New EU Sanctions Target Russian Oil Sector, State-Owned Banks and Military Exports

The European Union (EU) enacted Council Regulation (EU) No 833/2014 (the Regulation), which contains ‘Stage 3’ sanctions against Russia. These sanctions resemble – but in other ways are different – from the latest US sanctions, and they amount to the stiffest anti-Russian actions taken by Europe since the end of the Cold War. Perhaps most significantly, the EU’s new sanctions are targeting sectors in Russia’s economy which are not directly connected to events in Crimea and eastern Ukraine, as seen below:

1. Technology Exports for the Oil Industry. Though the EU will not target Russia’s natural gas sector, it has implemented restrictions on the export to Russia of certain ‘technologies’ used in deep-sea drilling, arctic exploration, and shale oil extraction.

2. Access to EU Capital Markets. Article 5 of the Regulation is restricting access by certain Russian State-owned banks (those which are at least 50 per cent owned by the Russian state), such as Gazprombank, VTB Bank, VEB, Rosselkhozbank and Sberbank, from EU capital markets.

3. Exports to Russia’s Arms Trade. The EU has now barred new contracts for arms imports and exports between the European Union and Russia. Article 2 of the Regulation also prohibits bars exports of dual-use goods and technology to Russia for military-end use.

Further information on the EU’s latest sanctions on Russia can be found here.