopted Article 5s?
Last update: 5 November 2024
This new obligation comes in response to the illegitimate actions undertaken by the Russian Government and courts to deprive Member State intellectual property rights holders of their protection in Russia, which has resulted in an undue competitive advantage for the Russian industry and contributed to Russia’s revenues, further enabling it to wage its war of aggression in Ukraine .
In particular, first, on 6 March 2022 Russia amended Article 1360 of the Russian Civil Code to enable its authorities to license patents of Union companies to Russian businesses, without the obligation to compensate the former. This means that Russian companies can infringe patents and related IPRs of Union companies without consequences.
Second, on 29 March 2022 Russia introduced a parallel import mechanism to allow its companies to procure certain goods and services from other third country markets without the consent of the Union trademark holder. Concerned goods are mostly those in short supply in Russia due to the exit of Union companies from the market or sanctions. The Russian Government claimed that this mechanism should have been made permanent .
Third, Russia recently adopted legislation whereby transactions concerning certain IPRs of Union companies in Russia need to be authorised by the Russia Government, which may entail de facto prohibition of Union companies e.g., from reshoring industrial knowhow.
Fourth, it is known that Russian courts have illegitimately deprived protection of IPR holders from the Union .
3. What does Article 5s entail for Member State businesses?
Last update: 5 November 2024
In principle, Article 5s does not require businesses to undertake specific actions. The prohibition laid down in Article 5s is to be implemented first and foremost by the Commission, EUIPO and NIPOs (see Question 1). However, businesses have to consider the implications of the measures imposed by Article 5s, as explained hereinafter.
4. What IPRs are covered by the ban under Article 5s?
Last update: 5 November 2024
The following IPRs are to be considered covered by Article 5s(1)
- New applications for patents, such as:
o national patent applications;
o European patent applications filed with the national offices of an EU
Member State, if any (Article 75(1)(b) of the European Patent Convention
(‘EPC’)); o Patent Convention Treaty (PCT) applications filed before national offices of EU Member States;
o European patent applications filed before the EPO (should Article 5s(3) be implemented)
o PCT applications filed before the European Patent Office (‘EPO’), in accordance with Article 5s(4) implementation;
o PCT applications entering the regional phase before the EPO, in accordance with Article 5s(4) implementation), or the national phase before a NIPO and
o PCT applications filed at WIPO (IB) (should para 4 of Article 5s be implemented).
- New applications for trademarks, such as:
o national trademark applications before a NIPO; o EU trademark applications; o Madrid applications filed before a NIPO; o Madrid applications filed before the EUIPO;
o Madrid applications that enter the national or regional phase; o Madrid applications filed at WIPO (IB) (should para 4 of Article 5s be implemented).
- New applications for industrial designs, such as:
o national trademark applications before a NIPO; o EU design applications;
o Hague applications filed before a national office; o Hague applications filed before the EUIPO;
o Hague applications that enter the national or regional phase; o New Hague applications filed at WIPO (IB) (should para 4 of Article 5s be implemented).
- New applications for registration of geographical indications, such as:
o Applications for registration in the EU concerning protected designations of origin (PDO), protected geographical indications (PGI), geographical indications (GI);
o Registrations of appellations of origin and geographical indications under the Geneva Act notified by WIPO (IB) to the Commission.
5. In practice, what does it mean that the EUIPO and NIPOs will not accept new applications and requests based on Article 5s?
Last update: 5 November 2024
IPOs should identify new applications, requests and submissions submitted by the Target Persons, including when filed or submitted by joint applicants, and not process them (see Question 19 of this Part of this FAQs section for joint applications). Applicants and requestors should not expect to receive a registration number (i.e. filing number and filing date) as their application(s), request(s) and submission(s) will be treated as if they had not been filed. No priority right would thus be generated by the NIPO (even if internal reference numbers may be allocated).
Requests and submissions submitted by a Target Person during the registration procedure relating to a non-Target Person’s application or requests (e.g. IPRs filed by a nonRussian person) should be deemed as if they had not been filed, so the registration procedure will continue. The EUIPO and NIPOs can accept requests by Target Persons in the interest of third parties (e.g. request of a Target Person to withdraw an existing opposition) as well as requests of abandoning their own registration.
Requests filed after 24 June 2024 (‘Entry into force of Article 5s’) by Target Persons in relation to their own applications that were filed before that date are suspended. In these situations, the EUIPO and NIPOs may stay the proceedings. The same applies in case the request/submission intends to remedy a deficiency notified by the EUIPO and NIPOs, where failing to remedy a deficiency within a deadline would otherwise lead to rejection, or in case a request is filed for a European patent validation, but a document is missing or a formal deficiency needs to be remedied, and such a document or correction is submitted to the NIPO after the Entry into force of Article 5s. New requests related to pending application for registrations of designations of origin (PDO), protected geographical indications (PGI), geographical indications (GI) should also be suspended.
The EUIPO and NIPOs should send a message or communication to the applicant or requestor with regards to all newly filed relevant IP rights applications and requests/submissions, informing them that the application/request/submission will not be processed by virtue of Article 5s, and that no filing number and filing date will be accorded. Such message or communication should not entail a final or provisional refusal. Applicants should be allowed to file their applications again if Article 5s is repealed.
6. What is the procedure in case of international trademark applications, industrial design or geographical indications’ applications?
Last update: 5 November 2024
As regards Madrid applications for trademarks entering the national or regional phase, NIPOs and the EUIPO are expected to issue a provisional refusal for international trademarks entering the national or regional phase and notify the WIPO (IB) within the deadline about that provisional refusal, thereby the Madrid application will not become effective in the relevant Member States or the EU. After the provisional refusal, if an applicant does not show falling under an exemption, NIPOs and the EUIPO may issue a final refusal decision as per the Madrid Agreement.
As regards Hague applications for designs entering the national or regional phase, NIPOs and the EUIPO are expected to issue refusals of effects of international registrations pursuant to the applicable rules of the Hague System (unless the applicant can show falling under an exemption) and send a notification to the WIPO (IB) within the deadline about the refusal thereby the Hague application will not become effective in the relevant Member States or the EU.
The same also applies with regard to refusals of effects of international registrations pursuant to Article 15 of the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indication in respect of application for internation registration of Appellations of Origin and Geographical Indication.
The above applies where the notification date to the EUIPO or the NIPO is after the of Entry into force of Article 5s, irrespective when the application was filed to WIPO (IB). The EUIPO and NIPOs may decide not to publish an international application which will be provisionally refused or refused afterwards as per the above procedures.
7. Can a NIPO process a request for the validation of a European patent in the respective Member State, given that such a request is filed after the EPO has granted the European patent?
Last update: 5 November 2024
No, NIPOs should not process requests for validation of a European patent in the respective Member States, as required by Article 5s(1)(b), since the wording ‘during the registration procedures’ also includes the national validation procedure. In case documents are missing or a formal deficiency needs to be remedied in a pending request for validation, and such a document or correction is submitted after the Entry into force of Article 5s, such submission should not be accepted and the proceeding should be suspended.
8. Which requests and submissions are covered by Article 5s(1)(b)?
Last update: 5 November 2024
Article 5s(1)(b) encompasses only requests and submissions filed by Target Persons during the registration procedure (i.e. from the filing of the application until the IPR becomes effective in the designated Member State or in the Union), including if they are either related to a non-Target Person’s application or request or to the own application (or request) of a Target Person. The prohibited requests submitted by the Target Person can also be related to an application or request that was filed before the Entry into force of Article 5s. Examples of such requests filed by Target Persons include requests to amend pending applications, oppositions against pending applications, notices of comment or requests for supplementary information.
Requests/submissions filed after the registration procedure has been finalised and the IPR has become effective are not subject to a restriction and can be accepted. Irrespective of the time of the filing, requests and submissions filed by non-Target Person are not covered by the restriction either, unless the EUIPO or the NIPO suspects circumvention (see Question 21 of this Part of this FAQs section). The ‘non-acceptance’ of requests/submissions under Article 5(1)(b) applies even if they intend to remedy a deficiency notified by the EUIPO or a NIPO to an applicant (see Question 7 of this Part of this FAQs section).
In relation to patents, the following requests/submissions filed by Target Persons are covered by Article 5s(1)(b):
- requests or submissions in respect of national patent applications (e.g. request for examination, procedural requests, third party observations);
- requests for conversion of European patent applications into Member State applications in accordance with Article 135 EPC;
- new validation requests, in EU MSs, of European patents.
Examples of requests and submissions filed by the Target Person that relate to their own applications or requests filed before the Entry into force of Article 5s in the area or trademarks and designs include:
- request to restrict, amend or divide a trademark application, requests for recordal of licences in respect of applications, procedural requests (e.g. restitutio/continuation of proceedings/extension time limits/suspension), deferment of publications.
Examples of requests and submissions filed by Target Persons that relate to non-Target Person’s applications or requests in the area or trademarks and designs include:
- filing of oppositions and of third-party observations.
9. Will Target Persons be allowed to use their signs, product designs and innovations which will not be protected by intellectual property in the EU?
Last update: 5 November 2024
Yes. Article 5s does not prohibit Target Persons to use their signs, product designs and innovations in the Union (provided such use is not prohibited). However, Target Persons will not be able to prevent EU companies or persons to use those signs, product designs and innovations in the EU as they will not become a trademark, industrial design, utility mode or patent in the EU and accordingly those signs, product designs and innovations will not enjoy IP protection.
B.2 Procedural aspects
10. Is there a transitional period?
Last update: 5 November 2024
No. Article 5s entered into force on the day after its publication in the Official Journal of the European Union i.e., on 25 June 2024.
11. What happens to applications of Target Persons which were filed before the Entry into force of Article 5s, where by such date all the procedural steps are concluded (i.e. no more requests or submissions are needed) and just the final decision has not been taken yet by the EUIPO or the NIPO?
Last update: 5 November 2024
While Article 5s only requires that new applications, requests and submissions must not be accepted, the EUIPO and NIPOs may also decide to stay/suspend the processing of an already pending relevant IPR application, especially with a view to avoiding its rejection, in a situation when the non-acceptance by a NIPO of new requests/submissions from an applicant might lead to the rejection of the related application (e.g. because there are procedural deadlines for submitting certain requests). In other words, EUIPO and NIPOs can stay the proceedings instead of issuing a final refusal. Proceedings cannot be stayed for new applications filed by Target Persons. Proceedings where all procedural steps were taken before the Entry into force of Article 5s should be concluded with the corresponding decision.
12. What happens to IPRs of Target Persons which were registered before the Entry into force of Article 5s?
Last update: 5 November 2024
Those IPRs are preserved and requests/submissions in that regard can be accepted and processed. In particular, Article 5s does not impact the maintenance and renewal of the existing intellectual property rights. Only new applications for registration, and new requests or submissions filed during the registration procedure, are covered by the restriction.
The registration procedure should be considered to last from the filing of the application until the IPRs right becomes effective. However, European patent validation requests filed after the Entry into force of Article 5s are subject to the prohibition under Article 5s, because they are filed before the patent becomes effective, even if the related European patent application was filed before the Entry into force of Article 5s. A request to record the details of a transfer of ownership after the registration procedure is not covered by Article 5s, hence it should be accepted even if filed by a Target Person after the Entry into force of Article 5s.
13. If the Target Person fails to pay the maintenance fee in respect of an application pending on or filed after the Entry into force of Article 5s for an IPRs indicated in Article 5s, can such person requests the re-establishment of rights by the Member State IPO or EUIPO?
Last update: 5 November 2024
Any request which falls under the scope of Article 5(1)(b) (including requests for the reestablishment of rights) should not be accepted. However, requests not falling under this provision - e.g. those that were made after the end of registration procedure - can be accepted.
14. Can EUIPO and NIPOs accept fees for applications or requests?
Last update: 5 November 2024
The EUIPO and NIPOs are advised to send a notification to Targeted Persons, when they file a new application or request/submission, to clarify that they should refrain from paying any fees (e.g. filing fee) related to new applications, or to requests/submissions during the registration procedures related to Non-Target Person’s applications or requests (which does not include e.g. post-grant renewal procedures). Should Target Persons nevertheless pay such fees, they should be reimbursed. As regards requests/submissions related to the own pending application or request of a Target Person, since these procedures are suspended, the related fee may be accepted by NIPOs and the EUIPO.
B.3 Invalidity
15. Are invalidity requests filed by persons targeted in Article 5s(1)(a) and (b) covered by Article 5s?
Last update: 5 November 2024
Invalidity requests filed after the registration procedure are allowed, since Article 5(1)(b) covers only those requests and submissions which are filed during the registration procedure.
16. Are invalidity requests filed by third parties relating to an IPR held by a Target Person covered?
Last update: 5 November 2024
Such invalidity requests are not covered by Article 5s, because they are not filed during the registration procedure. Requests filed by third parties are not covered either, not even those filed during the registration procedure, because only requests filed by Target Person are covered. Therefore, they are allowed.
B.4 Information requirements
17. Will Target and non-Target Persons have to submit information about their nationality and address for their application or requester, after the Entry into force of Article 5s?
Last update: 5 November 2024
Yes. The Commission, EUIPO and NIPOs will request the necessary information to ensure that the applicant or requestor is not a Target Person, and not accept applications and requests if the necessary information not provided. This applies also where the Commission, EUIPO and NIPOs did not require natural person applicants to indicate their nationality until the entry into force of Article 5s.
The Commission, NIPOs and the EUIPO may develop an IT solution to pre-check, prefilter so that the applications filed by the Target Persons will not be able to enter the IT system and therefore those applications will not be considered filed.
In particular, applicants and requestors that are natural persons should provide the requested information concerning their nationality, as well as their temporary or permanent residence permit in a Member State, in a country member of the European Economic Area or in Switzerland.
A person whose application or request was not accepted because it has not provided the afore-said information can re-submit the application or request, with the necessary information.
NIPO and the EUIPO are also entitled to request the necessary information and proof in case in the case of national phase or EU phase entries of Madrid and Hague applications, including on the residence of the applicant, and in case it is not provided, the application should be provisionally refused until this information and the proof are not submitted. In the case of national phase entries of PCT applications, the nationality is known to the NIPOs.
B.5 Exemptions
18. Which persons are exempted from Article 5s(1)?
Last update: 5 November 2024
Natural persons holding either a Member State, EEA country or Swiss nationality together with the Russian nationality, irrespective of their residence, are exempted from Article 5s(1) as per Article 5s(5) (e.g. a Member State-Russian national living in either Member State, Russia or another third county). Other dual nationals are not exempted under Article 5s(5) e.g. persons holding a nationality other than EU/EEA/Swiss in addition to the Russian nationality. Russian natural persons that have a permanent or temporary residence permit in the EU/EEA/Switzerland are exempted from the application of Article 5s(1).
19. Are joint applications Target Person together with a non-Target Person covered by Article 5s?
Last update: 5 November 2024
Yes, applications filed jointly by a Target Persons with a non-Target persons or an exempted Target Persons should not be accepted. The non-Target persons or exempted Target Persons can submit again the application without the Target Person. This also applies to applications filed under the Madrid and Hague system.
B.6 Others
20. What is the interplay between the asset freeze under Council Regulation (EU) 269/2014 and Article 5s?
Last update: 5 November 2024
Council Regulation (EU) 269/2014 and Council Regulation 833/2014 apply independently. Restrictions in the two regulations must be equally complied with. See also Question 3 of Part “General questions” of this FAQs section on the case of an application filed by a person listed in Annex I to Council Regulation (EU) No 269/2014, or persons owned or controlled by them that is also a person targeted in Article 5s(1) of Council Regulation 833/2014.
21. What is the relevance of Article 12 of Council Regulation (EU) 833/2014 (anti-circumvention provision) in relation to Article 5s?
Article 12 of Council Regulation (EU) 833/2014 prohibits Union persons to participate, knowingly and intentionally, in activities the object or effect of which is to circumvent prohibitions in such Regulation. NIPOs should remain therefore vigilant that a Target Person, is not circumventing the restriction by making use of formally legal avenues (e.g. using a middle person with Member State citizenship; transferring an application filed before the Entry into force of Article 5s to a non-Russian subsidiary with the aim that subsequent requests/submissions would be accepted). In cases where an application/request/submission is filed in violation of Article 12, Article 5s still applies and the EUIPO and the NIPOs should not process the application and pass the information to the sanctions NCA for enforcement against the circumventers, including the person that is required to comply with EU law (e.g. the middle persons) as well as the Commission, as per Article 6b(1) of Council Regulation (EU) 833/2014.
Article 5s does not cover companies in the Union that are owned or controlled by Target Persons. However, those entities cannot be used to circumvent Article 5s (e.g. when the subsidiary in the Union of companies established in Russia applies for a trademark in the interest of its parent company).
22. Can the applicants whose applications or requests were not accepted appeal or seek judicial or administrative redress?
Last update: 5 November 2024
The applications are deemed as if they had not been filed. EU sanctions are without prejudice to rights of the parties to seek judicial or administrative redress against decisions or against failure to act by the intellectual property authorities.
23. Should applications be assessed which were filed by legal persons established outside Russia but where the beneficial owner is a Russian national?
Last update: 5 November 2024
While in principle these applications are not covered by the restriction under Article 5s, please see Q. 21 of this Part of this FAQs section on circumvention.
13. MEDICINES AND MEDICAL DEVICES
RELEVANT PROVISION: ARTICLES 2, 2a, 3k, 3l, 3ea, 5aa of COUNCIL REGULATION 833/2014
1. Do EU economic operators or economic operators doing business in the EU have to comply with Council Regulation (EU) 833/2014 when providing medicinal products, medical devices and certain related assistance and services to natural or legal persons, entity or body in Russia or for use in Russia?
Last update: 29 July 2022
Yes, EU economic operators or economic operators doing business in the EU must comply with Council Regulation (EU) 833/2014, including when exporting medicinal products or medical devices to Russia. Pursuant to Article 13 of Council Regulation (EU) No 833/2014, EU sanctions apply, among others, within the territory of the Union, to any person inside or outside the territory of the Union who is a national of a Member State, to any legal person, entity or body, inside or outside the territory of the Union, which is incorporated or constituted under the law of a Member State and to any legal person, entity or body in respect of any business done in whole or in part within the Union.
This also includes subsidiaries in the EU of Russian parent companies. Russian subsidiaries of EU parent companies are incorporated under Russian law, not under the law of a Member State, hence they are not bound by the measures in Council Regulation (EU) No 833/2014. However, EU parent companies cannot use their Russian subsidiaries to circumvent the obligations that apply to the EU parent, for instance by delegating to them decisions which run counter the sanctions, or by approving such decisions through the Russian subsidiary.
2. What are the most relevant restrictions under Council Regulation (EU) No 833/2014 that EU economic operators or economic operators doing business in the EU should be aware of when providing medicinal products, medical devices and certain related assistance and services to natural or legal persons, entity or body in Russia or for use in Russia?
Last update: 29 July 2022
While all restrictions under Council Regulation (EU) No 833/2014 must be complied with by EU economic operators or economic operators doing business in the EU, the economic operators indicated in the question should pay particular attention to the following restrictions.
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Article 2 |
Restriction on sale, supply, transfer or export of dual-use goods and technology to any natural or legal person, entity or body in Russia or for use in Russia, or related provision of certain assistance and services.
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Article 2a |
Restriction on sale, supply, transfer or export of goods and technology in Annex VII to any natural or legal person, entity or body in Russia or for use in Russia, or related provision of certain assistance and services. |
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Article 3k |
Restriction on sale, supply, transfer or export of the goods in Annex XXIII to any natural or legal person, entity or body in Russia or for use in Russia, or related provision of certain assistance and services.
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Article 3l |
Restriction on transport of goods within the territory of the Union by a road transport undertaking established in Russia, including in transit.
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Article 3ea |
Restriction on vessels registered under the flag of Russia to access EU ports.
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Article 5aa |
Restriction to directly or indirectly engage in transactions with the entities referred to in Article 5aa.
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This list is not exhaustive. It is an obligation on EU economic operators or economic operators doing business in the EU to verify which restrictions are relevant for their business and comply with them. To do that, they can seek guidance from their national competent authority (NCA).
3. Are there exceptions to restrictions under Council Regulation No 833/2014 for providing medicinal products, medical devices and certain related assistance and services to natural or legal persons, entity or body in Russia or for use in Russia?
Last update: 29 July 2022
Yes. Council Regulation 833/2014 includes a number of exceptions that can be relevant for those actions. Exceptions encompass ‘exemptions’ and ‘derogations’ (authorisations)85. The exceptions provided in Council Regulation No 833/2014 include the following:
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Medical or pharmaceutical purposes
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Article 2(3)(b):
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Exemption for the sale, supply, transfer or export of dual-use goods and technology , or related provision of certain assistance and services, for non-military use and for a non-military end user, intended for medical or pharmaceutical purposes. This exemption does not apply where the end-user is a person, entity or body listed in Annex IV.
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Article 2a(3)(b): |
Exemption for the sale, supply, transfer or export of the goods and technology in Annex VII , or related provision of certain assistance and services, for non-military use and for a non-military end-user, intended for medical or pharmaceutical purposes. This exemption does not apply where the end-user is a person, entity or body listed in Annex IV.
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Article 3k(5)(a):
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Authorisation for the sale, supply, transfer or export of the goods in Annex XXIII, or related provision of certain assistance and services, intended for medical or pharmaceutical purposes, unless the NCA has reasonable grounds to believe that the goods might have a military enduse. |
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Pharmaceutical and medical products
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Article 3l(4)(b): |
Authorisation for the transport of goods within the territory of the Union by a road transport undertaking established in Russia after having determined that such transport is necessary for the purchase, import or transport of pharmaceutical and medical products , whose import, purchase and transport is allowed under Council Regulation No 833/2014.
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Article 3ea(5)(b) |
Authorisation for a vessel to access a EU port after having determined that the access is necessary for the purchase, import or transport of pharmaceutical and medical products , whose import, purchase and transport is allowed under Council Regulation No 833/2014.
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Article 5aa(3)(f):
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Exemption for transactions which are necessary for the purchase, import or transport of pharmaceutical and medical products, whose import, purchase and transport is allowed under this Regulation, as well as humanitarian purposes. |
4. Is there a definition of ‘medical’ or pharmaceutical purposes’ as per the exceptions under Article 2(3)(b), Article 2a(3)(b), Article 3k(5)(a)?
Last update: 1 February 2023 EU sanctions do not include a definition of ‘medical’ or ‘pharmaceutical purposes’. It is for economic operator to assess, and prove, if the goods and technology under Article 2 and Article 2a are sold, supplied, transferred or exported to, or the related assistance and services are provided for, a person, entity or body in Russia or for use in Russia for those purposes. The economic operator retains responsibility in case the exported goods and technology are not used for such purposes.
In the case of Article 3k(5)(a), it is for the NCA to assess, on a case-by-case basis, if goods are sold, supplied, transferred or exported to, or the related assistance and services is provided for, a person, entity or body in Russia or for use in Russia for those purposes. This assessment should be conducted on the basis of the information submitted in the request for derogation by the economic operator and on the basis of the NCA knowledge. The recipient of an authorisation retains responsibility for complying with the terms and conditions in the derogation.
It must be recalled that exceptions should be applied narrowly in order not to undermine the goal of EU sanctions (see Point 3.8. Humanitarian exceptions, Commission Guidance Note on the provision of humanitarian aid in compliance with EU restrictive measures (sanctions))86. Economic operators can seek guidance from their NCA.
This said, the categories of ‘medical’ or ‘pharmaceutical purposes’ should encompass, first and foremost, trade in goods and technology that fall under the scope of application of the following EU legislation:
- Regulation (EU) 2017/745 (Medical Devices Regulation) and Regulation (EU) 2017/746 (In Vitro Diagnostic Devices);
- Directive 2001/83/EC (Directive on medicinal products for human use).
Subject to the assessment of the NCA and provided that the applicant has solid evidence in relation to the medical or pharmaceutical purposes of the action, the exceptions at hand may include:
- spare parts of and components to be assembled into medical devices;
- ingredients of and compounds to be further processed into medicines;
- medicinal products intended for research and development trials;
- intermediate products intended for further processing into medicinal products;
- machineries and equipment, including protective ones, that are strictly necessary for the production of medicines, administration of medicinal products or use of medicinal products.
Cosmetics, biocidal products, herbal medicines, food supplements and other borderline products, as well as chemical substances other than ingredients of and compounds to be further processed into medicinal products, and other goods, including if used in healthcare facilities, do not have, in principle, medical or pharmaceutical purposes. Veterinary medicinal products, as defined in Regulation (EU) 2019/6 of 11 December 2018 are not covered by the exceptions under Articles 2, 2a and 3k of Council Regulation (EU) 833/2014. This is because those exceptions do not include the word “veterinary”; therefore, they do not cover items for “medical” or “pharmaceutical” purposes specifically for animal use (not human use).
5. Is there a definition of pharmaceutical and medical products as per the exceptions under Articles 3l(4)(b), Article 3ea(5)(b) and Article 5aa(3)(f)?
Last update: 1 February 2023
EU sanctions do not include a definition of ‘pharmaceutical and medical products’. In the cases concerning Article 3l(4)(b) and Article 3ea(5)(b), it is for the NCA to assess, on a case-by-case basis, if the products transported by a road undertaking or vessels qualify as pharmaceutical and medical products. This assessment should be conducted on the basis of the information submitted in the request for derogation by the economic operator and other information available. The recipient of a derogation retains responsibility for complying with the terms and conditions of the authorisation. The NCA may also authorise the entry into the EU of an empty road undertaking or vessel that can demonstrate that the purpose of its entry into the EU is to transport back a good that is assessed by the NCA as being pharmaceutical and medical product.
In case of Article 5aa(3)(f), it is for the economic operator to assess in the first place, and prove, if the relevant transaction concerns pharmaceutical and medical products. The economic operator retains responsibility in case the transaction does not concern those products.
It must be recalled that exceptions should be applied narrowly in order not to undermine the goal of EU sanctions (see Point 3.8. Humanitarian exceptions, Commission Guidance Note on the provision of humanitarian aid in compliance with EU restrictive measures (sanctions))87. Economic operators can seek guidance from their NCA.
This said, the categories of pharmaceutical and medical products should include first and foremost products that fall under the scope of application of the following EU legislation:
- Regulation (EU) 2017/745 (Medical Devices Regulation) and Regulation (EU) 2017/746 (In Vitro Diagnostic Devices);
- Directive 2001/83/EC (Directive on medicinal products for human use).
Subject to the assessment of the NCA and provided that the applicant has solid evidence these are medical or pharmaceutical products, the exemption at hand may include:
- spare parts of and components to be assembled into medical devices;
- ingredients of and compounds to be further processed into medicines; - medicinal products intended for research and development trials; and
- intermediate products intended for further processing into medicinal products.
Cosmetics, biocidal products, herbal medicines and food supplements and other borderline products, chemical substances other than ingredients of and compounds to be further processed into medicinal products as well as other goods, including if used in healthcare facilities, do not qualify, in principle, as pharmaceutical and medical products.
Veterinary medicinal products, as defined in Regulation (EU) 2019/6 of 11 December 2018 are not covered by the exceptions under 3l(4)(b), Article 3ea(5)(b) and Article 5aa(3)(f) of Council Regulation (EU) 833/2014. This is because those exceptions do not include the word “veterinary”; therefore, they do not cover pharmaceutical and medical products specifically for animal use (not human use).
6. Who can grant authorisations under Article 3l(4)(b) and 3ea(5)(b)?
Last update: 29 July 2022
NCAs grant authorisations under Article 3l and 3ea. See, in this respect, sections Road Transport and Access to EU ports of these FAQs.
7. Can a commercial company make use of an exemption/apply for a derogation for humanitarian purposes, when it comes to medical or pharmaceutical supplies/products?
Last update: 29 July 2022
Commercial companies should in principle avail themselves of the exceptions provided for medical and pharmaceutical products and purposes, and not of the humanitarian exception. These fall under different requirements and should not be considered interchangeable. An authorisation for humanitarian purposes under EU sanctions can be obtained only if the action is intended to provide assistance, relief and protection to persons in need, in accordance with International Humanitarian Law and the principles of humanity, neutrality, impartiality and independence and that other relevant conditions, are met and subject to the terms and conditions determined by the NCAs. Commercial companies, such as manufacturers of medicinal products and medical devices, can benefit from a derogation for humanitarian purposes.
However, since the core business of commercial companies is not humanitarian per se, such companies must show that the concerned action has humanitarian purposes only. The NCA must then assess on a case-by-case basis if the specific action has indeed humanitarian purposes (namely whether such action is intended to provide assistance, relief and protection to persons in need, in accordance with International Humanitarian Law and the principles of humanity, neutrality, impartiality and independence). The fact that in certain cases the provision of medical or pharmaceutical products can qualify as humanitarian aid does not mean that every supply of them is inherently humanitarian. NCAs and economic operators should also consider that exceptions should be applied narrowly in order not to undermine the goal of EU sanctions (see Point 3.8. Humanitarian exceptions, Commission Guidance Note on the provision of humanitarian aid in compliance with EU restrictive measures (sanctions))88 and that circumvention of sanctions is prohibited.
8. The exemption under Article 2(3)(b) and Article 2a(3)(b) can apply under the condition that the goods and technology are intended for non-military use and for a non-military end user. What does that mean?
Last update: 29 July 2022
The exemptions in Articles 2(3) and 2a(3) allow exports of dual-use and advanced technologies intended for humanitarian purposes, health emergencies and medical purposes from the relevant restrictions, as long as such exports are destined for nonmilitary use and for a non-military end-user. Therefore, where the items are destined for a civilian facility as the end-user, the exemption could apply unless there are reasonable grounds to believe that the items could be diverted to a military end-use or end-user.
9. According to Article 3k(6), an NCAs can grant derogations under Article 3k(5) unless it has reasonable grounds to believe that the goods might have a military end-use. What does that mean?
Last update: 29 July 2022
The term military end-use is addressed in Article 4(1)(b) of the Regulation (EU) 2021/821 of the European Parliament and of the Council (Dual Use Regulation). The fact that goods for medical or pharmaceutical purposes are sold, supplied, transferred or exported to military hospitals in Russia or for the use in military hospitals in Russia does not mean automatically that they are intended for a military end user.
10. How can a company verify if the goods and technology it is exporting for medical or pharmaceutical purpose are subject to restrictions under Article 2, 2a or 3k?
Last update: 29 July 2022
Dual-use goods and technology subject to the restriction under Article 2 means the items listed in Annex I to Dual Use Regulation.
Goods and technology subject to the restriction under Article 2a means the items listed in Annex VII to Council Regulation (EU) 833/2014.
Goods subject to the restriction under Article 3k means the items listed in Annex XXIII to Council Regulation (EU) 833/2014.
To ascertain if the goods and technology are subject to restrictions under Article 2, 2a or 3k, the company should check if the goods are classified under the 8-digit CN codes included in the afore-mentioned annexes. For that, they can seek guidance from their NCA. The Commission has also published a correlation table between the CN codes and the dual use codes, extracted from the TARIC database. This table, compatible with the harmonized System 2022 , is available on the public CIRCABC site “TARIC and Quota data and information” under “reference documents” .
11. What does Council Regulation (EU) No 269/2014 entail for EU economic operators or economic operators doing business in the EU when exporting medicinal or pharmaceutical products or providing financing or technical assistance to natural or legal persons, entity or body in Russia or for use in Russia?
Last update: 29 July 2022
Under Council Regulation (EU) No 269/2014, the EU has designated a number of individuals and legal persons as subject to asset freezes and a prohibition to make funds available. This means, inter alia, that it is prohibited for EU economic operators or economic operators doing business in the EU to make funds or economic resources available to designated persons or persons owned/controlled by them. Economic resources encompass assets of every kind, whether tangible or intangible, movable or immovable, which are not funds but may be used to obtain funds, goods or services; as such, medicinal or pharmaceutical products can qualify as economic resources (see point 3, Syria chapter, Commission guidance note on the provision of humanitarian aid to fight the Covid-19 pandemic in certain environments subject to EU restrictive measures ). Note that for an asset to qualify as an ‘economic resource’, it is not necessary to prove that it will be used to obtain funds (see Point 3.3. Prohibition to make funds and economic resources available to designated persons or for their benefit, Commission Guidance Note on the provision of humanitarian aid in compliance with EU restrictive measures (sanctions)) . By way of example, this means that no further trade with those persons is possible as of the moment of their designation. Economic operators should therefore make sure that they take the necessary contractual measures to that end (Russia FAQs, Section ‘Horizontal as well as Circumvention and Due diligence, Section ‘Individual financial measures’ and Section ‘Execution of contracts and claims’). Exceptions to this prohibition may however apply for exclusively humanitarian purposes in Ukraine .
14. NOTIFICATION AND AUTHORISATION OF TANKER SALES
RELEVANT PROVISION: ARTICLE 3Q of COUNCIL REGULATION 833/2014 AS OF 19 FEBRUARY 2024
1. Does this provision prohibit the sale of oil tankers to Russia? What about other third countries?
Last updated: 19 February 2024
This provision does not entail a straightforward ban on the sale or other ownership transfer of tankers to Russia. It introduces transparency into these transactions to any third country to address risks of evasion of the EU import ban on Russian crude oil or petroleum products and of the G7+ Oil Price Cap.
The provision employs a two-pronged approach with notification and authorisation requirements depending on the nationality/place of establishment of the buyer and the use of the tanker:
(i) The tanker is sold to a natural or legal person, entity or body in Russia or for use in Russia: the sale is prohibited unless it is authorised by the competent authority of a Member State, at the conditions it deems appropriate (Article 3q, paragraphs 1 to 3).
(ii) The tanker is sold to a natural or legal person, entity or body from any third country or for use in any third country, other than Russia: the sale is possible but must be notified to the competent authority (Article 3q, paragraph 4).
Any sale or transfer of ownership after 5 December 2022 and prior to 19 December 2023 shall be notified to the competent authorities before 20 February 2024.
This measure seeks to introduce transparency into the sale of tankers, in particular second-hand carriers, that could be used to evade the import ban on Russian crude oil or petroleum products and the G7+ Oil Price Cap following the change of ownership. The inclusion of this provision aims to shed light on transactions that could otherwise result in the circumvention of these provisions, for example by facilitating the expansion of a tanker fleet transporting Russian oil above the price cap.
2. What is meant by the ‘other transfer of ownership’ or ‘other arrangement entailing a transfer of ownership’?
Last updated: 19 February 2024
The obligations set out in the article apply to any ‘sale and transfer of ownership’ (paragraphs 1 and 5 of Article 3q) and ‘other arrangement entailing a transfer of ownership’ (paragraph 5 of Article 3q). Both expressions have the same meaning.
Transfer of ownership should be understood broadly, covering for instance situations such as sale, barter, relinquishment, inheritance, interests in a trust or other similar legal arrangement as well as any other sort of division of the ownership or transfer of title such as a corporate restructuring. This broad interpretation aims at avoiding the circumvention of the measure by hiding the genuine nature of the transaction.
3. To whom does the provision apply?
Last updated: 19 February 2024
This provision applies to any national of a Member State, natural person residing in a Member State, and legal person, entity or body which is established in the Union. An EU individual who owns, for instance through a third country company, a tanker registered under a third country flag is subject to this obligation. This is in line with Article 13(c) of Council Regulation 833/2014 which sets out the jurisdictional scope of the Regulation.
It is prohibited for EU operators to take part in any activities seeking to circumvent EU sanctions, for instance by acting as a substitute for a natural or legal person subject to Article 3q. The use of any intermediary to carry out the sale or transfer of ownership does not relieve the EU natural or legal person from the authorisation or notification obligations. For instance, circumvention can occur if an intermediary is used to carry out an operation that, although apparently legitimate, has the sole purpose of neutralising the effect of these obligations.
4. Does this provision only apply to the sale or other transfer of ownership of EU-flagged vessels?
Last updated: 19 February 2024
No. This provision applies to the sale or other transfer of ownership of both EU and non EU flagged vessels that are owned by a national of a Member State, natural person residing in a Member State, and legal person, entity or body which is established in the Union.
5. Who should notify? What information should be shared?
Last updated: 19 February 2024
The notification can be done by the EU natural or legal person subject to the obligation, as well as any person acting in the person’s name and/or on their behalf such as a lawyer, registered agent, ship broker. The identity of the person for whom they are acting must be clearly stated and all documentary evidence provided.
Such notification should contain the full identities of the owner, the seller (if different from the owner) and the purchaser, where applicable the incorporation documents of the seller and the purchaser including information details on the shareholding and management, the identification documents of the vessel including the IMO ship identification number of the tanker and the Call Sign of the tanker. It is also recommended to include other relevant documents, such as the sale and purchase agreement or information regarding or produced by the ship broker and escrow agent.
6. Which tankers are concerned?
Last updated: 19 February 2024
This provision covers tankers falling under HS code ex 8901 20 suited for the transport of crude oil or petroleum products listed in Annex XXV. This provision applies where the tanker could transport such products, irrespective of their effective future use. This provision would not cover tankers that are suited for the transport of products such as LNG or LPG.
Where a tanker could transport both petroleum products listed in Annex XXV as well as other petroleum products that are not listed in this Annex, the sale or transfer of ownership still falls under the scope of Council Regulation (EU) 833/2014.
7. To which competent authority should an operator notify the sale or other transfer of ownership?
Last updated: 19 February 2024
The list of competent authorities can be found in Annex I to Council Regulation (EU) 833/2014. The person should notify the authority of the Member State from which it is a citizen, a resident or is established.
The Member State concerned shall inform the other Member States and the Commission of any authorisation or notification within two weeks.
Member States are encouraged to inform their operators through adequate channels on practical modalities of such notifications (indication of the authority to which sale should be notified, creation of a standard form, etc).
8. At what conditions can a competent authority authorise the sale or other transfer of ownership of tankers to a Russian person or for use in Russia?
Last updated: 19 February 2024
A competent authorities may authorise, under the conditions they deem appropriate, the sale or other transfer of ownership of tankers for the transport of crude oil or petroleum products listed in Annex XXV, falling under HS code ex 8901 20, whether or not originating in the Union, to any natural or legal person, entity or body in Russia or for use in Russia.
They may take into account the following elements regarding the purchaser: past and current experience and track record in the maritime transport sector, ownership of the vessel as well as its flag, classification society and insurance provider, information and attestations from the shipbroker or escrow agent, management and shareholding involvement, resources to operate and maintain the tanker, track record for sanctions compliance as well as the intention to regularly access Russian territorial waters. For a legal person, entity, or body, further elements such as the place of registration, date of incorporation, content of the corporate documentation, activities and flagging of the purchaser’s existing fleet (or lack thereof), ownership structure of the purchaser including ultimate beneficial owners, identity of the shareholders and managers, etc. This list is indicative only.
Where the competent authority has reasonable grounds to believe that the tanker would be used to transport, or be re-exported to transport, Russian crude oil or petroleum products listed in Annex XXV, for import into the Union (Article 3m) or for transport to third countries above the G7+ Oil Price Cap (Article 3n), the national competent authority should not grant the authorisation. This could be the case, for example, when the national competent authority holds information (acquired through confidential or public sources) suggesting that a party in a transaction subject to authorisation is engaged in the circumvention of sanctions or that certain elements of the transactions are suspicious (e.g. one or more of the parties cannot be identified or the corporate structure is excessively complex). Conversely, and for instance, a competent authority can grant an authorisation where it receives evidence that the buyer will transport Russian crude oil or petroleum products in compliance with the G7+ Oil Price Cap or that it will access Russia only to transport non-Russian crude oil.
9. How can a seller ascertain that its tanker is not being sold for “use in Russia”?
Last updated: 19 February 2024
In order to comply with this provision, an operator selling or transferring ownership should carry out the necessary due diligence to establish whether the buyer will use the tanker is Russia.
A seller should seek this information from its counterpart with an explicit documented inquiry. The seller may also make a declaration that, based on such evidence, it has undertaken due diligence on the buyer of the tanker, and it is not aware of any reason why the tanker would be used in Russia. Furthermore, the declaration should include an assertion that the buyer or/and its ultimate beneficial owners are not subject to EU sanctions.
Authorisations should be sought only for cases in which the due diligence has revealed that the sale is to the benefit, directly or indirectly, to a Russian person or for use in Russia. Where no such information has been collected, it is not necessary to request an authorisation. A notification is sufficient. National competent authorities may reject such requests.
10. Will an EU operator be held liable if the tanker it sold is subsequently used in Russia and it had not requested an authorisation?
Last updated: 19 February 2024
The EU individual or entity selling or transferring ownership, as well as operators participating in the sale or transfer of ownership such as a shipbroker or escrow agent, should carry out the necessary due diligence to ensure compliance with EU sanctions.
Where the tanker is sold to a Russian person or is for use in Russia, sufficient evidence must be provided to the national competent authority to prove that the tanker would not be used in breach of the import ban on Russian crude oil or petroleum products and the G7+ Oil Price Cap. If the EU operator knowingly and intentionally fails to conduct such due diligence, this can be considered as participation in a circumvention scheme.
Article 10 of Regulation 833/2014 (non-liability clause) remains applicable i.e the sale of a tanker by an EU operator shall not give rise to liability, if he/she did not know, and had no reasonable cause to suspect, that the tanker sold to an operator in a third country would be used in Russia.
11. Does the notification obligation apply retroactively?
Last updated: 19 February 2024
Article 3q, paragraph 5, provides that the sale or other transfer of ownership of tankers concluded after 5 December 2022 and prior to 19 December 2023 should be notified to the competent authorities by 20 February 2024 at the latest. It is the obligation of the EU natural or legal person to trace back the sale or transfer or ownership and to collect all relevant information to be shared with the competent authority. Such notification should be made in line with the requirements set out in Article 3q, paragraph 4. Please refer to FAQ 5 for further information.
Member States national authorities should raise awareness with relevant stakeholders on the need to comply with such an obligation, including for the sales which occurred prior to the adoption of the measures, up to 5 December 2022.
12. Does this provision cover long-term charterparties?
Last updated: 19 February 2024
It is not required to notify or seek authorisation for long-term charterparties. EU natural and legal shipowners that charter tankers, directly or indirectly, must comply with EU sanctions (Article 13 of Council Regulation (EU) 833/2014). This includes bareboat charterparties.
Where a tanker is long-term chartered, the EU natural and legal shipowner should carry out the necessary due diligence to ascertain, in particular, compliance with the EU import ban on Russian oil and the G7+ Oil Price Cap.
13. What are the notification obligations of Member States under this provision?
Last updated: 19 February 2024
The Member State receiving notifications and granting authorisations shall inform the other Member States and the Commission of any authorisation granted under paragraph 2, and of any notification under paragraphs 4 and 5, within two weeks of the authorisation or notification.
This information sharing shall support the detection instances of breach or circumvention of this provision. This can facilitate the implementation and enforcement of the EU import ban on Russian crude oil or petroleum products and of the G7+ Oil Price Cap, in line with Article 3na, with a view to further identify vessels and entities of concern carrying out one or more deceptive practices while transporting Russian crude oil and petroleum products.
Any information provided or received in accordance should be used for the purposes for which it was provided or received, including ensuring the effectiveness of the measure.
15. TARGETED VESSELS
RELATED PROVISION: ARTICLE 3S OF COUNCIL REGULATION 833/2014
FREQUENTLY ASKED QUESTIONS – AS OF 2 JULY 2024
1. Can a vessel targeted in Annex XLII laden with dangerous or polluting goods at the date of targeting, such as oil, receive port access and services to unload its cargo?
Last update: 2 July 2024
For reasons of maritime safety or for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, where a vessel targeted in Annex XLII is laden with dangerous or polluting goods, such as oil, subject to the competent authorities assessment the vessel may exceptionally benefit from the exemption in Article 3s paragraph 3 to receive port access and services for a unique emergency port call for the offloading of the dangerous or polluting goods on board at the date of the targeting of the vessel within a reasonable time, and in any case not later than 30 days from the date of targeting.
Per Article 13 of Council Regulation (EU) 833/2014, the Regulation applies throughout the territory of the Union, to any vessel under the jurisdiction of a Member State and to any legal person, entity or body which is incorporated or constituted under the law of a Member State. The competent authority of the EU operator involved in such operations should be contacted for support.