Questions and Answers on the 14th package of restrictive measures against Russia
Q&A 14th package of restrictive measures against Russia
CONTENTS OF THE PACKAGE
What does the 14th package consist of?
The 14th package includes the following elements:
ENERGY-RELATED MEASURES
- Prohibition on providing goods, technology or services to LNG projects under construction in Russia, such as new terminals like Arctic LNG 2 or Murmansk LNG. This limits the future expansion of Russian LNG capacities.
- Prohibition on the transshipment of Russian LNG through EU ports: this important restriction prohibits Russian LNG from being transhipped via EU ports, as well as the provision of related technical services. A derogation can be requested for transshipment of LNG when the destination of the cargo is another Member State. This will increase costs for Russia, which will no longer be able to use EU infrastructures to optimise the transport of its LNG across the world. The measure includes a 9-month wind-down.
- Prohibition on the import of Russian LNG into specific terminals which are not connected to the EU gas pipeline network. This will complement the measures under the Decarbonised Gases and Hydrogen package which allow Member States to limit the import of Russian gas into their national network, in line with the REPowerEU objectives.
- Listings of vessels supporting the Russian warfare: these vessels are prohibited from accessing ports and receiving services (see more in the section on transport measures).
ANTI-CIRCUMVENTION MEASURES
- Best efforts obligation concerning foreign subsidiaries: EU companies will have to undertake their best efforts to ensure that their subsidiaries in third countries do not take part in any activities undermining EU sanctions.
- “No Russia” clause for Intellectual Property Rights (IPR) transfers, to ensure that industrial know-how transferred outside the Union is not used to manufacture Common High Priority (CHP) goods intended for Russia.
- Due diligence requirements for CHP goods: EU companies will have to perform due diligence to prevent CHP goods from reaching Russia, and to ensure that their foreign subsidiaries trading in CHP goods do the same.
ADDITIONAL LISTINGS
- A total of 116 additional listings of 69 individuals and 47 entities subject to asset freezes, and – in the case of individuals – also to travel bans. Listings touch upon various sectors of the Russian state, including military companies, companies active in space engineering, in the chemical sector or in the explosives sector and leading Russian energy companies. The listings include actors involved in disinformation/propaganda activities, in support of Russia's war of aggression against Ukraine.
FINANCIAL SECTOR MEASURES
- Prohibition for EU banks outside Russia to connect and carry out transactions using the Financial Messaging System of the Central Bank of Russia (SPFS). SPFS is an initiative of the Central Bank of Russia aimed at avoiding international sanctions. Currently around 160 banks in the world are connected to SPFS. The measure is expected to contain the development of this system, curb Russia's capacity to wage war and prevent our sanctions from being undermined.
- Prohibition on transactions with third-country banks using SPFS to increase Russia's financial resilience and to support the circumvention of our sanctions. It will be prohibited for EU operators to engage with any of the listed third-country banks.
- Prohibition on transactions with banks and crypto assets providers, in Russia and third countries, that facilitate transactions supporting Russia's defence-industrial base. It will be prohibited for EU operators to engage with any of the listed banks and crypto assets providers.
TRADE-RELATED MEASURES
EXPORTS
- Extension of the export restrictions on dual use/advanced technology items (e.g., “quadbikes”, microwave and aerial amplifiers and digital flight data recorders), aiming to further weaken Russia's military capabilities.
- Reinforcement of the current export bans on industrial goods focusing on four sectors which are key to Russia's war economy: chemicals, plastics, vehicles parts and machinery, worth EUR 5 billion of annual exports prior to the invasion (2021).
- Addition of 61 Russian and third-country entities to the list of entities associated to Russia's military-industrial complex (including 33 entities registered in third countries: 19 in China/Hong Kong, 9 in Türkiye, 2 in Kyrgyzstan, 1 in India, 1 in Kazakhstan, 1 in UAE).
IMPORTS
- Import ban on helium: Russia is substantially investing in its (energy-intensive) production of this component, which is key for the semiconductor and health industries. The aim of the ban is to avoid new dependencies and to create revenue potential for Russia.
- Finetuning of the import ban on Russian diamonds: clarifying that the ban does not apply to diamonds that were located in the EU or in a third country (other than Russia), or were polished or manufactured in such third country, before the ban on Russian diamonds entered into force (so-called ‘grandfathering'). Allowing temporarily imports or exports of jewellery, for example for trade fairs or repairs. Prolonging by six months (until 1 March 2025) the sunrise period after which the full-traceability scheme for imports of rough and polished natural diamonds will become mandatory. Postponing the ban on jewellery incorporating Russian diamonds processed in third countries other than Russia until the Council decides to activate the ban in the light of action taken within the G7 to pursue that measure.
- Extension of the Common High Priority (CHP) list: the CHP list, compiled by the EU and its international partners, was updated to include five HS codes concerning computer numerical control (CNC) machine tools used for weapons production. This update is now reflected in EU legislation.
TRANSPORT MEASURES
- Aviation: prohibition on non-scheduled flights if a Russian person decides the origin or destination (regardless of ownership and control over the aircraft); introduction of uniform obligation to provide information about non-scheduled flights upon request of national authorities regarding aircraft ownership, passengers etc., also to avoid circumvention of the flight ban.
- Road: tightening the existing prohibition to transport goods by road in the EU, including transit, to EU-companies owned 25% or more by Russian persons. Current EU road transport undertakings owned 25% or more by Russian persons would no longer be allowed to transport goods. In addition, companies owned 25% or more by Russian persons would no longer be allowed to become EU road transport undertakings.
- Maritime: prohibition on port access and services for listed vessels. In the 14th package, 27 vessels are placed on this list, for their contribution to the Russian warfare in various sectors such as the transport of military equipment for Russia and the transport of stolen Ukrainian grain, participation in the dark fleet transporting Russian oil while conducting deceptive shipping practices, and support in the development of Russia's energy sector, for instance through the transport of LNG infrastructure components or LNG transshipments.
PROTECTION OF EU OPERATORS
- Legal basis for compensation claims in Member States courts: creation of a legal basis for EU operators to claim compensation in the EU for damages caused by Russian companies linked to sanctions implementation and expropriation. This will enable EU companies to recover such damages from the Russian counterpart's possible assets in the EU.
- Transaction ban to protect arbitration: this new measure allows imposing a transaction ban on those Russian companies that meddle with arbitration and court competence rules.
MEASURES PROTECTING INTELLECTUAL PROPERTY RIGHTS (IPR)
- Prohibition on the acceptance, by EU and Member States' intellectual property offices and authorities, of applications for registration of, among others, new trademarks and patents requested by Russian persons and persons resident in Russia.
MEASURES COMBATTING RUSSIAN INTERFERENCE
- Prohibition on accepting financing from the Russian state and its proxies by political parties, NGOs and media service providers in the EU. This measure will help safeguard the integrity and independence of EU political processes, protect EU citizens from manipulation and defend the EU's internal affairs from malign interference, against the background of increasing evidence of coordinated disinformation and interference campaigns in the EU linked to Russia.
ADDITIONAL MEASURES
- Prohibition on EU and Member States funding to all Russian entities – and not only state-owned ones as was previously the case. This would align with already existing restrictions on public procurement.
- Import ban on stolen Ukrainian cultural items: for cultural heritage products stolen from Ukraine.
ENERGY-RELATED MEASURES
How will the transshipment ban hurt Russian revenues from LNG?
Russia is currently using EU port facilities to unload Russian liquified natural gas from its large ice-breakers to smaller, cheaper vessels thereby optimising the transport of its gas to the rest of the world. The EU should no longer be facilitating the transport and sale of Russian LNG by allowing Russia to reduce its logistical costs. It will need to find alternative transshipment facilities, thereby increasing its costs.
How will the prohibition on investments and exports to LNG facilities under construction in Russia affect Russia's LNG production?
Despite extensive export bans already in place, in particular in the energy sector, Russia still relies on key components manufactured by EU companies to finalise the construction of its new LNG terminals, such as Arctic LNG 2 and Murmansk LNG. EU high value products and technology should no longer serve the expansion of Russian LNG production and exports. EU operators will need to conduct their due diligence in order to verify that the goods and services they are exporting are not for use in Russian LNG facilities under construction.
Will the LNG-related measures impact the security of gas supply of the EU? Will they trigger a price increase for EU consumers?
The LNG-related measures are designed to continue ensuring the security of gas supply to the EU. The transshipment ban only affects Russia's logistic costs to export LNG, but it does not prohibit (or target in any way) imports into the EU or anywhere else. LNG supplies to the EU will remain unaffected. At the same times, prices are not expected to be affected as LNG is a global market where prices are determined by the interplay between demand and supply globally, and global supply would not be affected by this transshipment ban.
DESIGNATION/LISTING OF VESSELS
Why are vessels listed?
This provision empowers the EU to list vessels that are supporting Russia's warfare against Ukraine. Such vessels can be listed on the basis of criteria such as the transport of military equipment, the transport of stolen Ukrainian goods such as grain, their participation in the dark fleet transporting Russian oil and their support to the exploitation or development of the Russian energy sector such as the transport of LNG infrastructure or transshipment of Russian LNG.
Which vessels are affected by this measure?
Vessels subject to this measure are listed in Annex XLI. In the 14th package, for the first time the EU has listed 27 vessels for their involvement in the transport of military equipment and stolen Ukrainian grain, their participation in the dark fleet transporting Russian oil and their support to the development of the Russian LNG sector.
What is the scope of the measure against vessels?
A vessel listed in Annex XLI is subject to a port access ban, and a prohibition to provide a broad array of maritime services and others services such as financing and financial assistance including insurance and brokering flag registration, technical assistance, bunkering, ship supply services, crew changes services, other services including bunkering, ship supply services, crew changes services, cargo loading and discharge services, fendering and tug services. This means that such services cannot be provided by EU operators, in ports or outside of territorial waters. It is also prohibited to charter, operate or crew such a vessel, as well as to engage in ship-to-ship transfers or any other transfer of cargo with, or procure any services from, such a vessel. The full list of services is accessible in Article 3s of Council Regulation 833/2014.
ANTI-CIRCUMVENTION MEASURES
Is the Council extending the reach of sanctions beyond EU territory?
EU sanctions are not extraterritorial. At the same time, it is important that the foreign subsidiaries of EU companies do not engage in activities that go against the purpose of our sanctions, weakening their impact. It falls on the parent companies to work in this direction, through the leverage they have over their foreign subsidiaries. The legislation adopted as part of the new package requires them to undertake their “best efforts” in doing so. Moreover, it requires them to ensure that their subsidiaries are particularly careful when it comes to trade in specific types of sensitive goods, by using the “no Russia” clause in their contracts, and by conducting appropriate due diligence.
Have any changes been made to the “no Russia” clause provision?
A few elements have been added in order to reduce the implementation burden for EU operators:
- First, for contracts concluded before the adoption of the 12th package, the deadline to ensure compliance was extended from 20 December 2024 to 1 January 2025.
- Second, an exemption was added for contracts concluded as part of public procurement in third countries. Such contracts will still need to be notified to the national competent authorities;
- Third, Iceland and Liechtenstein have been added to the list of partner countries.
The Commission will assess the impact of the “no-Russia clause” in order to understand its impact on deterring circumvention. The Commission will also consider other appropriate actions to curb Russia's access to sensitive goods, including the possibility of requiring Union operators to ensure that their subsidiaries in third countries also use the “no-Russia clause”.
How does the “no Russia” clause for intellectual property rights work?
The 11th sanctions package prohibited the transfer to third parties of industrial know-how, such intellectual property rights and trade secrets, if that was to be used, for instance, to manufacture goods intended to Russia which are subject to export restrictions. This measure addressed the practice of certain EU companies of delocalising production of restricted goods to third countries, so that manufacturing could take place locally and export to Russia could be done avoiding any control.
The new measure adopted in this package requires EU companies to include in their contractual arrangements with third-country parties an obligation that their transferred intellectual property right will not be used, by them or their sublicensees, for manufacturing CHP goods destined to Russia.
What are the new due diligence requirements about?
The new requirements focus on Common High Priority (CHP) items. Union operators selling, supplying, transferring or exporting such items to third countries, other than partner countries, will be required to have due diligence mechanisms capable of (i) identifying and assessing the risks of re-exportation to Russia and (ii) mitigating such risks. This will help combat the re-exportation of CHP goods to Russia. Moreover, Union operators will need to ensure that their foreign subsidiaries that deal in CHP items also implement these requirements. These measures will serve to further restrict Russia's access to CHP items.
How was the road transport prohibition tightened?
There was increasing evidence that the current road transport prohibition was at risk of being circumvented through the establishment or purchase by Russian persons of EU road transport undertakings. The 14th package therefore introduces an additional measure preventing EU companies which are owned 25% or more by Russian natural or legal persons from becoming EU road transport undertakings. Current EU road transport undertakings which have 25% or more Russian ownership will also no longer be allowed to transport goods. Any EU road transport undertaking may be requested by its national authority to provide information on its ownership structure.
ADDITIONAL LISTINGS
Who have you targeted?
The 14th package of EU sanctions adds 69 individuals and 47 entities to the list of natural and legal persons subject to asset freezes and the prohibition to make funds and economic resources available to them.
What entities have been targeted and in which countries?
The new listings touch upon various sectors of the Russian state, including military companies, companies active in space engineering, in the chemical sector or in the explosives sector and leading Russian energy companies. The listings also include key players involved in propaganda and disinformation activities in support of Russia's war of aggression against Ukraine.
FINANCIAL SECTOR MEASURES
How is the SPFS ban going to work in practice?
The new package prohibits transactions using the Financial Messaging System of the Bank of Russia (SPFS). SPFS is the Russian equivalent of SWIFT. The system is an initiative of the Central Bank of Russia, aimed at neutralising the impact of EU sanctions. The new measure prohibits the Union entities which operate outside of Russia from directly connecting to this system. The new measure also allows for the listing of specific third country operators (e.g., foreign banks) that use SPFS in a transaction ban. Since the EU long-standing stance is that its sanctions against Russia do not target in any way the trade in agricultural and food products, including grain and fertilisers, between Russia and third countries, the wholesale exemption for agri-food trade in the transaction ban is maintained also for entities using the SPFS.
The measures have a dual approach. First, they prohibit the direct connection of EU banks, which operate outside of Russia to the SPFS. The proposal provides for exceptions, such as for energy payments or repayment of debt. Second, to impose a transaction ban on certain entities in third countries that are using SPFS. Those entities (e.g., third country financial institutions) would be listed in an annex. This is expected to significantly curb Russia's capacity to wage war and prevent the frustration of our sanctions. Again, specific exemptions are provided, for example on agri-food transactions or humanitarian assistance.
TRADE-RELATED MEASURES
What are the “improved export bans” introduced with the 14th package of sanctions?
The 14th package introduces new bans that do not concern “new” categories of products, but rather reinforce current sanctions: this focuses on chemicals, plastics, vehicles parts, machinery. This is to deny Russia additional technology and inputs for its war economy.
The measures are broadening several of the existing 6-digit bans to full 4-digits. This will make it easier for customs officials to check compliance of exports with sanctions. This concerns in particular:
- Products of the chemical industry, including manganese ores, silicon dioxide, chlorides, carbonate, as well as compounds of rare-earths, refractory cements, chemicals for batteries.
- Products of the plastic industry: this would cover the full scope of cellulose products and their derivatives.
- Vehicles parts, incl. replacement parts for trucks; engines for all types of vehicles; and a limited number of car parts.
- Machinery and appliances like boring/excavating machinery, appliances for pipes; electrical equipment; monitors, radios, and video/audio equipment.
Why do you need a finetuning of the import ban on Russian diamonds?
Overall, the proposed sanctions on Russian diamonds are part of a concerted G7 effort to introduce an internationally coordinated diamond ban, that aims at depriving Russia of this important revenue stream estimated at EUR 4 billion per year, of which approximately EUR 1.5 billion are annual imports into the EU.
To finetune the ban already agreed in the 12th sanctions package, we need a grandfathering clause for stocks of diamonds held in the EU and in third countries (but outside Russia). These stocks no longer provide revenue to Russia, so this is not a “concession”. The 14th package clarifies that diamonds that were physically located in the EU or a third country other than Russia, or were polished or manufactured there, before the import ban on Russian diamonds entered into force, are not subject to the ban.
We are also introducing the possibility to temporarily import or export jewellery, for example for trade fairs or repairs.
To allow more time to set up the G7 traceability scheme, we are prolonging by six months (until 1 March 2025) the sunrise period during which the G7 certification mechanism is still recommended to facilitate importation but optional and importers of diamonds may continue providing documentary evidence for importation of both rough and polished natural diamonds into the EU. On 1 March 2025 the full-traceability scheme for imports of rough and polished natural diamonds will become mandatory.
Finally, we are postponing the ban on jewellery incorporating Russian diamonds processed in third countries other than Russia, which was foreseen to enter into force on 1 September. The Council may decide to activate the ban at a later stage when partners within the G7 pursue that measure.
PROTECTION OF EU OPERATORS
Why do we need a legal basis for EU operators to claim compensation for damages caused by Russian companies?
Currently, EU companies that, for instance, end a contract with a Russian firm to comply with sanctions are shielded by possible claims in the EU. However, they can be sued in Russia for that and have their assets there seized. The new instrument establishes a specific legal basis for EU companies to recover such damages from the Russian counterpart's possible assets in the EU. An additional provision was also adopted to allow EU companies to recover damages from those who benefit from the illegitimate temporary management imposed by the Russian Government on certain EU companies that are located in Russia.
How is the transaction ban to protect arbitration going to work in practice?
An amendment to the Russian Commercial Procedural Code enabled Russian companies to have a Russian-court “order” EU-companies to stop arbitrations or proceedings outside Russia, against Russian entities, under the threat of seizure of their assets in Russia. Today's measure allows imposing a transaction ban on those Russian companies that by doing this meddle with arbitration and court competence rules.
MEASURES PROTECTING INTELLECTUAL PROPERTY RIGHTS (IPR)
Why has the EU imposed a ban on accepting applications for registration of certain intellectual property rights?
Russia is on the offensive on depriving protection of intellectual property rights of our companies in Russia. Russia wants to get hold of Union industrial know-how, which is the result of R&D investments. It does that to localise production and cut economic dependency on the EU and ultimately neutralising sanctions. The new measure requires Union Intellectual Property Offices and other competent institutions not to accept new applications for patents, trademarks and other intellectual property rights from Russians. Russians can still use their new trademarks and technology in the Union. They will simply not be protected against the use by a Union company or exchanges as a property title. Their existing registered intellectual property rights will not be cancelled.
OTHER MEASURES
What do the new aviation measures consist of?
Two provisions have been included with the aim of tackling circumvention of the flight ban and ensuring its full implementation:
- Ban on non-scheduled flights decided by Russian persons
The flight ban applies not only to Russian airlines and to aircraft owned or controlled by Russian persons or companies but also to any aircraft where a Russian person or company decides origin or destination of the flight.
It is also specified that the flight ban does not apply to smaller aircraft when used for recreational or training purposes.
- Obligation to provide information on non-scheduled flights
Introduction of a uniform obligation to provide in advance information about non-scheduled flights upon request of national authorities, including with respect to: (i) the actual ultimate beneficial owner of the aircraft and the person or company ultimately chartering the aircraft; and (ii) (where are reasons to suspect circumvention) the passengers of the flight, including documents such as a general declaration, passenger manifest and other official documents.
Why has the prohibition on public financing been extended?
EU sanctions on Russia already included a prohibition to provide any public support, including financing to publicly owned entities in Russia. This is now broadened to all entities established in Russia. Limited derogations apply, in particular for Member States cultural and educational centres or civil society organisations still operating in Russia.
Political parties, NGOs and media service providers will now be prohibited from accepting financing from the Russian state. How is this justified?
The 14th package introduces a prohibition on certain EU entities from accepting donations, economic benefits or other financing from the Russian state, state-owned entities or its proxies. European and national political parties, non-governmental organisations (NGOs) and media service providers in the EU will be prohibited from accepting this financing. This is done to combat Russian interference in the EU's democratic processes and attempts by the Russian state to undermine our democratic foundations and public opinion forming processes, including through influence campaigns and the promotion of disinformation aiming to justify and support its war of aggression against Ukraine. This also complements the objectives the EU's Defence of Democracy Package, which introduces common transparency standards to protect the EU democratic sphere, promote institutional trust and protect open public debate from interference.
GENERAL
What is the added value of imposing such sanctions?
EU sanctions fulfil the EU's key objective, which is to continue to work for a just and lasting peace, not another frozen conflict.
The EU stands firmly with Ukraine and its people, and will continue to strongly support Ukraine's economy, society, armed forces, and future reconstruction.
EU sanctions are at the core of the EU's response to this unjustified military aggression against Ukraine, as they aim at concrete and measurable results linked to the weakening of Russia's economic capacity, thereby limiting its ability to finance the war.
The data available at this stage show that the sanctions have already imposed an immediate, high, and growing cost on the Russian economy. This is not only about EU exports to Russia, which have decreased by 60% between 2021 and 2023. This is also about Russia not being able to replace these exports.
Sanctions need to be properly implemented. Ensuring an effective and diligent implementation of sanctions is key to prevent circumvention. This is primarily the responsibility of Member States. In this process, the European Commission is fully committed to assisting national authorities and ensuring a consistent implementation across the Union.
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