🇨🇦🇷🇺 Canada expands services ban against Russia
 
‼️ Further to the sectoral service ban introduced on 7 June 2022, Canada on 14 July extended its scope to include the provision of services incidental to manufacturing.
 
The following additional Russia’s sectors are now targeted by the enlarged prohibition:
 
▫️Manufacture of basic metals ⚙️
 
▫️Manufacture of fabricated metal products, except machinery and equipment 🛠
 
▫️Manufacture of computer, electronic and optical products 💻
 
▫️Manufacture of electrical equipment📟
 
▫️Manufacture of machinery and equipment not elsewhere classified 🛞
 
▫️Manufacture of motor vehicles, trailers and semi-trailers 🚛
 
▫️Manufacture of other transport equipment. 🛻
 
▫️Land transport and transport via pipelines 🛣
 
📆 The norm will apply to any newly listed service and industry 60 days after its coming into force.

🇺🇸 🇷🇺 US clarifies Russia sanctions application
 
ℹ️ On 14 July the US OFAC published a Food Security Factsheet on the sanctions’ application to transactions with Russia’s food and agricultural sector.
 
📑 According to it the sanctions do not apply to:
 
🌾 the exportation of agricultural commodities from, to, or involving Russia
 
🪹exportation of fertilizers from, to, transiting, or involving Russia
 
🔐 insurance and reinsurance services related to the transportation of agricultural commodities to or from Russia
 
🚜 exportation of agricultural equipment and spare parts to Russia
 
⚓️ exportation of agricultural and medical products from Port of Novorossiysk
 
🏦 transactions with Rosselkhozbank related to agricultural commodities, agricultural equipment, medicine, medical devices/software updates/replacement parts, as well as transactions related to the prevention, diagnosis, or treatment of COVID-19, or ongoing clinical trials.
 
‼️Three amended FAQs also clarify the restrictions related to telecom- and internet-related equipment & software, transactions with some designated Russian agricultural companies, and correspondent or payable-through accounts and transactions involving certain Russian banks.

🇪🇺 EU unveils proposals for next Russia sanctions 🚫‼️
 
📑 According to a notice published on July 15 🗓, the European Commission's 7th round of sanctions aims to maintain the effectiveness of previous decisions while strengthening legal certainty and enforcement by member states. Alignment with measures introduced by G7 partners is also sought.
 
The future “maintenance and alignment” package is said to include:
🔹 a ban ❌ on Russian gold 🌟imports
🔹 more designated entities and persons 👥
🔹 reinforced EU dual use and advanced technology export controls 📟
🔹 tighter Russian asset freezes
🔹 clarifications of some financial 💵 and economic 📈 sanctions
🔹 confirmation that trade in agricultural products 🌾 between Russia and third countries is not restricted.
 
ℹ️ It is also proposed to prolong the current sanctions by 6 months to be reviewed in January 2023. ❕

Foreign banks are not allowed to divest in Russia 🇷🇺❌
 
❕Deputy Finance Minister Aleksei Moiseev says foreign banks will no longer be able to sell their subsidiaries and other assets in Russia ⛔️. Divesting deals require approval from the Russian Government 🇷🇺🏛, but according to the official, the competent investment control commission will now decline any such application from a foreign institution.❕

⚠️ The ban ❌ will stay in place as long as the work of Russian banks 🏦 abroad is blocked by Western sanctions and regulators, stresses Moiseev.

🇬🇧🇷🇺 UK bans new investments in Russia
 
‼️ On 19 July amendments to UK-Russia sanctions regulations came into force, introducing restrictions on investments in respect of:
🔹 land located in Russia
🔹 persons connected with Russia
🔹 relevant entities
🔹 joint ventures
🔹 establishing a presence in Russia. 
 
🚫 It is now prohibited:
 
❌ to directly or indirectly acquire land ownership interest
 
❌ directly or indirectly acquire interest in or control over an entity connected with Russia
 
❌ directly or indirectly establish any joint venture with a person connected with Russia
 
❌ open a representative office or establish a branch or subsidiary located in Russia
 
❌ provide related investment services. 
 
ℹ️ The amendments provide for exceptions to, and licensing powers in relation to, these new provisions.
✅ In particular, contracts concluded before the ban’s entry into effect or resulting ancillary contracts are not affected.

🇷🇺 Russian Central Bank has lifted restrictions on advance payments to non residents

‼️ Starting 19 July the 30% limit for certain advance payments to suppliers from unfriendly countries is lifted.

✅ Now the pre-payments can be done in the amount foreseen by the agreement without any limitations regardless of the supplier’s country of incorporation.

🇬🇧🇷🇺 UK amends Russia sanctions, expands designation criteria
 
‼️ The latest United Kingdom’s Russia-sanctions expand the list of categories of Russian nationals eligible for personal sanctions.
 
🔻 Heads / deputy-heads of any public body, federal agency or service subordinate to the President of the Russian Federation
 
🔻 Chair and Vice-Chairs of the Government
 
🔻 Any Minister/Deputy Ministers
 
🔻 A Governor or members of the Board of Directors of the Central Bank
 
🔻 Heads / deputy heads of any other public body or agency
 
🔻 Vice presidents, or equivalent positions or higher, of Government-affiliated entities
 
🔻 Directors / managers or equivalent positions or higher, of Government-affiliated entities
 
⭕️ Also targeted may be a wider circle of associated persons, i.a. relatives to the main target.
 
✅ The norm provides for a new exception from trade sanctions for humanitarian assistance activity in the Donetsk and Lugansk oblasts, expands the definition of ownership in relation to sanctioned ships and aircraft.

🇬🇧🇷🇺 UK bans Russian gold, oil, coal imports and provision of professional services
 
📆 On 21 July new amendments to the UK-Russia sanctions came into effect prohibiting 🚫 the import from Russia of:🛢 oil and oil products, 🌟 gold,
🪨 coal and coal products
 
‼️ Also banned:
🔻 the export to Russia of additional categories of industry-critical goods;
 
🔻 provision of accounting services, business and management consulting services or public relations services to any individual resident or located in Russia or any Russia-incorporated / domiciled entity.
 
✅ The norm authorizes the provision of technical assistance in relation to an aircraft owned, chartered or operated by a person connected with Russia, at a UK airport, except for the purposes of facilitating the change of the aircraft’s ownership / operator.

🇪🇺🇷🇺 EU’s 7th sanctions package comes into effect
 
⚡️ Newest EU decisions published on 21 July 2022 introduce:
 
⭕️ The prohibition to purchase, import, or transfer, directly or indirectly, gold 🌟and golden jewelry 💍 originating in Russia and exported from Russia into the EU or to any third country. Exempted from the prohibition is jewelry for personal use of persons travelling from the EU and cultural goods on loan in the context of formal EU – Russia cultural cooperation.
 
⭕️ Export restrictions on a wider list of industry- and military-sensitive goods and technologies.
 
⭕️ Lock access ban for Russian vessels 🚢 in addition to the existing port access ban.
 
⭕️ Prohibition on accepting deposits💰 from legal persons, entities or bodies established in third countries and majority-owned by Russian nationals or natural persons residing in Russia. The acceptance of deposits for non-prohibited cross-border trade will be subject to a prior authorisation by competent national authorities.
 
‼️ The EU designated 48 more individuals and 9 entities under its full asset freeze/visa ban, including:
🔻 AVLITA Stevedoring Company
🔻 Sberbank
🔻 The Alexander Gorchakov Public Diplomacy Fund
🔻 Rossotrudnichestvo
🔻 Russkiy Mir Foundation
🔻 Research and Production Association “Kvant”
🔻 FORSS Group of Companies
🔻 “Young Army” Military Patriotic Social Movement
 
📑 At the same time the EU introduced a derogation from the asset freeze 🥶 of designated Russian banks to allow the use of funds necessary for the purchase, import or transport of agricultural 🌾and food 🥘 products, including wheat and fertilisers.
 
🛫 The EU technical assistance to Russia for aviation goods and technology will now be allowed ✅ to safeguard the technical industrial standard-setting work of the International Civil Aviation Organization.
 
🆗 A new derogation makes possible supplies of industry-important equipment to Russia with EU Member States authorizations provided that such equipment remains in the exclusive use and under the full control of the authorising Member State and is necessary to fulfil its maintenance obligations under a long-term lease agreement between that Member State and the Russian Federation.  
 
The exemption from the prohibition to engage in transactions with previously designated state-owned entities is extended to cover also purchase, import or transport of 💊pharmaceutical, 🚑 medical, 🎋agricultural and 🍱 food products, 🛢oil and refined petroleum products, i.a. to third countries.
 
The winding-down period for joint ventures or similar arrangements with several Russian entities is prolonged 📆from 5 September to 31 December 2022. The period for the sale/transfer of ownership rights of EU-based entities controlled by certain listed Russia persons is extended from 9 October to 31 December 2022 or until 6 months from the designation date.   
 
🧾 Provision of certain consulting services is also allowed to companies in Russia owned/controlled by legal persons, entities or bodies incorporated under the law of Iceland, Lichtenstein, Norway and Switzerland (before only EU-owned/controlled companies in Russia could benefit from such services).

🇷🇺 The list of products, to which the simplified procedure of conformity assessment is not applicable, has been expanded
 
🧾 The previously established list of exсeptions from new temporary certification procedure in the form of declaration of conformity based on applicant’s own evidence base (without import of samples, testing, etc.) was extended by:

🔹 equipment for metal and wood processing, mining industry,
 
🔹 spare parts and components of vehicles
 
🔹 some types of motorcycles and bicycles (category L vehicles)
 
🔹 heat and sound insulation materials.
 
The list contains complete customs codes and is valid since 16 July 2022.
 

🇷🇺 The Russian Central Bank has lowered the key rate to 8% on 22 July 2022.
 

🇺🇸🇷🇺 U.S. Treasury issues new Russia-related general licences
 
📑 On 22 July U.S. Office for Financial Assets Control issued new general licenses, authorizing:
 
🔹 GL 45: until October 20, 2022, all transactions incident and necessary to the wind down of financial contracts or other agreements that were entered into on or before June 6, 2022 and relate to debt or equity issued by an entity in Russia
 
🔹 GL 46: transactions in support of an auction process to settle certain credit derivative transactions with Russia
 
☑️ In addition, two newly-published and two updated frequently asked questions clarify the effect of the general licences in question and the details of the “new investment” prohibition.
 

🇪🇺🇷🇺 The EU explains its 7th package of Russian sanctions
 
The recent set of the European Commission’s Q&As clarifies the application of the EU sanctions, regarding:
 
🏚 asset self-reporting requirement (the EU requires that listed persons actively disclose all their assets within the EU's jurisdiction to the national competent authority)
 
🍱 effects of the restrictive measures on the food sector
 
🏢 exceptions to the transactions ban with certain state-owned Russian enterprises
 
🌟 scope of the Russian gold import ban
 
🛃 expanded and tightened export controls of dual-use goods
 
💊 addition of certain medical/pharmaceutical products to the advanced technologies export embargo
 
🛫 airline information sharing measure
 
🛳 lock access prohibition for Russian vessels
 
💵 extension of the deposits acceptance ban to third-country entities, etc.
 

🇷🇺 Russian Ministry of finance is planning to change PIT taxation rules for employees working remotely outside of Russia
 
‼️ The initiative is aimed at making working outside of Russia 🇷🇺 but for a Russian employer less attractive.
 
⏰ If a remote employee spends more than 183 days outside of Russia during a calendar year, (s)he loses the Russian tax residency status. Such employees have to pay PIT in the country of their new residency themselves.
 
⭕️ No more paying  taxes in Russia is required if you are not a Russian tax resident and work outside of Russia, though your income comes from a Russian legal entity.
 
ℹ️ In case the changes come into force, the employer of such remote employees will withhold PIT from their salary even if they lose Russian tax residency status.
In addition, tax rate will be increased from 13% to 30% after status change.
 
All the income received within a year will be taxed at 30% since according to the proposed approach this income will be considered as sourced in Russia.
 
Nonetheless for some jurisdictions you can offset taxes paid in Russia against local ones.

🇪🇺🇷🇺 The EU clarifies application of sanctions against Russia to pharma and medical sector
 
🎗On 29 July the EU published a new set of frequently asked questions concerning the application of its Russia export embargo to the medical sector.🚑🏥💊
 
IMPORTANT:
‼️ Medical and pharmaceutical products can qualify as “economic resources that can be used to obtain funds”, which are banned ⭕️ from provision to sanctioned persons and entities.
ℹ️ For an asset to qualify as an ”economic resource”, it is not necessary to prove that it will be used to obtain funds.
 
🚧 In general, “any business conducted with a designated person will likely involve an exchange of funds or economic resources”.
 
⛔️ Therefore, “no further trade with those persons is possible as of the moment of their designation”, unless specifically authorized by the EU.

🇳🇿🇷🇺 New Zealand sanctions 60 more Russian entities
 
📆 On 2 August New Zealand designated 61 Russian military and industrial complex companies under its  asset freeze and financial dealings ban.
 
📄 The list includes i.a. JSC SOGAZ, JSC Sevmash, Irkut Aircraft Company, Russian Railways, Rosoboronexport,  Kalashnikov Concern, and a number of other state entities operating in the research and development, aircraft- and machine-building sectors.
 

🇺🇸🇷🇺 U.S. OFAC’s new Russian designations
 
📆 On 2 August the U.S.Treasury designated 🚫 13 more individuals, 36 entities and two vessels.
 
📑 The list includes Skolkovo Foundation and Technopark Skolkovo, Magnitogorsk Iron & Steel Works, Moscow Institute of Physics and Technology etc.
 
✅ According to OFAC, sanctions against A.Guryev, A.Melnichenko and A.Ponomarenko do not extend to the following entities linked to these persons: PhosAgro, EuroChem and Sheremetyevo International Airport, respectively.
 
ℹ️ The following general licences were adopted on the same day:
 
🔹 GL40A authorizing the provision of goods, technology, or services for civil aviation safety ✈️ to an extended number of Russian entities;
 
🔹 GL43A allowing divestment or transfer of debt or equity of Nord Gold 🌟 and Severstal ⛓ companies as well as their controlled entities also to U.S. citizens;
 
🔹 GL48 authorizing divestment or transfer of debt or equity of Magnitogorsk Iron & Steel Works and Government Transport Company as well as their controlled entities until 3 October 2022;
 
🔹 GL49 authorizing the wind down of transactions with MMK Metalurji or its controlled entities until 31 January 2023.

🇨🇭🇷🇺Switzerland replicates the EU’s 7th sanctions package
 
📆 On 3 August Switzerland adopted some elements of the 🇪🇺 EU’s 7th package of sanctions on Russia, i.a.:
 
🚫 ban on buying, importing or transporting gold and gold products 🌟from Russia. Services in connection with these goods are also prohibited;
 
🚫 full blocking sanctions against Sberbank 🏦 with a transition period for its divestment in the EU until 31 October 2022;
 
✅ derogations allowing for transactions with banks under asset freeze for the purpose of enabling supplies of agricultural products 🌾 and oil 🛢 to third countries.
 
‼️ 8 more Russian entities designated under the 7th EU package were listed by Switzerland on 29 July, including the Alexander Gorchakov Public Diplomacy Fund, Rossotrudnichestvo, Russkiy Mir, “Young Army” movement, FORSS Group of Companies, AVLITA Stevedoring Company and “Kvant” association.
 

Dear subscribers,
 
This is the official announcement that SCHNEIDER GROUP Telegram channel on practical application of sanctions for foreign businesses operating in Russia will be discontinued.
 
We encourage you to seek the up-to-date information on our website and in our online and onsite events.
 
You can send us your sanctions-related questions at sanctions_russia@schneider-group.com – we’ll be happy to help!