EU Prolongs Sanctions Regime Misappropriation of Ukrainian state funds

On 03 March 2017, the EU Council decided to extend the asset freezes against 15 people that it holds responsible for the misappropriation of Ukrainian state funds or for the abuse of office causing a loss to Ukrainian public funds. After the annual review of the restrictive measures, one was removed from the list.

The asset freezes were initially introduced in March 2014, and since been extended. The legal acts are expected to be published in the Official Journal on 4 March 2017.

Overview EU Ukraine Related Sanctions

Source: EU website

Diplomatic measures

The EU-Russia summit was cancelled and EU member states decided not to hold regular bilateral summits. Bilateral talks with Russia on visa matters as well as on the New Agreement between the EU and Russia were suspended. Instead of the G8 summit in Sochi, a G7 meeting was held in Brussels on 4-5 June 2014. Since then, meetings have continued within the G7 process. EU countries also supported the suspension of negotiations over Russia’s joining the OECD (The Organisation for Economic Co-operation and Development) and the International Energy Agency.

Individual restrictive measures

Asset freeze and travel restrictions

152 people and 37 entities are subject to an asset freeze and a travel ban over their responsibility for actions which undermine or threaten the territorial integrity, sovereignty and independence of Ukraine.  On 15 September 2016 the Council prolonged these measures until 15 March 2017

Misappropriation of Ukrainian state funds   

In March 2014, the Council decided to freeze the assets of individuals identified as responsible for the misappropriation of Ukrainian state funds. These measures were last extended in March 2017.

Restrictive measures in response to the illegal annexation of Crimea and Sevastopol

As a consequence of the EU’s non-recognition policy of the illegal annexation of Crimea and Sevastopol by Russia, the Council imposed substantial restrictions on economic relations with Crimea and Sevastopol.

These measures include an import ban on goods from Crimea and Sevastopol, imposed in June 2014, as well as restrictions introduced in July 2014 on trade and investment related to certain economic sectors and infrastructure projects. 

In addition, a full ban on investment has been in place since December 2014, along with a prohibition to supply tourism services in Crimea. Exports of further key goods for certain sectors are also banned, including equipment for the prospection, exploration and production of oil, gas and mineral resources.

On 17 June 2016, the Council extended these measures until 23 June 2017.

‘Economic sanctions’: measures targeting exchanges with Russia in specific economic sectors

In July and September 2014, the EU imposed economic sanctions targeting exchanges with Russia in specific economic sectors.

In March 2015, EU leaders decided to align the existing sanctions regime to the complete implementation of the Minsk agreements, which was foreseen for the end of December 2015. Since the Minsk agreements were not fully implemented by 31 December 2015, the Council extended economic sanctions until 31 July 2016.

In July 2016, having assessed the implementation of the Minsk agreements, the Council prolonged the sanctions until 31 January 2017.

The European Council, meeting on 15 December 2016, assessed the implementation of the Minsk agreements and paved the way for a Council decision to extend the sanctions for the next 6 months, until 31 July 2017. The Council adopted this decision on 19 December 2016 by written procedure.

These restrictive measures:

  • limit access to EU primary and secondary capital markets for 5 major Russian majority state-owned financial institutions and their majority-owned subsidiaries established outside of the EU, as well as three major Russian energy and three defence companies
  • impose an export and import ban on trade in arms
  • establish an export ban for dual-use goods for military use or military end users in Russia
  • curtail Russian access to certain sensitive technologies and services  that can be used for oil production and exploration

Measures concerning economic cooperation

Restrictions on economic cooperation were introduced by EU leaders in July 2014:  

  • the EIB was requested to suspend the signature of new financing operations in the Russian Federation 
  • EU member states agreed to coordinate their positions within the European Bank for Reconstruction and Development (EBRD) Board of Directors with a view to also suspend the financing of new operations
  • the implementation of EU bilateral and regional cooperation programmes with Russia was re-assessed and certain programmes suspended

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