European Union has adopted the 14th package of sanctions against Russia
The EU has adopted the 14th package of sanctions against Russia which designates 116 individuals and entities.
Energy measures:
- Prohibits the reloading services of Russian LNG in the EU for the purpose of transshipment operations to third countries; and
- Prohibits new investments and the provision of goods, technology and services for the completion of LNG projects under construction such as Arctic LNG 2 and Murmansk LNG.
Anti-circumvention:
- EU parent companies are required to take best efforts to ensure that third-country subsidiaries do not take part in sanctions circumvention;
- EU entities selling military goods to third countries are required to implement due diligence mechanisms capable of identifying and mitigating risks of re-exportation to Russia; and
- EU entities are required to include contractual provisions to ensure “industrial know-how” transferred to third countries is not used for goods transferred to Russia.
- Finance:
- EU entities operating outside of Russia are prohibited from using the Central Bank of Russia’s specialised financial messaging service and are prohibited from making transactions with specifically listed entities using this service outside of Russia; and
- EU entities are prohibited from making transactions with targeted financial institutions and crypto assets providers when these entities facilitate transactions that support Russia’s defence-industrial base.
Funding of political parties and other organisations:
- EU political parties, foundations, NGOs, and think tanks are prohibited from accepting funding from the Russian state; and
- Media service providers are still allowed to carry out activities in the EU such as research and interviews.
Transports:
- Introduces a prohibition preventing specified vessels from access EU ports and related services – vessels can be specified for transporting Russian military equipment, Ukrainian grain, supporting the Russian energy sector, or circumventing the oil price cap;
- Widens the EU flight ban to apply to non-scheduled flights and flights where Russian persons are in a position to determine the place or time for take-off or landing (which includes for holidays and business meetings); and
- Broadens the prohibition on the transport of goods by road to include EU companies which are owned 25% or more by a Russian individual or entity.
Import/export controls:
- Imposes export restrictions on 61 entities allegedly supporting Russia’s military and industrial complex located in various countries, including China, Kazakhstan, Kyrgyzstan, Türkiye, and the UAE;
- Expands the list of restricted items to include certain machine tools and vehicles;
- Restricts the export of certain chemicals, including manganese ores, rare-earths, plastics, excavating machinery, monitors, and electrical equipment;
- Imposes restrictions on the import of helium from Russia;
- Prohibition on the import of Ukrainian cultural property goods and other goods removed from Ukraine; and
- Liechtenstein is added as a partner country which apply similar iron and steel restrictions on Russia.
Protection of EU operators:
- EU companies are allowed to claim compensation for damages caused by Russian companies due to sanctions implementation; and
- Authorises transaction bans on companies for “meddling with arbitration and court competence”.
Intellectual property rights restrictions:
- Restricts applications for registrations in the EU of certain IP rights by Russian individuals and entities (to offset the actions of the Russian govt in depriving EU entities of IP protection in Russia).
European Union imposes new package of Russia sanctions
The European Union has adopted, 27 May, a human rights-related Russia sanctions package. The Council established a new framework for restrictive measures against those responsible for serious human rights violations or abuses, repression of civil society and democratic opposition, and undermining democracy and the rule of law in Russia. The new regime will allow the EU to target also those who provide financial, technical, or material support for, or are otherwise involved in or associated with people and entities committing human rights violations in Russia. Furthermore, the new sanctions regime introduces trade restrictions on exporting equipment, which might be used for internal repression, as well as on equipment, technology or software intended primarily for use in information security and the monitoring or interception of telecommunication.
European Commission investigation provisionally concludes that electric vehicle value chains in China benefit from unfair subsidies
As part of its ongoing investigation, the Commission has provisionally concluded that the battery electric vehicles (BEV) value chain in China benefits from unfair subsidisation, which is causing a threat of economic injury to EU BEV producers. The investigation also examined the likely consequences and impact of measures on importers, users and consumers of BEVs in the EU. Consequently, the Commission has reached out to Chinese authorities to discuss these findings and explore possible ways to resolve the issues identified in a WTO-compatible manner. In this context, the Commission has pre-disclosed the level of provisional countervailing duties it would impose on imports of battery electric vehicles (‘BEVs') from China. Should discussions with Chinese authorities not lead to an effective solution, these provisional countervailing duties would be introduced from 4 July by a guarantee (in the form to be decided by customs in each Member State). They would be collected only if and when definitive duties are imposed.
European Union AI regulation
The Council of the European Union adopted the world's first artificial intelligence (AI) regulations on Tuesday (May 21). They divide the technology into four categories: high-risk software, limited and minimal impact, and unacceptable systems. The last will be banned in the EU. Models that do not pose a systemic risk, such as chatbots or games, will be subject to minor requirements, mainly regarding transparency. The idea is that users should be aware that they are dealing with artificial intelligence. Additional security requirements will be imposed on manipulated content, known as deepfakes, or AI-generated material designed to mislead the user. These too will have to be clearly labeled.
High-risk systems, such as technologies used in education, AI systems that analyze students' applications for scholarships or university admission, will be allowed on the EU market subject to strict requirements. This means that manufacturers will have to assess their risks before they enter the EU market, and citizens - e.g., students who don't get benefits - will have the right to challenge decisions made using AI.
However, software that poses a clear threat to users' fundamental rights will be banned. These include technologies that allow, for example, monitoring and spying on people or using their sensitive data, such as sexual orientation, origin or religion, to predict their behavior, including so-called criminological prediction, i.e. their risk of committing crimes, or serving them content that could influence their decisions and behavior.
The regulations will be published in the Official Journal of the EU in the coming days and will come into force 20 days after publication. They will take full effect in two years.
EU’s Import Control System
The second release of the EU’s Import Control System (ICS2) went into effect on 3rd June 2024, with the goal of enhancing the user experience through better data processing, advanced security, and a more intuitive interface. ICS2 requires detailed data on imported goods, including 6-digit HS codes, descriptions, and details of the buyer and seller. Businesses importing into the EU, Norway, Switzerland, or Northern Ireland must now submit a complete Entry Summary Declaration (ENS) dataset to ICS2, covering all modes of transport, including postal and express carriers. Non-compliance may lead to delays, disruptions, fines, and penalties.
EU extends Crimea sanctions
The EU has renewed its sanctions regime prohibiting imports from occupied Crimea and Sevastopol until 23 June 2025.
EU Russia human rights sanctions
The Council established a new framework for restrictive measures against those responsible for serious human rights violations or abuses, repression of civil society and democratic opposition, and undermining democracy and the rule of law in Russia. The decision to establish this new sanctions’ regime is part of the EU’s response to the accelerating and systematic repression in Russia. The new regime was proposed by the High Representative for Foreign Affairs and Security Policy, Josep Borrell, after the untimely death of the opposition politician Alexei Navalny in Siberian prison in February.
The new regime will allow the EU to target also those who provide financial, technical, or material support for, or are otherwise involved in or associated with people and entities committing human rights violations in Russia.
Furthermore, the new sanctions regime introduces trade restrictions on exporting equipment, which might be used for internal repression, as well as on equipment, technology or software intended primarily for use in information security and the monitoring or interception of telecommunication.
EU Syria de-listings & renewal of Syria & cyber sanctions regimes
The EU has renewed its Syria sanctions regime until 1 June 2025, removed 5 deceased individuals and 1 other individual, and amended 96 listings. 316 individuals and 86 entities are currently designated on the Syria sanctions list. The EU has renewed its cyber sanctions regime until 18 May 2025 and amended the listings for 6 individuals and 2 entities. 8 individuals and 4 entities are currently designated on the cyber sanctions list.
EU new Platform for Tax Good Governance
On 6 June 2024, the Commission decided to continue the work of the Platform for Tax Good Governance in the form of a new expert group. The Platform for Tax Good Governance brings together non-government and government stakeholders and creates a framework for consultation and exchange of views. It allows for a dialogue in the field of tax good governance and other related areas, for instance on cross-border taxation, aggressive tax planning, double taxation, and double non-taxation. Since its establishment in 2013, the Platform has proven to be an efficient tool in promoting better dialogue with stakeholders for more informed and evidence-based policymaking. The current mandate is coming to an end on 17 June. The new Platform established today will continue the work with revised tasks to reflect on the developments in tax transparency and the fair taxation agenda.
EU designates targets for Russian propaganda
- The EU has designated 2 individuals and 1 entity it says are responsible for conducting propaganda actions in the EU and its neighbouring countries to justify and support Russia’s invasion of Ukraine, including targeting European political parties, asylum seekers, and Russian ethnic minorities.
The 3 targets (all previously autonomously designated by the Czech Republic) are:
- Voice of Europe, an online media outlet which, according to the EU, is engaged in a media manipulation campaign to destabilise Ukraine and the EU (also subject to an EU broadcasting ban);
- Viktor Medvedchuk, a former pro-Russia Ukrainian politician currently living in Russia who allegedly covertly finances Voice of Europe; and
- Artem Marchevskyi, a Ukrainian-Israeli citizen who it is said led Voice of Europe under Medvedchuk's instructions to spread anti-Ukraniain disinformation.
Netherlands Govt consultation on reform of Sanctions Act
The Netherlands is taking responses until 9 August 2024 to its consultation on the replacement of the Sanctions Act 1977 with a new International Sanctions Bill which would (inter alia):
- create a central reporting point for sanctions reports;
- add the ability to make notes in certain public registers about a relationship with a sanctioned person;
- increase civil law enforcement options for sanctions breaches in addition to criminal penalties;
- introduce a system for the management of certain long-term frozen assets; and
- extend the supervision of the Sanctions Act from the financial sector to lawyers, notaries, and accountants.
Netherlands bans entry to Russian food-carrying ships
Under Article 3ea of EU Regulation 833/2014, Russian vessels are prohibited access to any EU territory, but, as an exception to this, Member States may authorise entry to vessels transporting food products. The Dutch Minister of Infrastructure and Water Management has notified the Netherlands Parliament that the govt will stop allowing entry to Russian ships offloading food products at Dutch ports. The decision follows a report by journalists at Pointer that Russian food-carrying ships were being used for espionage.
United Kingdom designates 50 Russia sanctions
The UK has designated 50 individuals and entities on its Russia sanctions list, including shadow fleet vessels, suppliers of munitions, machine tools, microelectronics, and logistics to Russia, and Russian financial institutions including the Moscow Stock Exchange. Link
United Kingdom expands humanitarian exception to Syria petroleum sanctions
The UK has made the Syria Regulations 2024 which amend Reg 57 (exceptions relating to petroleum products) of the Syria Regulations 2019 to:
- Expand the eligibility criteria for reliance on the humanitarian exception from solely UK-funded companies to include international organisations carrying out humanitarian assistance in Syria and bilaterally or multilaterally funded NGOs participating in UN humanitarian response plans;
- Financial service providers for such organisations may now rely upon the humanitarian exception (so no longer need to apply for an individual licence); and
- Widens the scope of the humanitarian exception to apply to ‘acquisitions’ rather than the ‘purchase’ of petroleum products.
United Kingdom expands Russia designation criteria and for specifying ships
The UK has expanded the criteria for designation on the UK’s targeted Russia sanctions set out in Reg 6 of the Russia Regulations 2019, effective 28 May 2024. The new criteria permit the designation of people or entities which who own or control entities which fall within the designation criteria under Reg 6(3)(a)-(g) or who provide financial support to entities which fall within the designation criteria under Reg 6(4)(a)-(e). The UK has expanded the criteria pursuant to which the Secretary of State may specify ships under Reg 57F of the Russia Regulations 2019, effective 28 May 2024. A “specified ship” is prohibited from entering UK ports, barred from UK registration, is not covered by the oil price cap general licence (previous post), and may be detained (subject to SoS’s discretion).
United Kingdom: Customs Declaration Service (CDS) Exports Timeline
The Customs Declaration Service (CDS) was scheduled to replace the Customs Handling of Import and Export Freight (CHIEF) system from 4 June 2024. Officially exporters must now use CDS to file export declarations.
United Kingdom: Second milestone of the Windsor Framework
From 30 September 2024, the full “green lane” will take effect for the movement of all goods between Great Britain and Northern Ireland, expanding the benefits of the UK Internal Market Scheme to end unnecessary bureaucracy. This will ensure that goods will no longer move on the basis of international customs requirements, with a new system based on commercial information. New arrangements will also come into effect for the movement of consumer parcels between Great Britain and Northern Ireland, with a new set of data-sharing requirements put in place to ensure that customs declarations are not needed for deliveries to consumers.
United Kingdom: Third milestone of the Border Target Operating Model
The requirement for Safety and Security declarations for imports into Great Britain from the EU or from other territories where the waiver applies will come into force from 31 October 2024 as set out in the original Target Operating Model. Alongside this, HMRC will introduce a reduced dataset for imports and use of the UK Single Trade Window will remove duplication where possible across different pre-arrival datasets – such as pre-lodged customs declarations.
United Kingdom: Alcohol duty freeze
The government has announced an extension by a further 6 months to the six-month freeze on alcohol duty, until 1 February 2025.
United Kingdom: Fuel duty freeze
The government has announced that it is freezing fuel duty rates for 2024-25. The temporary 5p cut in fuel duty rates will be extended until March 2025. The government has also announced that, following review, it will maintain the difference between road fuel gas and diesel duty rates until 2032.
United Kingdom: Second milestone of the Windsor Framework
From 30 September 2024, the full “green lane” will take effect for the movement of all goods between Great Britain and Northern Ireland, expanding the benefits of the UK Internal Market Scheme to end unnecessary bureaucracy. This will ensure that goods will no longer move on the basis of international customs requirements, with a new system based on commercial information. New arrangements will also come into effect for the movement of consumer parcels between Great Britain and Northern Ireland, with a new set of data-sharing requirements put in place to ensure that customs declarations are not needed for deliveries to consumers.
United Kingdom: Third milestone of the Border Target Operating Model
The requirement for Safety and Security declarations for imports into Great Britain from the EU or from other territories where the waiver applies will come into force from 31 October 2024 as set out in the original Target Operating Model. Alongside this, HMRC will introduce a reduced dataset for imports and use of the UK Single Trade Window will remove duplication where possible across different pre-arrival datasets – such as pre-lodged customs declarations.
United Kingdom: Alcohol duty freeze
The government has announced an extension by a further 6 months to the six-month freeze on alcohol duty, until 1 February 2025.
United Kingdom: Fuel duty freeze
The government has announced that it is freezing fuel duty rates for 2024-25. The temporary 5p cut in fuel duty rates will be extended until March 2025. The government has also announced that, following review, it will maintain the difference between road fuel gas and diesel duty rates until 2032.
United Kingdom: Terminal markets order changes
The government has announced proposed amendments to the VAT Terminal Markets Order (TMO). The TMO is a revenue-neutral tax simplification measure for certain wholesale commodity transactions made by members on named commodity exchanges or market associations, called "Terminal Markets", where certain supplies can be zero rated.
The government plans to update the underpinning TMO legislation to allow for further reform including bringing trades in carbon credits within the scope of the TMO.
United Kingdom: Vaping Products Duty – New levy proposed
The government has announced a consultation into a proposed new levy on vaping products from 1 October 2026. The consultation implies that such a levy will apply at the import or UK manufacturing stage. This is similar to the regime announced for the planned Deposit Return Scheme and there would be processes to ensure credits and drawbacks of duty would apply. The government will also introduce a one-off tobacco duty increase of £2.00 per 100 cigarettes or 50 grams of tobacco at the same time.
United Kingdom: VAT position on electric vehicle charging
HMRC have previously released guidance on the VAT treatment of EV charging and the ability of VAT registered organisations to recover VAT on such costs but have promised further clarification of policy which may be provided in 2024. In the absence of specific guidance, organisations may wish to seek other ways of obtaining comfort on the VAT recovery position for any EVs they have.
United Kingdom: Extension of the UK’s steel safeguard measure
On 4 September 2023, the UK’s Trade Remedies Authority (TRA) initiated an extension review of the steel safeguard measure. The extension review considered whether serious injury would recur to UK steel producers if the measure were removed on any of the 15 product categories.
During the extension review, the TRA considered evidence from both domestic and international industry and organisations. After careful consideration of the facts, they recommended to the Secretary of State for Business and Trade on 19 April 2024 that the measure should be extended on all 15 product categories for a further 2 years, to 30 June 2026. This recommendation was on the basis that UK industry would likely be seriously injured in all 15 product categories if the measure expired.
The Secretary of State for Business and Trade also decided to extend the application of the suspension for Ukraine to 30 June 2026. The extension review conducted by the TRA did not consider the future of the existing suspension for Ukraine as it was beyond the scope of their investigation. The Secretary of State for Business and Trade decided that it was in the UK’s public interest to extend the suspension for Ukraine to 30 June 2026. This decision ensures imports of Ukrainian steel will not be subject to the additional safeguard quotas and duty. This is in line with the UK’s commitment to support Ukraine in the war with Russia. These decisions by the Secretary of State for Business and Trade have been taken with reference to the Ministerial Code and the UK’s wider obligations and following consultation with relevant ministers.
The decisions will come into effect from 1 July 2024. The government will publish a public notice on 30 June 2024 to give effect to these decisions.