Signaling increased tensions with Russia regarding its alleged intervention in eastern Ukraine, the European Union on June 19 and 22, 2015, took action extending sanctions targeting Russia and Crimea, including measures that prohibit EU persons from investing in or importing from Crimea and measures that restrict certain companies operating in Russia’s energy, defense and financial sectors from accessing European capital and equity markets.
Extension of Economic Sanctions Against Russia
On Monday, June 22, 2015, the Council of the European Union formally extended current economic sanctions against Russia by six months until January 31, 2016, citing continued instability in eastern Ukraine and Russia’s failure to fully implement the Minsk ceasefire agreement signed in February. The sanctions, which were first implemented in July 2014, were amplified in September 2014, and were due to expire on July 31, 2015, include the following measures applicable to EU persons:
- a prohibition on dealing in new bonds, equity or financial instruments with a maturity exceeding 30 days issued by certain targeted Russian banks, energy companies, defense companies and their non-EU subsidiaries
- a prohibition on providing loans or credit with a maturity exceeding 30 days to certain targeted Russian banks, energy companies, defense companies and their non-EU subsidiaries
- export controls restricting exports of dual-use and military goods and technology to Russia
- restrictions on exporting certain services and energy-related equipment and technology to Russia for use in deep water, arctic, and shale oil exploration and production projects.
Extension of Sanctions Targeting Crimea
On June 19, 2015, the Council of the European Union extended sanctions targeting the Crimea region of Ukraine until June 23, 2016. These measures, which are applicable to EU persons, include:
- a general prohibition on imports originating from Crimea and Sevastopol
- a prohibition on investment in Crimea or Sevastopol
- restrictions on providing tourism services in Crimea or Sevastopol
- a ban on exporting to Crimean companies or for use in Crimea certain specified goods and technology related to the transportation, telecommunication and energy sectors or related to the production of oil, gas and mineral resources.
Potential for New U.S. and EU Sanctions Against Russia and Counter-Sanctions
In addition to the extension of current EU sanctions, the United States and European Union are reportedly considering a menu of other sanctions targeting Russia’s energy and financial sectors if the situation in eastern Ukraine continues to deteriorate. According to the Associated Press, these proposed sanctions reportedly include new asset freezes and visa bans, measures designed to curtail Russia’s fuel exports, and restrictions that would bar Russian banks from international financial transactions and limit Russian companies from engaging in business overseas. According to Secretary of State John Kerry, the decision on whether to impose additional sanctions against Russia “depends on what happens on the ground” in eastern Ukraine, and on Russia’s commitment to fully implementing the February Minsk cease-fire agreement.
Additionally, the Associated Press reports that in response to the EU’s extension of current sanctions, Russia has extended its current import ban on dairy products, meat, seafood, vegetables and fruit from the European Union, the United States, and other Western states until June 24, 2016.
To see the Council Decision of June 22, 2015, implementing the extension of current economic sanctions against Russia, click here.
To see the Council Decision of June 19, 2015, implementing the extension of current sanctions targeting Crimea, click here.