As announced by Ursula von der Leyen in a speech held mid-February in Brussels “to turn up the pressure” on Russia, the tenth package of sanctions against Russia has been released last weekend in the Official Journal of the European Union (OJEU).
In the same vein and marking the first anniversary of Russia’s aggression against Ukraine, the FATF, in its plenary session recently held in Paris, reiterated its deepest sympathies to the people of Ukraine and decided to suspend the membership of the Russian Federation, recalling to be vigilant to current and emerging risks stemming from the circumvention of measures taken against the Russian Federation, to protect the international financial system.
Three new (EU) Council Regulations have hence been published in the Official Journal of the European Union (L 059I).
Council Regulation (EU) 2023/426 of 25 February 2023
Council Regulation (EU) 2023/426 of 25 February 2023, which entered into force on the same day, amends Regulation (EU) N°269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, with mostly two points of interest for financial stakeholders.
Firstly, a derogation being introduced for competent authorities to potentially authorise the release of frozen funds belonging to a limited number of listed financial entities (here, newly listed Russian banks), for instance, if necessary for the termination of contracts/agreements and correspondent banking relationships with strict requirements pertaining to delays and the perfection of contracts.
The Regulation then introduces enhanced communication and cooperation requirements and procedures for concerned actors to efficiently report to their competent authorities.
Council Regulation (EU) 2023/427 of 25 February 2023
Council Regulation (EU) 2023/427 of 25 February 2023, which entered into force on 26th February, amends Regulation (EU) N°833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine and directly impact financial operations, having mainly regard to financial assistance provided in relation to some import and export bans.
This Regulation extends the list of items whose exports from the Union shall be prohibited. Are notably concerned the dual use goods and technology (such as electronic components), but also some aimed at deterring the Russian war efforts (exceptions applying). The Council of the EU notably increased the list of natural/legal persons subject to the export ban. Note that (EU) Regulation N°833/2014 includes the ban for financial stakeholders to provide financing or financial assistance related to those exports/imports bans.
Additionally, the list of partner countries collaborating with the EU in terms of information exchange and the application of some derogations has been extended to new countries.
A new reporting obligation has also been introduced, demanding financial sector entities, CSDs and central counterparties to provide to the “competent authorities” no later than 2 weeks after 26th February information on the management of assets/reserves related to Russian central Bank assets. The European Commission announcing it as a new anti-circumvention measure.
Council Regulation (EU) 2023/429 of 25 February 2023
To finish with, Council Implementing Regulation (EU) 2023/429 of 25 February 2023, which entered into force on the same day, implements Regulation (EU) N°269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine, adding new individuals/entities to the list of sanctioned persons. 87 individuals and 34 legal entities have been added to Annex I of (EU) Regulation N° 269/2014, bearing in mind that three new Russian banks have been inserted into the Annex, hence subject to the asset freeze and the prohibition to make funds and economic resources available to them, namely:
- Alfa Bank JSC (entry 198 of the Annex I). Note here that some of its European subsidiaries/arrangements are concerned.
- Public joint-stock company Rosbank (entry 199 of Annex I)
- Tinkoff Bank JSC (entry 200 of Annex I)
The ABBL keeps up to date for its members a technical note on Russian sanctions emphasising the novelties relevant for financial stakeholders but nonetheless highly recommends its members to thoroughly examine the content of the three (EU) Regulations to accommodate their procedures accordingly.
By Julien Leroy – Senior Legal Adviser