Eleventh package of restrictive measures against Russia: beware of export diversions, particularly for products containing semi-conductors!

Since the beginning of the Russian invasion of Ukraine, a number of economic and individual measures – known as “sanctions packages” – have been taken by the European Union. In total, 11 packages of sanctions are now in force within the European Union, the Member States having recently agreed on the eleventh package, with the aim to prevent goods which export to Russia is banned from being diverted from their intended destination and ultimately delivered to sanctioned Russian parties.

By way of illustration, it appears that Russian industry uses the semi-conductors contained in household electrical equipment for military purposes. However, as a result to the introduction of the previous sanctions packages, the volume of exports of household electrical goods to Russia has logically fallen sharply, but exports of the same types of goods to Turkey, Kazakhstan, Uzbekistan, Georgia, Armenia and Kyrgyzstan have increased significantly in parallel.

To fix this problem, the eleventh package of sanctions includes new individual measures targeting a large number of entities established in China, Uzbekistan, the UAE, Syria and Armenia, suspected of directly supporting Russia’s military and industrial complex and of participating in the circumvention of sanctions already in place.

In addition, the eleventh package also extends the list of regulated products likely to contribute to the technological improvement of the Russian defense and security sector, such as: electronic components, semi-conductor materials, manufacturing and testing equipment for electronic integrated circuits and printed circuit boards, precursors of energetic materials and precursors of chemical weapons, optical components, navigation instruments, metals used in the defense sector and marine equipment.

In addition to the main purpose of combating the circumvention of sanctions, the eleventh package:

  • Extends the suspension of broadcasting licences to five additional media outlets under Russian control;
  • Prohibits the transport of goods in the EU by road to trailers and semi-trailers registered in Russia, including when they are pulled by tractors registered outside Russia;
  • Prohibits access to EU ports and locks for any ship carrying out ship-to-ship transfers, if the authorities suspect that the ship breaches the ban on the import of Russian crude oil and petroleum products;
  • Provides for the end of the derogation hitherto granted to Germany and Poland for the supply of crude oil via the northern section of the of the Druzhba pipeline.

By further extending the list of controlled products and listed entities, the eleventh sanctions package proportionally increases the scope of operators required to carry out screening due diligence, and more generally calls for strengthening the procedures for determining the ultimate beneficiaries.

For those interested with these matters, the EU Commission has recently updated its consolidated FAQs: Consolidated version – Frequently asked questions concerning sanctions adopted following Russia’s military aggression against Ukraine and Belarus’ involvement in it. (europa.eu)

Our Team is also at your disposal to help determining the consequences of the eleven sanction packages in force, and more generally to better understand export control regulations.

Tags: ,
Vanessa Irigoyen

With more than 16 years of experience, Vanessa has extensive expertise in the implementation of international efficiency business models for customs, export control and indirect tax purposes. Her functions notably […]

Bérenger Richard

Bérenger is attorney-at-law at the Bar of the Hauts-de-Seine. He has 10 years of experience as French VAT, customs and other indirect taxes pracioneer with Deloitte Société d’Avocats. He has […]

Guillaume Dandurand

I am a Senior in the French Indirect Tax Team