The EU has imposed a package of sanctions against Russia with an oil embargo. What it included The

European Union introduced the sixth package of sanctions against RUSSIA. Its key elements are bans on the supply of Russian oil to the EU and facilitating its delivery to third countries. Under sanctionshit NRD,through which the Ministry of Finance services debts

On the afternoon of June 3, the European Union published legal acts imposing new sanctions against Russia, including an embargo on the import of Russian oil and oil products. The previous - the fifth - sanctions package was imposed by the European Union on April 8. Over the past weeks, European countries have been discussing what the sixth package should be like. Hungary secured for itself the opportunity to continue importing Russian oil through the Druzhba pipeline, and also insisted on not including Patriarch Kirill on the sanctions list.

The exact set of restrictions within the sixth package was discussed to the last, as indicated by the following fact: on June 3, the European Commission published a press release, which at first said that the EU prohibits the provision of "cloud services" to Russian legal entities, but then the mention of these services disappeared from the message - as a result, they did not appear in legally binding documents either.

What will the oil embargo look like?

The main parameters of the ban on the import of oil from Russia, going by sea, the European Commission announced earlier this week (RBC wrote about them in detail here). The ban takes effect immediately, but there are transitional periods: until December 5, 2022, “one-off” import transactions or the execution of contracts for the purchase of Russian oil concluded before June 4 are allowed; for petroleum products, similar transactions are possible until February 5, 2023.

The European Union agreed to a partial embargo on oil from Russia. What does it mean Business

EU countries can buy oil and oil products exported from Russia, but produced in another country and not owned by Russians. Such an exception can be made for the Kazakh oil of the Caspian Pipeline Consortium, which is transshipped for EXPORT near Novorossiysk. According to REUTERS, Kazakhstan has already renamed its oil sold through Russian ports to KEBCO so that traders and buyers can distinguish it from the sanctioned Urals.

The embargo does not apply to Russian crude oil, which is supplied to the EU countries via the Druzhba pipeline. Through its northern part, oil goes to Germany and Poland, which have promised to unilaterally stop pipeline deliveries of Russian oil (in 2021, they imported €10 billion worth of oil from Russia in this way, according to Eurostat). Through the southern part of Druzhba, oil goes to the Czech Republic, Slovakia and Hungary (in 2021 they imported €5 billion worth of oil), and these countries will be able to continue these purchases for an indefinite period - until a future decision of the EU Council.

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Bulgaria, Croatia and the Czech Republic were beneficiaries of three other minor exemptions:

Bulgaria was allowed to import oil and oil products from Russia by sea until the end of 2024 under contracts concluded before June 4 (in 2021, the country imported fuel worth €1.3 billion in this way); Croatia will be able to continue purchasing vacuum gasoil from Russia until the end of 2023 (in 2021 it imported it for €73 million, it is needed for a refinery in the city of Rijeka); EU countries receiving oil from Russia via the Druzhba pipeline are prohibited from reselling it to other countries, and from February 5, 2023, it will also be prohibited to sell products made from Russian pipeline oil to other countries (the European Union and beyond). However, the Czech Republic received permission until December 2023 to import diesel fuel obtained from Russian oil in other EU countries, mainly in Slovakia.

In general, in 2021, EU countries imported almost €71 billion worth of Russian oil and oil products, of which almost €65 billion worth of supplies will generally be stopped by the end of 2022.

Is there a ban on oil shipping insurance

Experts warned that simply banning Europeans from buying Russian oil would only divert much of the trade to non-sanctioned countries such as India and CHINA , which have already ramped up their oil purchases from Russia in recent months. Therefore, the EU has introduced an element into its embargo that affects the supply of Russian oil to third countries. The decision of the Council of the EU "introduces a ban <...> on insurance and reinsurance of maritime transport of such goods [oil and oil products] to third countries", according to the Official Journal of the EU.

Why the ban on insurance of tankers with Russian oil is dangerous Economics

The sanctioning regulation itself does not explicitly state this prohibition – it refers to the prohibition to provide “technical assistance, intermediary services or financing or financial support” in relation to the transportation to third countries, including transshipment from ship to ship, of oil and oil products of Russian origin . However, "financing or financial assistance" includes all types of insurance and reinsurance, follows from the definitions of the European Union relating to sanctions against Russia.

Western business media reported this week that the UK has decided to join the ban on Russian oil shipping insurance (no official announcement as of the evening of June 3). As RBC wrote, Britain is a leading player both in the field of shipowner's liability insurance (P&I) and in the field of ship insurance (H&M). The International Group of P&I Clubs, or IG P&I, is based in London, and seven of its 13 associated clubs are also based in the British capital. Without insurance coverage provided by one of the IG P&I clubs, tankers may be denied entry to ports, although a possible solution is government guarantees or the use of the services of “smaller insurance markets”,

European insurers can continue to provide insurance coverage for the transportation of Russian oil only until December 5 under contracts concluded before June 4.

Economists at the Institute of International Finance (IIF) estimate that by the end of 2022, Russia will be able to redirect 20-40% of the oil destined for Europe to China, Elina Rybakova, deputy chief economist at the IIF, said.

Who was subject to personal sanctions

The EU expanded the sanctions list to include 65 individuals and 18 organizations. Including businessmen Eduard Khudainatov, Arkady Volozh, chairman of the board of directors of the National Media Group Alina Kabaeva (the EU claims that she is "closely connected with President Vladimir Putin"), as well as Marina Mordashova, who in the EU is called the wife of billionaire Alexei Mordashov ( was on the European sanctions list at the end of February) and Alexandra Melnichenko (née Alexandra Nikolic, citizen of Serbia) - the wife of the former beneficiary of the fertilizer manufacturer Eurochem Andrey Melnichenko. The assets of these persons in the jurisdiction of the EU countries should be frozen, they are prohibited from entering the EU.

This approach prevents blacklisted businessmen from transferring their assets to their wives. On the day of the introduction of EU sanctions against him, Mordashov, who owned a 34% stake in the German tour operator TUI through the Cypriot Unifirm, transferred 29.9% of the shares of TUI to Ondero Limited, a company registered in the British Virgin Islands, whose beneficiary was later named Marina Mordashova. Then she became the main beneficiary of Nordgold. In March, German authorities launched an investigation into the deal with the TUI package, blocking these shares until the end of the audit. The European Union allows sanctioned Russians to sell shares of European companies until October 9, 2022, subject to the freezing of funds paid for the asset.

Also under the blocking sanctions were Sukhoi, a manufacturer of trucks KAMAZ (its vehicles are used by the Russian Armed Forces in a special operation in Ukraine, the EU explains), UAZ, Independent Insurance Group (according to the EU, it specializes in insurance of defense enterprises, Rostec), "Voentorg" and "Voentelecom". Separately, as part of the sanctions against Belarus, the EU imposed similar sanctions against Belaruskali and the Belarusian Potash Company (BPC).

What threatens sanctions against the National Settlement Depository

The EU has imposed sanctions on the National Settlement Depository (NSD), the largest securities depository in Russia and, as the EU notes, "the only one with access to the international financial system." In justifying the sanctions, the European Union indicated that NSD is almost 100% owned by the Moscow Exchange (not included in the list), which, in turn, “through its role and shareholders is highly controlled” by the Russian authorities.

After the US decision to ban the Russian Ministry of Finance from servicing external public debt and Citibank's refusal to act as a paying agent for Russia's sovereign Eurobonds, NSD assumed this function for at least some of these securities, the Ministry of Finance reported on June 2. Ruble payments to foreign investors were supposed to go through NSD and conversion into currency was to be carried out. Now this task is much more difficult. Following the announcement of the sanctions, NSD declared an emergency and suspended transactions in euros (such banking transactions must go through a European correspondent bank, which is now required to freeze euros associated with NSD).

NSD still has chances to continue making payments on sovereign Eurobonds: the EU sanctions regulations provide that the competent authorities of European countries can unfreeze payments from sub-sanctioned structures if such a payment is a consequence of “an obligation that arose for such an structure before it was entered” into the sanctions list.

Russian investors in foreign securities may also suffer from sanctions against NSD. Since the end of February, the so-called inter-depository bridge of NSD - Euroclear (European Central Depository) has not been working (calculations, if any, were carried out only on an individual basis). In the interests of Russian investors, NSD keeps currency papers on an account with Euroclear, and the latter, not having information about the identity of Russian investors, cannot authorize payments to them, fearing a violation of the sanctions regime. Now, it appears that NSD-served investors will lose their income from foreign exchange securities altogether, unless sanctions against the Russian depository are lifted.

What else has the European Union banned?

The EU also expanded the list of individuals subject to restrictions on the export of dual-use goods and expanded the list of goods and technologies prohibited from sale to Russia, as they could contribute to the technological improvement of the Russian defense and security sector. Among them are 80 chemicals that can be used to produce chemical weapons.

In addition, the EU prohibits the provision of accounting, public relations (PR) and consulting services to Russian authorities and legal entities. Previously, the authorities of the United States and Great Britain banned such services from Russia to their companies.

According to the Bank of Russia, in 2020 (data for 2021 are not yet available), Russian residents purchased audit, accounting and tax optimization services from the European Union for $107 million, and consulting and public relations services for $922 million.

The EU also toughened the responsibility of its citizens and companies for violations of the sanctions regime against Russia, ordering that European countries should set out rules for punishing such acts, including “criminal punishment” (this clause did not exist before). Countries should also ensure that appropriate measures are taken to "confiscate the proceeds of such violations".

What concessions did the EU make

During the previous round of sanctions, the European Union banned Europeans from May 10 from providing the services of an attorney, nominee shareholder, DIRECTOR, secretary for trusts, the founders or beneficiaries of which are Russians. However, the EU has now extended the deadline for Europeans to terminate their relationship with Russians in the area of ​​trusts until July 5th.

Earlier, the European Union also banned any transactions with Russian companies controlled by the state (this list includes the United Aircraft Corporation, Uralvagonzavod, Rosneft, Transneft, Gazprom Neft, Rostec, Sovcomflot, etc.), making exceptions for purchases of gas, titanium, aluminum, nickel, palladium, iron ore, as well as interaction with energy projects outside of Russia, where the Russian state-owned company is only a minority shareholder. Now, transactions “related to the provision of electronic communications services, data centers”, as well as equipment necessary for the provision of such services, have been added to the number of permitted forms of cooperation. Also, as an exception, the assets and financial resources of Russian individuals and companies that are on the sanctions list are not subject to freezing.

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