The website of the European Council publishes the current details of the sanctions imposed against the Russian Federation.

Restrictive measures of the EU as a response to the crisis in Ukraine:
https://www.consilium.europa.eu/de/policies/sanctions/restrictive-measures-ukraine-crisis/history-ukraine-crisis

Restrictive measures against Belarus:
https://www.consilium.europa.eu/de/policies/sanctions/restrictive-measures-against-belarus/

Further information is published regularly on the websites of the Federal Ministry for Economic Affairs and Climate Action and the Federal Office for Economic Affairs and Export Control. An overview of the sanctions against Russia (including earlier sanctions) can also be found on the website of Germany Trade & Invest (GTAI).

The central contact point for information about all export restrictions is the Federal Office for Economic Affairs and Export Control, which has set up a hotline: +49 6196 9081237. If companies have questions about a planned export project, recipients in Russia or Belarus, or the categorisation of products, they should use the “Sonstige Anfrage” (Other Query) form in the ELAN-K2 export system of the Federal Office for Economic Affairs and Export Control. If you have fundamental legal questions, please email: ru-embargo@bafa.bund.de. Further information from the Federal Office for Economic Affairs and Export Control can be found here about Russia and here about Belarus.

The sanctions adopted by the EU are precisely targeted. In particular, they comprise export restrictions, measures relating to the financial sector, and listings of persons and entities. Listings mainly result in entry bans, freezing of assets and a ban on the provision of economic resources.

Yes, the overview of information for companies and associations can be found here.

There is not a total embargo. The sanctions adopted by the EU are precisely targeted and the result of careful political consideration. The intention is to impose great economic pressure on the Russian Federation whilst keeping the damage to the European economy as small as possible. It also means that business relations that are not prohibited are still permitted.

Consolidated texts of the key EU regulations on the sanctions against Russia have been published in the EU’s EUR-lex legal information system:

Regulation (EU) 833/2014
Regulation (EU) 269/2014

The consolidated texts, which include the amendments to the regulations up until 14 April 2022, are not legally binding and are not (yet) available in all EU languages, but greatly facilitate an understanding of the texts.

The Sanctions Regulations (EU) 833/2014 (sectoral sanctions), (EU) 269/2014 (listings of persons and entities) and (EC) 765/2006 are supplemented and amended by amending and implementing regulations. Regulation (EU) 2022/263 (trade embargo on the Donetsk and Luhansk oblasts) stands alone.

All statutory instruments of the EU can be found at eur-lex.europa.eu.

No. The new EU sanctions regulations are directly effective in Germany.

The new EU sanctions regulations, to the extent that they refer to listings of persons and entities, took effect on their day of publication in the Official Journal, and, where they contain sectoral sanctions, on the day following their publication in the Official Journal. Some of the prohibitions, e.g. in Regulation (EU) 2022/328, provide for grandfathering arrangements or wind-down deadlines. In certain cases, this means that contracts concluded prior to the entry into force of the new sanctions can still – at least until certain deadlines – be performed. The exclusion of certain Russian banks from the SWIFT system took place on 12 March 2022.

In principle, the new sanctions apply to existing and new business transactions from the time they enter into force. However, some sanctions regulations contain grandfathering clauses on existing contracts or deadlines for winding down these contracts. In certain cases, this means that contracts concluded prior to the entry into force of the new sanctions can still – at least until certain deadlines – be performed.

Yes. Compliance with statutory requirements – including rules on sanctions – must be ensured by you. If you are unsure whether a specific transaction is compliant with the EU sanctions, you should take legal advice.
If you are unsure whether a specific product is covered by the product-specific lists of prohibitions in the new sanctions regulations, you can contact the Federal Office for Economic Affairs and Export Control here for technical advice.

Violations of EU sanctions are crimes or administrative offences. Details can be found in particular in sections 18, 19 of the Foreign Trade and Payments Act and section 82 of the Foreign Trade and Payments Ordinance.

Each EU Sanction Regulation stipulates its geographical and personal scope of application in a specific provision. The new sanctions apply in particular

  • to persons who possess a citizenship of a Member State, both within and outside the territory of the EU;
  • to legal persons, entities and bodies established or registered under the law of a Member State both within and outside the territory of the EU, and
  • to legal persons, entities and bodies relating to transactions that are wholly or partly carried out in the EU.

In view of Russia’s attack on Ukraine, the Federal Government has suspended the provision of export credit guarantees (“Hermes insurance”) and investment guarantees from the Federation for Russia and Belarus since 24 February 2022 until further notice. No applications for export credit guarantees and investment guarantees are being processed for these countries. Also, an EU-wide ban on export credit and investment guarantees for Russia entered into force on 26 February 2022.

Existing export credit guarantees continue to insure exporters and banks financing them against payment defaults and political risks in Russia. Where supplies or payments from loans are still outstanding, the insured party should contact Euler Hermes.
In the case of collective coverage, coverage remains in place for shipments that have already taken place. No coverage is available for new shipments.

The approval of investment guarantees from the Federation for Russia and Belarus (i.e. for German direct investment in Russia and Belarus) is suspended until further notice. Existing investment guarantees are not affected by this, and continue to protect investors against political risks in Russia and Belarus. Further information and contact persons for this issue can be found here.

Regulation (EU) 2022/328 tightened the ban contained in Article 2 of Regulation (EU) 833/2014:

  • The export, sale and transfer of all dual-use goods and technologies of Annex I of the EU Dual-use Regulation to Russia or for use in Russia is now prohibited in principle, irrespective of the recipient or the end-user (Article 2(1)).
  • Also, the provision of technical assistance, brokerage services or financial assistance relating to dual-use goods is prohibited in principle (Article 2(2)(a) and (b)).

Yes. However, the privileges and exceptions only apply to transactions with non-military end-users for non-military purposes:

  • Transactions to perform contracts are excepted from the afore-mentioned prohibitions as long as these transactions
    1. were agreed before 26 February 2022 and
    2. a corresponding authorisation was applied for to the Federal Office for Economic Affairs and Export Control before 1 May 2022 (Article 2(5) of Regulation (EU) No 833/2014 in the version supplemented by Regulation (EU) 2022/328).
  • Article 2(3) lays down grounds for exceptions where no individual authorisation is required (e.g. exports for medicinal purposes).
  • Article 2(4) lays down grounds for exceptions where an individual authorisation is required.

Yes, these refer to the aviation sector, goods intended for oil refineries, and various advanced technology products from a range of sectors:

  • The export of products cited in Annex VII of Regulation (EU) No 833/2014 in the version supplemented by Regulation (EU) 2022/328) is prohibited by Article 2a(1). Annex VII lists advanced technology products in the fields of electronics, computers, telecommunications, information security, sensors and lasers, navigation and aviation electronics, navy, aerospace and propulsion. Also, the provision of technical assistance, brokerage services or financial assistance relating to products listed in Annex VII is also prohibited.
  • Further new export bans exist under Article 3b for oil refinery goods in line with Annex X and under Article 3c for aerospace goods in line with Annex XI.

What the advanced technology products have in common is that they can help to strengthen Russia in military or technology terms or to develop the defence and security sector.

Yes:

  • Transactions to perform contracts are excepted from the afore-mentioned prohibitions as long as these transactions
    1. were agreed before 26 February 2022 and
    2. a corresponding authorisation was applied for to the Federal Office for Economic Affairs and Export Control before 1 May 2022 (Article 2a(5) of Regulation (EU) No 833/2014 in the version supplemented by Regulation (EU) 2022/328).
  • Article 2a(3) lays down grounds for exceptions where no individual authorisation is required (e.g. exports for medicinal purposes).
  • Article 2a(4) lays down grounds for exceptions where an individual authorisation is required.

It is not possible to provide a general answer to this question. What counts is the sale, delivery, transfer or export to “any natural or legal person, entity or body in Russia or for use in Russia”. Article 2a thus aims to avert the danger that such goods and services will be used in Russia. In specific cases, exports or services can be included that initially go to a third country if the third country export is related to subsequent use in Russia. A place of residence in Russia of the end-user who is not in Russia at the time of the export to the third country may be a strong indicator of a subsequent use in Russia, but is not sufficient on its own to determine the illegality of an export to a third country.

Article 2b tightens the rules applying to exports of products covered by the ban under Article 2a for certain Russian entities, all of which are listed in Annex IV: the potential exceptions cited in Article 2a(3) and (4) do not apply to these entities.

The only exports that can be authorised on a case-by-case basis are to perform contracts concluded before 26 February 2022, as long as the authorisation is applied for before 1 May 2022 (paragraph (1) letter (b)) and if the products are needed for the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment (letter (a)).

Applications for authorisations can be submitted to the Federal Office for Economic Affairs and Export Control. Further information and contact details can be found on the website of the Federal Office for Economic Affairs and Export Control.

Yes, to the extent that (i) the joint venture is majority-owned by the European company or (ii) the European company controls the joint venture together with other EU companies or with the non-EU company/ies (including Russian companies). Whether the European company exercises control within the meaning of EU sanctions legislation via its holding in combination with the specific shareholder arrangements for the joint venture must be assessed on a case-by-case basis. Regarding the terms “ownership” and “control”, see also paragraphs 62-65 of the “EU Best Practices for the effective implementation of restrictive measures” of 4 May 2018 (Council Document 8519/18).

  • The export of products listed in Annex X of Regulation (EU) No 833/2014 (oil refining products) to Russia or for use in Russia is prohibited in accordance with Article 3b(1) of Regulation (EU) No 833/2014.Further to this, the provision of technical assistance, brokering services or financial assistance relating to the products listed in Annex X is also prohibited.

    This prohibition does not apply to transactions to perform contracts concluded before 26 February 2022 as long as they are performed before 27 May 2022 (Article 3b(3)). Other exceptions subject to an authorisation are envisaged in order to prevent health and safety-related issues (Article 3b(4)).

  • The export of products listed in Annex XI of Regulation (EU) No 833/2014 (aviation products) to Russia or for use in Russia is prohibited in accordance with Article 3c(1) of Regulation
  • (EU) No 833/2014. Further to this, the provision of technical assistance, brokering services or financial assistance relating to the products listed in Annex XI is also prohibited.

    This prohibition does not apply to transactions to perform contracts concluded before 26 February 2022 as long as they are performed before 28 March 2022 (Article 3c(5)).

The entry into force of the sanctions overrides previously issued authorisations where the sanctions now impose restrictions. Such authorisations are therefore no longer valid. Corresponding exports are prohibited unless authorisations have been issued granting exceptions.

Zero notifications (i.e. confirmation that there is no authorisation requirement under foreign trade law under the EU Dual-Use Regulation) expire automatically when the legal situation governing the respective export project changes. This is particularly the case when the export is now prohibited or subject to an authorisation as a result of the changes.

Information and contact data, also regarding the issuing of authorisations, are provided by the Federal Office for Economic Affairs and Export Control on its website. If you have phone queries about the embargo on Russia, please call the hotline of the Federal Office for Economic Affairs and Export Control: +49 6196 908-1237. If companies have questions about a planned export project, they should use the “Sonstige Anfrage” (Other Query) form in the ELAN-K2 export system of the Federal Office for Economic Affairs and Export Control. If you have fundamental legal questions, please email ru-embargo@bafa.bund.de.

This depends on the individual case. In principle, the new sanctions apply to existing and new business transactions from the time they enter into force. However, some sanctions regulations contain grandfathering clauses on existing contracts or deadlines for winding down these contracts. In certain cases, this means that contracts concluded prior to the entry into force of the new sanctions can still – at least until certain deadlines – be performed. In these cases, EU sanctions law is not fundamentally opposed to the performance of the contract. Please obtain legal advice about the specific clarification of your contractual obligations.

No, see the preliminary remarks to Annex VII in this regard. This applies without prejudice to the ban on evasion laid down in Article 12 of Regulation (EU) No 833/2014.

“Item” is understood to mean the product in the way it is designed to be used/consumed (e.g. the individual bottle of wine, the barrel of beer or a case of cigars, a wrapped cigar, etc.).

With regard to the criterion of the value of the spare part or the accessory or of the value of the vehicle for which the accessories or spare parts are intended, the assessment basis is generally the amount charged in the invoice. If, when the accessories/spare parts are delivered, no invoiced amount relating to the vehicle for which they are intended exists, the market price for new cars in Germany, i.e. the basic list price for the vehicle type, should generally be used. This price assumption can be refuted by the specific selling price for the vehicle from the EU for which accessories/spare parts are intended.

1The alteration mainly serves to provide clarification in the light of the approach taken by the authorising authorities. Before it was altered, FAQ no. 32 read: “The value of the invoiced amount is decisive.”

For a spare part to be covered by the ban on luxury goods, three preconditions must be cumulatively met:

  • the spare part must be listed in Annex XVIII no. 17 of Regulation (EU) 833/2014 against Russia,
  • it must be worth more than EUR 300,
  • and it must be intended for a vehicle worth more than EUR 50,000 (or EUR 5,000).

Where no information is contained in the customs declaration, the intended use is presumed to exist if the spare part is objectively technically suited to use in a vehicle with a value of more than EUR 50,000 / 5,000. This assumption can be refuted by means of proof that the product is intended for a different use.

2The change is made with a view to uniform application in the Member States and in the light of the corresponding FAQs from the European Commission of 2 May 2022. Before it was altered, FAQ no. 33 read: “There are no specific value thresholds for the accessories or spare parts controlled under Category 17 of the Annex. Rather, it depends on whether, viewed objectively, the accessories or spare parts are intended for a vehicle or motorcycle which exceeds the specific value threshold. If this is the case, the related accessories or spare parts are also subject to the prohibition (“accessories or spare parts for it”).

No. Article 5aa(1)(b) provides an exhaustive list of preconditions for subsidiaries of the listed companies: only subsidiaries which are based outside the EU and majority-owned by the listed companies are covered. Letter (c) addresses other companies or entities which are not affiliated to the listed companies.

The question of whether, in a specific case, one of the two grounds for exception under paragraph (3) would be applicable can be left unanswered, as there is no ban in place anyway.

Article 5aa(2) of Regulation (EU) No 833/2014 is intended to permit new agreements or other acts of cooperation (e.g. the release of security interests, release of surpluses, sale of objects to redeem outstanding claims) which are built into the existing agreement or are based on the existing agreement and are strictly necessary for an expedited, commercially orderly wind-down of the existing agreement which falls under Article 5aa(1).

In principle, no. The shareholdings of EU listed entities in the same company only need to be aggregated if there are specific indications that several EU listed entities act together when exercising the shareholders’ rights deriving from the ownership.

No. Article 3a(1)(b) covers new provisions of finance. If certain finance was regularly provided for a specific purpose before 16 March 2022, future provisions of the same amount of finance for the same purpose are not covered by the prohibition. Should it be necessary to extend the scope of the provision of finance, an authorisation under Article 3a(2)(b) certainly comes into consideration for provision to a Russian company which is majority-owned by the party providing the finance.

No. The prohibitions contained in Article 3g refer to the present (“to import into the Union”, “to purchase”, “to transport”). There is no retrospective effect. This interpretation of the wording is confirmed by the purpose of the ban on imports: covering iron and steel products where the export transaction has already been completed from the Russian point of view would not be effective as a sanction. Therefore, the decisive point determining a violation of Article 3g(1) is not least the time of the physical transport into the customs territory of the Union. If the relevant products were already in the customs territory of the Union before the entry into force of Regulation (EU) 2022/428 on 16 March 2022, the import ban imposed by Article 3g(1) does not apply. (Footnote)

Footnote: Until 1 June 2022, FAQ no. 40 read: “No. The scope of the prohibition contained in Article 3g is laid down in paragraph (1) letter (a). This requires that the import actually takes place from Russia. The remaining prohibitions in the following letters of the paragraph should be understood as building on letter (a). Therefore, the decisive point determining a violation of Article 3g is not least the time of the physical transport into the customs territory of the Union. If the relevant products were already in the customs territory of the Union before the entry into force of Regulation (EU) 2022/428 on 16 March 2022, the import ban imposed by Article 3g does not apply.” A clarification was required in view of the wording of Article 3g(2) and in the systematic comparison with Article 3i(1) and 3j(1).

In principle, no. The change to the delivery date can in principle be viewed as a new contractual agreement. A corresponding change to the delivery date would exceptionally be covered by the grandfathering rules if the existing contract or one of the two contracting parties already have corresponding scope in which to act – bringing forward or delaying the delivery date within a certain time period without any requirement to provide reasons – and the other contracting party cannot object to or does not have to agree to the bringing forward or postponement of the delivery date.

No. Wooden products such as wooden pallets (EURO pallets or single-use pallets), wooden packing cases, used cable drums of wood which are only used for packaging / shipment / transport purposes and are not the subject of a commercial transaction are not covered by the import prohibitions of Article 3i.

No. Article 3i refers to goods which “originate in Russia or are exported from Russia”. So this prohibition refers to the present. There is no retrospective effect. This interpretation of the wording is confirmed by the purpose of the ban on imports: covering products where the export transaction has already been completed from the Russian point of view would not be effective as a sanction. This means that the prohibitions of Article 3i are not applicable to goods which were already in the customs territory of the Union before the entry into force of Regulation (EU) 2022/576 amending Regulation (EU) No 833/2014 on 9 April 2022.

No. Article 3j refers to goods which “originate in Russia or are exported from Russia”. So this prohibition refers to the present. There is no retrospective effect. This interpretation of the wording is confirmed by the purpose of the ban on imports: covering fossil fuels where the export transaction has already been completed from the Russian point of view would not be effective as a sanction. This means that the prohibitions of Article 3j are not applicable to fossil fuels which were already in the customs territory of the Union before the entry into force of Regulation (EU) 2022/576 amending Regulation (EU) No 833/2014 on 9 April 2022.

Yes. The reference date of Article 3j(3) activates the prohibitions of paragraph (1) (“to purchase, import or transfer into the Union”).

Yes. The financing must refer to a specific transaction (which is sanctioned under paragraph (1)). For example, a general provision of capital by the German parent company to a Russian subsidiary which manufactures and sells products covered by Annex XXIII in Russia would not represent financing within the meaning of paragraph (2).

No. Placing the products in the export procedure is not enough. The products must be transported out of the customs territory of the Union by the end of the day cited in the Regulation as being the end of the deadline for the performance of existing contracts.

Yes. The subsequent processing of the products by the customs authorities is irrelevant in terms of sanctions law where it can be assumed that the products are lawfully within the EU. Consequently, once products have been physically brought into the EU, it does not matter whether and when they are transferred to a customs warehouse or into free circulation.

In principle, it is feasible that certain transactions of a foreign subsidiary of a German parent company owned or controlled by the German parent company are covered by EU sanctions. This can in particular be the case if the parent company exercises a guiding influence on specific transactions of the subsidiary which are of relevance to EU sanctions, if the subsidiary was founded to evade sanctions, or if the subsidiary takes over deliveries which were provided prior to the imposition of the export bans by the German parent company or by subsidiaries located in the EU (indication of evasion of sanctions). However, the mere fact that products covered by Annex XXIII are fully produced abroad (including in Russia itself) by a foreign subsidiary and sold there to / in Russia is not sufficient for the products to be subject to sanctions. This is also the case if the German parent company provides certain basic services (e.g. IT and accounting services) for the foreign subsidiary which are not related to the specific business decisions which may be covered by EU sanctions and which do not per se represent technical assistance within the meaning of Article 3k(2)(a).

Yes. The fact that the headquarters of the group may be located in a third country is irrelevant here. The key factor is whether the specific company was established under Russian law, and/or is headquartered there and has legal personality of its own. In contrast, legally dependent branches of foreign companies are not Russian entities covered by prohibitions.

Yes. According to the wording of the provision, the fulfilment of all claims relating to the transactions which are now subject to sanctions is prohibited. In view of this, the repayment of an advance payment which aims to return a legal relationship to the situation prior to the imposition of the sanctions (status quo ante) is inadmissible under law. The same applies to claims for payment from advance payment bonds. In addition, it is also necessary to comply with relevant sanctions affecting provisions of economic resources, transactions and other prohibitions. The prohibition of a payment from an advance payment bond (or a back-to-back guarantee relating to it) which refers to a transaction that is now prohibited will generally also derive from the ban on the provision of finance or financial assistance relating to sector-specific export and import bans (cf. the definition in Article 1 letter o of Regulation (EU) 833/2014).[1]
____________________________
[1] Alteration of the FAQ marked as “under revision” since 14 December 2022 on 13 April 2023 following discussions with the relevant unit at the European Commission.
Until 14 December 2022, FAQ no. 51 read as follows: “Does the repayment of an advance payment received prior to the imposition of the sanctions violate the ban on performance of contracts of Article 11 of Regulation (EU) 833/2014 if the performance of the contract is no longer possible due to the sanctions?
Answer: No. It is prohibited to place the Russian contractual partner in a position as though the contract had been performed (e.g. by payment of damages for the non-performance). However, the repayment of an advance payment which specifically aims to return a legal relationship to the situation prior to the imposition of the sanctions (status quo ante) is not affected by this. For this reason, it is possible to repay an advance payment despite the ban on performance. Irrespective of this, relevant sanctions affecting provisions of economic resources, transactions and other prohibitions, such as the ban on the provision of finance or financial assistance relating to sector-specific export and import bans, must be complied with.”

No. The legal exemptions in place until 5 December 2022 and 5 February 2023 cover spot purchases (as opposed to futures contracts, for which the wind-down period runs until 4 June 2022), irrespective of the identity of the contractual parties.

No. The ban refers to new investments (“to invest, participate or otherwise contribute”). There is no requirement to wind down existing investments which are co-financed from the Russian Direct Investment Fund.

In principle, yes. The protection of existing investment would be undermined if shareholders’ rights deriving from this investment, such as entitlement to distribution of profits, voting rights at the shareholders’ meeting or control rights, could no longer be exercised. However, the exercising of the shareholders’ rights must not be used to contribute to a change in the shareholding structure (e.g. an increase in the shareholder’s own stake or in the stake held by the Russian Direct Investment Fund). An exception from sentence 3 is feasible in specific cases of and under the procedural preconditions of Article 2e(4), e.g. if an obligation to make additional capital contributions had already been contractually agreed in the context of the existing investment.

The EU sanctions relating to the field of the award of public and concession contracts are

  • firstly a ban on contract awards in place since 9 April 2022 for ongoing procurement procedures,
  • secondly the ban on continued performance from 11 October 2022 onwards of contracts and concessions awarded before 9 April 2022,

where people or companies which have a relationship with Russia within the meaning of Article 5k of Regulation (EU) No 833/2014 (see question 55c in this regard) are directly involved in the contract in question as applicants, bidders or contractors or are indirectly involved, in each case with more than 10% of the contract value, as subcontractors, suppliers or companies committing to provide means to fulfil the contract.

The prohibitions under Article 5k of Regulation (EU) 833/2014 refer to public and concession contracts above the EU thresholds in line with section 106 of the Act against Restraints of Competition. Article 5k does not affect contracts and concessions below the EU thresholds. In the case of contracting authorities which must only apply procurement law under the Act against Restraints of Competition in a specific case on the basis of a grant award document, Article 5k does not apply directly.

Beyond the scope of the EU procurement directives, the prohibition also covers certain exceptions contained in the EU procurement directives where no procurement procedure has to be carried out under procurement law under the Act against Restraints of Competition. In these cases, too, in principle only contracts and concessions which are above the EU thresholds are affected by the EU sanctions.

All of the procurement procedures which are covered by the exceptions (i.e. are not cited in Article 5k(1)), are not affected by the EU sanctions (e.g. section 137 no. 8 of the Act against Restraints of Competition).

No. The sanctions apply directly only to instances which fall under EU procurement law on the basis of the statutory rules in the Act against Restraints of Competition (or under the exceptions specifically regulated in Article 5k(1) of Regulation (EU) 833/2014).

A relationship with Russia within the meaning of the provision exists

  • a) via the Russian nationality of the applicant/bidder or the applicant/bidder’s establishment in Russia,
  • b) via the involvement of a natural person or a company which meets one of the criteria in letter a in the applicant/bidder via the direct or indirect holding of more than 50% of the shares,
  • c) where the applicant/bidder acts on behalf of or on the instruction of persons or companies which meet the criteria of letters a and/or b.

In view of the regulatory system of Regulation 833/2014, it can be assumed that the relationship with Russia within the meaning of the provision also exists if the relevant person has not only Russian nationality but also another nationality (including an EU nationality) (see also the inverse conclusion deriving from Article 5b).

The above-mentioned criteria are relevant to the determination of the “Russia relationship”, irrespective of whether the company is directly or indirectly involved in the contract. This also applies to individual members of a bidding consortium, i.e. the “Russia relationship” within the meaning of the provision already exists if one of the members can be attributed to Russia in line with the above criteria.

No. The key factor is whether the specific company was established under Russian law, and/or is headquartered there and has legal personality of its own. In contrast, legally dependent branches of foreign companies are not Russian entities covered by prohibitions.

The ban on contract awards and performance refers not only to persons and companies involved in a procurement procedure directly or as indirect contractors. It also covers the following persons and companies which are indirectly involved in the execution of the contract or the procurement procedure:

  • subcontractors
  • suppliers
  • companies whose capacities are used in the context of the commitment to provide means to fulfil the contract.

However, this only applies if these are individually responsible for more than 10% of the value of the contract.

This depends on the individual share of each subcontractor, supplier or company committing to provide means to fulfil the contract. The ban on contract award or performance applies only if the individual share exceeds 10% of the value of the contract. The individual shares are not cumulated.

No. The ban on the award of contracts also applies to contracts which expire before 10 October 2022. This means that no more contracts may be concluded if they violate the sanctions.

The provision of the evidence is oriented to the implementation in the respective procurement procedure. For procurement procedures above the EU thresholds, the Federal Ministry for Economic Affairs and Climate Action has provided a model self-declaration to be presented by applicants and bidders / all members of a bidding consortium.

Bids by companies which do not provide a corresponding declaration despite being asked to do so must be excluded from the assessment of the bids (see in particular section 57(1) no. 2 of the Ordinance on the Award of Public Contracts).

If a contractor of a contract existing before 9 April 2022 falls directly under the scope of Article 5k of Regulation 833/2014 due to its relationship with Russia, the contract must be terminated in accordance with Article 5k(1) in conjunction with (4) by 10 October 2022.

Should, in contrast, only a subcontractor or supplier of the contract fall under Article 5k due to a relationship with Russia, this subcontractor or supplier can be substituted by 10 October 2022. If this does not happen, the contract must be terminated by 10 October 2022.

Theoretically, there is also the possibility to suspend a contract falling under Article 5k, thereby initially avoiding full termination. However, a suspension would have to be indefinite and unconditional, and would thus last as long as the sanction is in place.

In order where necessary to be able to comply with the ban on performance of contracts under Article 5k(1) variant 2 of Regulation 833/2014 or to document the lack of a relationship with Russia within the meaning of the Regulation in an ongoing contractual relationship, it makes sense for contracting authorities to obtain a self-declaration by the contractor in line with the model provided by the Federal Ministry for Economic Affairs and Climate Action. If the contractor fails to cooperate, further investigations (e.g. consultation of the Transparency Register, direct contact with (sub)contractors) should be undertaken where additional circumstances arise (e.g. Russian business addresses, awareness of business activities in Russia). Depending on the individual case, where there are persistent or increasingly clear signs of a relationship with Russia which is of relevance to a prohibition, the contract may no longer be performed (termination of the contract or suspension of the contractual obligations).

Should a contractor fail to present a self-declaration regarding the existence of a relationship with Russia within the meaning of Regulation 833/2014 despite a (repeated) demand, this does not automatically result in the obligation of the contracting authority to terminate the contractual relationship or to take other measures to comply with the ban on performance of the contract. However, if further circumstances arise, it may be necessary to undertake further investigations and if necessary to draw legal consequences.

Secondary claims by the contracting authority against the contractor or the subcontractor are not affected by Article 5k or Article 11 of Regulation 833/2014. It is thus possible to assert these claims even after 10 October 2022 without violating Regulation 833/2014.

Article 11 of Regulation 833/2014 excludes in principle an obligation to pay damages to Russian persons within the meaning of the provision.

By General Authorisation No. 31, announced in the Federal Gazette on 24 June 2022, the Federal Office for Economic Affairs and Export Control permits derogations from the prohibitions under Article 5k(1) of Regulation 833/2014, initially until 31 December 2022, now extended until 31 March 2024. The General Authorisation covers all exceptions listed in Article 5k(2)(a) to (f), and can be used by all contracting authorities within the meaning of section 98 of the Act against Restraints of Competition without any special justification being provided. There is no need to obtain authorisation for individual cases, nor will such authorisation be issued. The contracting authority verifies whether an exception is covered by the General Authorisation. The contracting authority can refrain from using the General Authorisation if the contract is not going to be awarded to a company covered by Article 5k(1), or the continuation of a contract with such a company is not envisaged.

The use of the General Authorisation must be notified to applicants and bidders (ban on award of contract) and documented for the purposes of the procurement procedure. With regard to the continuation of existing contracts, the contractor must be informed accordingly and the use of the General Authorisation must be documented (ban on performance of contract).

In principle, there is no specific procedure for the use of the exception (see re question 55k above). Contracting authorities must register once online as users of General Authorisation No. 31 with the Federal Office for Economic Affairs and Export Control as the competent authority. Contracting authorities which intend to use the General Authorisation can register prior to use or within 30 days of the use (see figure 4.1. of General Authorisation No. 31). No registration is required for each further use.

If you have questions about the registration process, please send them only to:

Federal Office for Economic Affairs and Export Control, Division 216

Phone no. +49 6196 9080 or fax no. +49 6196 908 1916.

No. The provision of services for subsidiaries of Russian companies established in the EU or in third countries (apart from Russia) is in principle permissible because these are not “legal persons, entities or bodies established in Russia” within the meaning of Article 5n(1) and (2). It would be different if the service is provided (indirectly) for the Russian parent company. The circumstance that the subsidiary in the EU or in a third country can continue its business activities on the basis of the services provided and can generate profits which could be distributed to the Russian parent company is insufficient to justify the assumption that a prohibited indirect service is being provided to the benefit of the Russian parent company, because the parent company would only benefit in a general way and as a “reflex” from the service provided in the EU (cf. the “EU best practices for the effective implementation of restrictive measures”, EU Council document 10572/22, para. 67 for similar considerations in the context of the indirect ban on provision of economic resources). It would be different if the service as such were “passed on” to the parent company, e.g. by the EU subsidiary itself providing the same type of services to its Russian parent company.

The exception in Article 5n(7) is intended to ensure that Russian subsidiaries of EU companies can continue to receive the services they need to continue their legal business activities. It is true that only those services are to be admissible that “exclusively” benefit the Russian subsidiary. But it is immaterial if Russian clients of the subsidiary benefit as a “reflex” from the services provided from the EU if or because they generally receive services from the Russian subsidiary. It would be different if the service as such were “passed on”, e.g. by the Russian subsidiary itself providing the same type of services to Russian clients.

Information about violations of sanctions which authorities receive on the basis of the obligation to supply information supplement the overall information available to the authorities for the effective implementation of the EU sanctions, particularly with regard to the effective combating of specific evasions of sanctions relating to trade in goods.

According to the wording, Article 6b of Regulation (EU) No 833/2014 covers all natural and legal persons, entities and bodies. The obligation does not distinguish between information obtained privately or professionally. The confidential communications between lawyers and their clients, protected by Article 7 of the EU Charter of Fundamental Rights, is excepted from this obligation. Further privileges for non-state actors are not envisaged by Article 6b of Regulation (EU) No 833/2014 – unlike in the case of other information obligations under EU sanctions rules such as Article 5(1) of Regulation (EU) No 765/2006.

All information about violations of sanctions which facilitates the implementation of Regulation (EU) No 833/2014 is covered by the obligation to supply information. The new obligation to supply information thus corresponds to the various parallel provisions of existing EU sanction regimes. It covers all relevant information about violations and evasions, and attempted violations and evasions, of the prohibitions contained in the Regulation. The obligation to supply information arises when knowledge is obtained of relevant information. This includes in particular positive knowledge of violations of sanctions like specific procurement attempts or trade relations that violate sanctions. The parties obliged to supply information are not subject to an obligation to conduct research in order to substantiate the information. The information should be of a certain quality that permits the authorities to undertake further investigations. Mere non-substantiated assumptions which, when viewed objectively, do not permit any further scrutiny, cannot be deemed relevant here. Also, there is no obligation to pass on information that might create a risk of prosecution of oneself or a close relative. The information must be supplied within two weeks of when it is obtained.

In the case of information relating to goods and services, the competent authority for the receipt of information is the Federal Office for Economic Affairs and Export Control (Melderegister-Sanktionen@bafa.bund.de), In the case of information relating to money, finance or financial assistance, the Bundesbank (sz.finanzsanktionen@bundesbank.de) is the competent authority

Violations against the obligation to supply information are administrative offences (section 19(5) of the Foreign Trade and Payments Act). This also applies to violations by negligence of the obligation to supply information. However, violations by negligence will not be prosecuted as an administrative offence if the violation is uncovered by the party required to supply the information via self-controls and has been notified to the competent authority and appropriate measures have been taken to prevent a violation for the same reason (section 22(4) sentence 1 of the Foreign Trade and Payments Act). Apart from this the prosecution of administrative offences is a matter for the due discretion of the prosecuting authority (section 47(1) sentence 1 of the Act on Administrative Offences in conjunction with section 22(4) sentence 3 of the Foreign Trade and Payments Act).