Regulatory Compliance updates 05/22

Published on May 23, 2022

Australia: Russia sanctions regime

Australia imposes autonomous sanctions in relation to Russia in response to the Russian threat to the sovereignty and territorial integrity of Ukraine. They were first imposed in 2014 and extended in 2015 and 2022. Australia imposes other autonomous sanctions in relation to the specified Ukraine regions in response to the Russian threat to the sovereignty and territorial integrity of Ukraine. Go to the Specified Ukraine Regions Sanctions Regime and the Ukraine Sanctions Regime for further information. Australia will also extend to the Donetsk and Luhansk regions of Ukraine the sanctions measures already applied to Crimea and Sevastopol. These sanctions measures target exports and commercial activity in relation to the transport, telecommunications, energy and exploitation of oil, gas and mineral reserve sectors; and prohibit all imports. These sanctions measures will apply to the Donetsk and Luhansk regions of Ukraine from 28 March 2022. This will allow Australians and Australian entities with interests in those regions to consider whether their activities are captured by the sanctions measures; and if they are, either to cease their activities, or to apply to the Minister for Foreign Affairs for a sanctions permit to continue their activities. The Regulations also include a power for the Minister to specify other areas of Ukraine, should they fall under Russian influence, to which these sanctions measures would then apply. 

The Australian Government introduced new manufacturing, labelling and packaging requirements for medicinal cannabis products manufactured or supplied

The Australian Government introduced new manufacturing, labelling and packaging requirements for medicinal cannabis products manufactured or supplied in Australia, under amendments to the Therapeutic Goods (Standard for Medicinal Cannabis) (TGO 93) Amendment Order 2022 (Amendment Order), effective as of 28 March 2022.

The Amendment Order:

  • Creates a level playing field for imported and domestically produced medicinal cannabis products.
  • Prohibits use of synthetic and modified cannabinoids in medicinal cannabis products.
  • Brings much needed clarity on quality requirements for importers of plant material and overseas manufacturers of medicinal cannabis products.
  • Clarifies labelling and child resistant packaging requirements.
  • Promotes greater transparency regarding the active ingredients, reliability of information on labels and other important features of medicinal cannabis products.

China: once again extends extra tariff exclusion against import US commodities

The Tariff Schedule Committee of China formally announce to extend the first batch of first and second groups once again of extra tariff exclusion against import US commodities. The last exclusions were published in Tariff Schedule Committee announcement [2021] No. 7, [2020] No. 8 and [2021] No.2, which expired on April 16,2022. Adapted to the context, Tariff Schedule Committee has decided in accordance with procedures to extend the exclusion period for the above-mentioned commodities. As for the 81 items listed in the Annex, China will continue to suspend retaliatory tariff imposed in response to the US Section 301 Measures from Apr 17, 2022 to November 30,2022. 

EU takes steps to suspend all duties on imports from Ukraine

The European Commission has proposed to suspend for one year import duties on all Ukrainian exports to the European Union. The proposal, which is an unprecedented gesture of support for a country at war, would also see the suspension for one year of all EU anti-dumping and safeguard measures in place on Ukrainian steel exports. This far-reaching step is designed to help boost Ukraine's exports to the EU. It will help alleviate the difficult situation of Ukrainian producers and exporters in the face of Russia's military invasion. 

EU: Russia removed from the list of EU export authorisations for dual-use goods and technology

Having regard to Regulation (EU) 2021/821 of the European Parliament and of the Council of 20 May 2021 setting up a Union regime for the control of exports, brokering, technical assistance, transit and transfer of dual-use items (1), and in particular Article 17(2) thereof, Whereas:

  1. In light of Russia’s illegal attack on Ukraine’s territorial integrity, sovereignty, and independence and the respective threats to the Union’s essential security interests, the Union decided to impose further restrictions on exports of dual-use goods and technology and on the provision of related services. Council Regulation (EU) 2022/328 (2) imposes, amongst others, restrictions on exports of dual-use goods and technology and on the provision of related services. Council Regulation (EU) 2022/394 (3) further imposes export restrictions on navigation goods and technologies. Council Regulation (EU) 2022/428 (4) imposes export restrictions on equipment, technology and services for Russia’s energy industry (excluding nuclear industry and the downstream sector of energy transport). Council Regulation (EU) 2022/576 (5) imposes additional export restrictions on a range of advanced technologies.
  2. Regulation (EU) 2021/821 introduces eight Union general export authorisations for exports of certain items to certain destinations under specific conditions and requirements. Currently, three Union general export authorisations can be used for exports to Russia: EU003 (re-export of items after repair or replacement in the EU), EU004 (export of items for fairs or exhibitions), EU005 (exports of telecommunications equipment).
  3. In view of the Union’s actions against Russia, it is appropriate to remove Russia from the destination lists of Union general export authorisations Nos EU003, EU004 and EU005 in order to prevent Russia from gaining access to critical technologies and dual-use items.
  4.  Regulation (EU) 2021/821 should therefore be amended accordingly.

In view of the direct threat to European peace and security posed by the conflict, there exist imperative grounds of urgency for removing Russia from the scope of Union general export authorisations Nos EU003, EU004, and EU005. For that reason, the urgency procedure provided for in Article 19(1) of Regulation (EU) 2021/821 should apply and this delegated act should enter into force on the day following that of its publication in the Official Journal of the European Union.
This Regulation entered into force on the 3rd May 2022 following that of its publication in the Official Journal of the European Union. 

EU adopts fifth round of sanctions against Russia over its military aggression against Ukraine

In light of Russia’s continuing war of aggression against Ukraine, and the reported atrocities committed by Russian armed forces in Ukraine, the Council decided to impose a fifth package of economic and individual sanctions against Russia. The agreed package includes a series of measures intended to reinforce pressure on the Russian government and economy, and to limit the Kremlin’s resources for the aggression.

The package comprises:

  • a prohibition to purchase, import or transfer coal and other solid fossil fuels into the EU if they originate in Russia or are exported from Russia, as from August 2022. Imports of coal into the EU are currently worth EUR 8 billion per year.
  • a prohibition to provide access to EU ports to vessels registered under the flag of Russia. Derogations are granted for agricultural and food products, humanitarian aid, and energy.
  • a ban on any Russian and Belarusian road transport undertaking preventing them from transporting goods by road within the EU, including in transit. Derogations are nonetheless granted for a number of products, such as pharmaceutical, medical, agricultural and food products, including wheat, and for road transport for humanitarian purposes.
  • further export bans, targeting jet fuel and other goods such as quantum computers and advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment, and new import bans on products such as: wood, cement, fertilisers, seafood and liquor. The agreed export and import bans only account for EUR 10 billion and EUR 5.5 billion respectively.
  • a series of targeted economic measures intended to strengthen existing measures and close loopholes, such as: a general EU ban on participation of Russian companies in public procurement in member states, the exclusion of all financial support to Russian public bodies. an extended prohibition on deposits to crypto-wallets, and on the sale of banknotes and transferrable securities denominated in any official currencies of the EU member states to Russia and Belarus, or to any natural or legal person, entity or body in Russia and Belarus.

European Parliament announces the sixth package of sanctions against Russia

Speaking at the European Parliament plenary session, President of the Commission Ursula von der Leyen announced the sixth package of EU sanctions against Russia in response to its invasion of Ukraine. She proposed a gradual ban on the import of all Russian oil. The package also includes measures against Russia’s military officers, three major banks and certain TV channels. These measures are smart and targeted, hitting Russia where it hurts (with maximum impact on the Russian political elite) and are well coordinated with our allies.

The sanctions are listed below.

  1. Individual listings of people and entities
  2. Financial sector sanctions
  3. Energy sector sanctions
  4. Transport Sector:
  5. Excluding Russia from public contracts and European money
  6. Visa measures

European Parliament announces sanctions against Belarus

A package of sanctions against Belarus hitting their most important sectors and individuals supporting the Russian war effort. Sanctions to close existing loopholes and impose further import and export restrictions on key economic sectors:

  • Terminating the exemption for contracts concluded prior to the adoption of existing sanctions.
  • Adding new import prohibitions on potash, wood, cement, iron and steel, and rubber products and export prohibitions on certain types of machinery, dual-use goods and technology, as well as other advanced goods and technology which might contribute to Belarus’ military, technological, defence and security development.
  • targeted restrictive measures on high ranking members of Belarusian military personnel.
  • SWIFT prohibitions similar to those for Russia, and further expanding the existing financial restrictions, in line with the measures already in place regarding Russia sanctions.

WTO accession process
In light of Belarus’ material support to the Russian invasion, its accession process is suspended and the EU will not participate in any accession-related work. This was confirmed in a joint statement with other like-minded WTO members on 22 March.
Fact: The sanctions will significantly reinforce the current sectoral measures, targeting 5 of the top 10 export sectors of the Belarusian economy and the most important EU exports to Belarus. The measures will now cover almost 70% of all Belarusian exports to the EU.

”Freeze and Seize” Task Force
The Commission has set up a “Freeze and Seize Task Force” to explore the links between assets belonging to persons listed under EU sanctions and criminal activities. While investigations and prosecutions are the responsibility of Member States, the aim of the Task Force is to strengthen coordination that is needed at operational level to ensure the effective enforcement of EU sanctions across all Member States.
The Task Force is composed of the representatives of the Commission, contact points from each Member State, Eurojust and Europol. It will coordinate its work with the “Russian Elites, Proxies, and Oligarchs (REPO) Task Force” set up between the G7 countries, Australia and the European Union. It will meet weekly and will remain operational for the time necessary. 

Russia’s Sberbank to appeal against Ukraine’s move to seize its assets

Russia’s top lender Sberbank (SBER.MM) said that it was initiating investment arbitration proceedings against Ukraine after its parliament approved a presidential decree allowing for the forced seizure of Sberbank-owned assets in the country. Ukraine’s parliament, or Rada, approved President Volodymyr Zelenskiy’s decree that allows Ukraine to forcibly seize the assets of Sberbank-owned International Reserve Bank. The decree also allows the seizure of a subsidiary of Russian state development bank VEB, Prominvestbank. 

Switzerland: Further EU sanctions against Russia implemented

In view of Russia’s ongoing military aggression in Ukraine, the Federal Council enacted further sanctions against Russia and Belarus on 27 April. This implements the Federal Council's decision of 13 April to adopt the EU's latest package of sanctions. The measures come into force at 6pm on 27 April 2022.
With the decision of 27 April, Switzerland is implementing the new measures decided by the EU on 8 April in view of Russia's ongoing military aggression in Ukraine. The Federal Department of Economic Affairs, Education and Research (EAER) had already updated the list of sanctioned individuals, companies and entities on 13 April, resulting in the sanctioning of over 200 further individuals and entities. The Federal Council took the decision to adopt the EU's fifth package of sanctions at its meeting on 13 April. Following an analysis of the EU texts and in cooperation with the other agencies involved, the EAER prepared the incorporation of the measures into Swiss law and the amendments to the Ordinance on measures in connection with the situation in Ukraine and the Ordinance on measures against Belarus.
The new measures include far-reaching sanctions on goods, including a ban on imports of lignite and coal as well as on goods that are important sources of revenue for Russia (e.g. timber, cement, seafood, caviar). In addition, there are export bans on goods that can help strengthen Russia's industrial capacities (e.g. industrial robots or certain chemical products). On 27 April, the Federal Council also adopted an amendment to the Ordinance on measures against Belarus (SR 946.231.116.9). The bans on the export of banknotes and the sale of securities to Belarusian nationals or residents or entities are extended to all official currencies of EU Member States. Until now, only securities and banknotes in Swiss francs and in euros were affected (the same measure is also planned for Russia). The new measures came into force at 6pm on 27 April 2022. 

Swiss implement further EU sanctions against Russia, Belarus

Switzerland has implemented more European Union sanctions against Russia and Belarus, in steps designed to reduce the countries' ability to raise funds or expand their industrial capacity. The new measures include an import ban on lignite, coal and other items such as caviar, timber and seafood which are seen as important sources of revenue for Russia. Also banned are exports to Russia of Swiss goods such as industrial robots and certain chemicals which could be used to strengthen Moscow's industrial production. Further financial sanctions will also come into effect, including no longer allowing trusts to be registered in Switzerland for resident Russian nationals. 

US President Joe Biden to sign bills to scrap Russia, Belarus trade status

The President signed into law two bills suspending normal trade relations with Russia and Belarus and banning the import of Russian energy products.  Both measures passed Congress by an overwhelming majority in the US House of Representatives and unanimous votes in the US Senate. President Biden issued an Executive Order (“EO 14066“) that bans the importation of Russian oil, liquefied natural gas, and coal.  EO 14066 also bans new US investment in Russia’s energy sector and prohibits US financing for foreign companies investing in Russian energy. This law statutorily bans the import of Russian oil and energy products into the United States (specifically, all products under Chapter 27 of the Harmonized Tariff Schedule (“HTS”)), requiring that it be done in a manner consistent with EO 14066.