Regulatory Compliance updates January 2024

Published on January 24, 2024

EU designates Russian diamond mining company & CEO

The EU has designated PJSC Alrosa and its CEO, Pavel Alekseevich Marinychev, Russia’s largest diamond producer, accounting for over 90% of Russian production. This follows the ban on the import of non-industrial natural and synthetic diamonds originating or exported from Russia which came into force on 1 January 2024.

EU establishes Guatemala sanctions

The EU has established a Guatemala sanctions regime, authorising sanctions against individuals and entities responsible for actions that undermine democracy, the rule of law and a peaceful transfer of power in Guatemala, including through persecution or intimidation of public officials, democratically-elected authorities, civil society, media and judicial operators among others, as well as through financial misconduct concerning public funds and the unauthorised export of capital.

EU Common Military List

The Annex to Directive 2009/43/EC been updated. Member States shall adopt and publish, by 31 May 2024 at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions. They shall apply those provisions from 7 June 2024.

EU designates Russian diamond mining company & CEO

The EU has designated PJSC Alrosa and its CEO, Pavel Alekseevich Marinychev, Russia’s largest diamond producer, accounting for over 90% of Russian production. This follows the ban on the import of non-industrial natural and synthetic diamonds originating or exported from Russia which came into force on 1 January 2024.

European Union: New tool to enable EU to withstand economic coercion enters into force

The Anti-Coercion Instrument (ACI) has entered into force, providing the EU with the means to deter and respond to economic coercion, and thereby better defend its interests and those of its Member States on the global stage. The ACI is first and foremost designed to act as a deterrent against economic coercion. Where coercion still happens, the tool provides a structure to respond in a well-calibrated way to stop the coercion. It gives the EU a wide range of possible countermeasures when a country refuses to remove the coercion. These include the imposition of tariffs, restrictions on trade in services and trade-related aspects of intellectual property rights, and restrictions on access to foreign direct investment and public procurement. The Regulation provides a legal framework for responding to coercion and sets down the means for the EU to investigate and take decisions. It includes timeframes and procedures for stakeholders affected by coercion to contact the Commission and hold a stakeholder consultation before taking countermeasures. The ACI likewise provides a framework for the EU to request a third country to repair the injury caused by its economic coercion. The EU will continue to cooperate with like-minded partners and allies to address economic coercion, and the ACI is a significant addition to international efforts in this domain.

Finland extends border closure with Russia

Finnish authorities have extended the closure of the country's border crossings with Russia until at least Feb. 11. Officials may further extend, modify, or rescind the border measures on short notice ahead of their scheduled expiration date. The countries' shared border was previously scheduled to reopen Jan. 15.

Malta guidance on EU restrictions on sale of oil tankers to Russian entities

Malta’s Sanctions Monitoring Board (SMB) has published guidance on the EU prohibition on the sale or transfer of ownership of oil tankers to Russian-based individuals or entities, introduced in the 12th package of EU Russia sanctions on 18 December 2023.

Ukraine designates Russian individuals using Ukrainian documents

Pursuant to Article 5 of the Law of Ukraine "On Sanctions", Ukrainian President Volodymyr Zelenskyy has enacted Presidential Decree No. 877/2023, designating 6 Russian individuals who are allegedly using Ukrainian ID documents. The designated individuals are subject to 12 types of sanctions, including asset freezes, restrictions on trade, and restrictions on travel and transit of resources in Ukraine.

UK makes amendments

The UK Government has made 4 administrative amendments to the following entries under the Isil (Da'esh) and Al-Qaeda sanctions regime. These individuals remain subject to an asset freeze, arms embargo and travel ban:

  • Tayeb Nail (Unique ID: AQD0326)
  • Saifi Ammar (Unique ID: AQ D0303)
  • Said Arif (Unique ID: AQD0299)
  • Habib Ben Ahmed Al-Loubiri (Unique ID: AQD0181)

The UK has also designated one entity under the Bosnia and Herzegovina sanctions regime, for their involvement in celebrations of Republika Srspka Day in direct contravention of the country’s constitution and court rulings.
The individual being sanctioned:

  • Mania D.O.O (Unique ID: BIH0004)

is now subject to an asset freeze.

UK ECJU issues guidance for export licence applications

The UK Export Control Joint Unit has issued guidance consisting of “reminders and good practice” for export licence applications, including:

  • all applications received are processed on a case-by-case basis against the Strategic Export Licensing Criteria and noting any trade sanctions, embargoes and other restrictions in place at the location where your proposed exports are going;
  • requests for information are open for 20 days, but the case officer can help with an extended deadline where there are delays in getting responses from customers;
  • use the updated end user undertakings template; and
  • where possible, amendments should be made to applications rather than withdrawals and resubmissions.

New UK trade and financial sanctions against Russia

The UK has introduced the Russia (Sanctions) (EU Exit) (Amendment) (No. 4) Regulations 2023, which:

  • bans the import of certain Russian metals (Reg 7);
  • expands the payments processing restrictions to include non-sterling payments (Reg 3);
  • prohibits the provision of technical assistance relating to luxury goods (Reg 5);
  • provides statutory footing for annual frozen assets reporting to OFSI and imposed reporting obligations (and civil penalties for failure to report) for designated persons (Reg 16, 17, 21); and
  • included a licensing ground for divestment (Reg 22).

A trade licence was issued to authorise the acquisition of a warrant on a global metal exchange, so far as otherwise prohibited by the new regulations, by LME Clear Limited, the London Metal Exchange, global metal exchange members, and clients of global metal exchange members.

The Russia (Sanctions) (EU Exit) (Amendment) (No. 5) Regulations 2023 introduces a diamond ban to come into force on 1 January 2024, which prohibits the import of diamonds and diamond jewellery from Russia.
Source: Ministry of Finance, UK

United Kingdom: General Trade Licence Russia Sanctions – Vessels

The General Licence has been revised and comes into force on 18 January 2024.

  • Regulation 46XB (import of Schedule 3DA revenue generating goods)
  • Regulation 46XD (supply and delivery of Schedule 3DA revenue generating goods to a third country)
  • Regulation 46XE (technical assistance relating to Schedule 3DA revenue generating goods)
  • Regulation 46XF (financial services and funds relating to Schedule 3DA revenue generating goods)
  • Regulation 46XG (brokering services relating to Schedule 3DA revenue generating goods)


Updated Annex 1 of dual-use items

The list of dual-use items set out in Annex I of Regulation (EU) 2021/821 has been updated to ensure full compliance with international security obligations, guarantee transparency and maintain the competitiveness of economic operators. The updates concern the control parameters for manufacturing equipment, high performance computers and lasers, propulsion motors for submersible vehicles, and aircraft engines.


Further UK sanctions against Russia

New measures prohibit the export, supply and delivery, and making available to, or for use in, Russia, of newly sanctioned items as well as the provision of related ancillary services. The newly sanctioned items have been added to existing schedules in the 2019 Regulations, namely: 2A (critical-industry goods and critical-industry technology), 3A (luxury goods) and 3E (G7 dependency and further goods).

The new measures also included amendments to Schedule 3C (defence and security goods and defence and security technology). The new measures also amend some codes in Schedule 3I (Russia’s vulnerable goods).


EU adopts 12th package of Russia sanctions

EU adopts 12th package of economic and individual sanctions which includes:
Diamond ban:

  • from 1 January 2024, the EU will ban non-industrial natural and synthetic diamonds originating or exported from Russia. A ban on Russia diamonds processed in third countries, including jewellery will be phased in progressively from March 2024 and be completed by September 2024.

No re-exportation to Russia contractual clause: 

  • requirement for EU exporters to contractually prohibit re-exportation to Russia of sensitive goods and technology (e.g. items used in military systems and aviation goods) when selling to third countries with the exception of partner countries.

Designations and trade sanctions:

  • designation of 29 entities supporting Russia’s military-industrial complex;
  • designation of a “significant amount of additional individuals and entities” (legal acts yet to be published in OJ);
  • expansion of the list of restricted items to include chemicals, lithium batteries, thermostats, DC motors and servomotors for unmanned aerial vehicles (UAV), machine tools and machinery parts;
  • restrictions on imports of goods such as pig iron and spiegeleisen, copper wires, aluminium wires, foil, tubes and pipes;
  • import ban on liquefied propane with a 12-month transitional period;
  • exemptions to import restrictions on personal use items, including hygiene, clothing, and cars.

Enforcement and anti-circumvention measures:

  • transit ban to apply to all battlefield goods;
  • ban on Russian nationals owning, controlling or holding any posts of the governing bodies of entities providing crypto-asset wallet, account or custody services to Russian persons and residents;
  • prohibition of the provision of software for the management of enterprises and software for industrial design and manufacture;
  • imposition of notification requirements for the transfer of funds outside the EU by any entity established in the EU that is owned or controlled by an entity established in Russia, or by a Russian national or resident.

Enforcement of oil price cap:

  • strengthened information sharing mechanism to better allow for identification of vessels and entities concealing origin or destination of cargo;
  • notification rules for the sale of tankers to any third country.

Iron and steel:

  • Switzerland added as partner country which applies iron and steel import ban;
  • extends wind down periods for import of specific steel products.

 

Import Control System 2 - Release 3

Economic operators carrying goods by sea, inland waterways, road and rail will have to submit a complete Entry Summary Declaration (ENS) dataset to ICS2. This includes postal and express carriers who transport goods using these modes of transport as well as other parties, such as logistic providers issuing transport documents to their clients, and in certain circumstances also final consignees established in the EU, will have to submit ENS data to ICS2. To meet their ENS data filing obligations, operators will need to update their IT systems and business process and provide adequate training to their staff.

Additionally, they will have to run the mandatory self-conformance testing before their start of operation. The UCC Work Programme 2023 Revision was adopted on 15/12/2023. The publication in the Official Journal is planned in January 2024.