As on 15th March, The EU adopted a fourth package of restrictive measures against Russia in response to its brutal aggression against Ukraine and its people. These sanctions will further ramp up economic pressure on the Kremlin, and undercut its technological base and curtail its ability to finance its invasion of Ukraine.
When imposing specific sanctions, the EU selects the most appropriate and targeted measures to achieve the goals pursued by the sanctions regime. It also takes into account possible indirect effects on EU operators complying with the measures. In this case, the EU considered that the measure was most effective by selecting specific transactions with certain State-owned companies. In any event, EU sanctions are scalable and, as the intense activity of the past weeks shows, they are scaled up depending on the situation on the ground.
This EU measure has been coordinated closely with international partners. It is for the United States to announce the exact measure they will be adopting.
The list of steel products covered is referred to in Annex 2 of the Amending Regulation, as published in the Official Journal of the EU. Iron products are not covered.
The investment ban on the Russian energy sector is far-reaching and comprehensive. Yet, some transactions are needed to ensure the supply of certain energy products into the EU. To ensure close scrutiny, such investments are subject to prior approval from the national competent authorities in the EU.
The ban covers a large range of luxury goods, from luxury cars to products for domestic use to watches, to give a few examples.
There are different thresholds depending on the category of luxury goods, so that the ban does not hit the more regular needs of the population in Russia. The minimum threshold is €300.
The ban will be implemented by the EU's customs authorities: banned products are not allowed to be exported to Russia.
No, the focus of this package of sanctions is on depriving Russia from EU luxury goods.
Under the current Regulation, there is already a clear prohibition from circumventing the restrictive measures including via third countries. It constitutes a violation of sanctions.
The sanctions package adopted on 9 March 2022 fully clarifies that crypto assets fall under the scope of “transferable securities”. It also confirms the common understanding that loans and credit also include crypto assets. These clarifications will help ensure the proper implementation of the restrictions in place.
The circumvention of the restriction on some banks to use SWIFT is theoretically possible via crypto-assets or by other means. However, it is not immediately possible to do so in a timely and efficient manner. Markets are broadly aware of this. At first sight, it might be that the use of crypto to avoid sanctions is more relevant for our restrictions on capital outflows from Russia.
While sanctions evasion via crypto currencies is harder to detect in the first place, once detected it is easy to investigate because crypto transactions are fully traceable and it is practically impossible to alter that.
If and when large amounts of crypto assets are converted to fiat currencies (and vice versa), these transactions will fall under anti-money laundering due diligence rules.
We continue to constantly monitor the market situation. Any indications for non-compliance with the sanctions will be looked at by the relevant authorities in the Member States.
Removal of MFN status means suspending the benefits that come from being a WTO Member, more specifically the benefit of not being discriminated against by other Members. For example, MFN treatment guarantees that a Member will not be subject to higher tariffs than other Members, or to import bans that do not apply to other Members. Suspension of MFN treatment means that the Member concerned – in this case Russia – may be subject to higher tariffs and import bans.
The EU has decided to act not through an increase on import tariffs, but through set of sanctions that comprise bans on the imports or exports of goods, as this is much quicker and more effective than preparing a completely new tariff schedule from scratch.
In practice, the EU has already removed a number of trade benefits that Russia previously enjoyed through the imposition of sanctions. Additionally, the EU has restricted the provision of SWIFT financial services to certain Russian banks, which constitutes a disapplication of MFN vis-à-vis Russia under the General Agreement on Trade in Services (GATS). Today's sanctions remove further trade benefits from Russia.
The institutions consist of the International Monetary Fund, the World Bank Group, the European Bank for Reconstruction and Development (EBRD), and the Organisation for Economic Co-operation and Development (OECD). While Russia's membership of these institutions cannot often be suspended as such, the EU is working with its international partners to prevent Russia from obtaining financing from these institutions. For example, the EU is working with its partners to make sure that the EBRD suspends Russia and Belarus' access to EBRD finance and expertise.
As announced by the G7, an International Task Force has started its work on sanctions implementation, for example the enforcement of asset freezes against listed individuals. Within the Commission, Commissioner Reynders leads the “Freeze and Seize” Task Force, which coordinates work done at national level by law enforcement authorities, prosecution services and judicial authorities, to identify, freeze and, where possible, confiscate assets of Russian and Belarussian individuals subject to EU sanctions. The Commission's Task Force seeks coordinated actions between Member States, Eurojust and other agencies, such as Europol and eu-LISA. It works closely with international partners, including the International Task Force.