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CAYMAN ISLANDS - Sanctions: European Union significantly toughens its stance towards Russia

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  • Strengthening restrictions on Russia's access to EU capital markets by imposing a ban on EU nationals and companies providing loans and credit to five major Russian state-owned banks, and increasing restrictions on trade in bonds, equity or similar financial instruments, issued by the same banks, with restrictions extended to some major Russian defence and energy companies.
  • Adding 24 persons to the designated persons list of those subject to travel bans and asset freezes, bringing the total to 119 individuals and 23 entities.
  • Implementing new restrictions on cooperation by EU persons and companies with Russian industries involved in the oil and gas exploration and production, principally deep water and arctic oil exploration.
  • Adding a new sectoral sanction prohibiting the export of dual-use goods and technologies to certain designated persons and entities and restrictions on the insurance and reinsurance of Russian items on the EU ‘Common Military List’.
  • Five major state-owned Russian banks, being: Sberbank, VTB, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank and their non-EU based affiliates and subsidiaries;
  • Three major state-owned Russian gas producers, being: Rosneft, Transneft and Gazprom Neft and their non-EU based affiliates and subsidiaries; and
  • Three major Russian defence firms, being: OPK Oboronprom, United Aircraft Corporation and Uralvagonzavod.
  • Oil and gas exploration -- In particular, services necessary for deep water oil exploration, arctic oil exploration and shale oil projects in Russia including drilling, well testing, logging and completion services and the supply of specialised floating vessels. The new measures are in Council Regulation (EU) 960/2014 and supplement Council Regulation (EU) 833/2014. These restrictions are fully implemented in Cyprus. As far as the British Virgin Islands and Cayman Islands are concerned please refer to our commentary above under “EU capital markets restrictions: Implementation in the British Virgin Islands and the Cayman Islands”.
  • Dual use goods and technologies -- It is now prohibited for an EU national to sell, supply, transfer or export “dual use” goods and technologies to any of the following: JSC Sirius, OJSC Stankoinstrument, OAO JSC Chemcomposite, JSC Kalashnikov, JSC Tula Arms Plant, NPK Technologii Maschinostrojenija, OAO Wysokototschnye Kompleksi, OAO Almaz Antey and OAO NPO Bazalt. However a number of exemptions are available. The new measures are in Council Regulation (EU) 960/2014 and supplement Council Regulation (EU) 833/2014. These restrictions are now fully implemented in Cyprus. As far as the British Virgin Islands and Cayman Islands are concerned please refer to our commentary above under “EU capital markets restrictions: Implementation in the British Virgin Islands and the Cayman Islands”. In addition it should be noted that the UK Export Control Act 2002 applies to the Overseas Territories and subsidiary legislation issued under that Act, The Export Control (Russia, Crimea and Sevastopol Sanctions) Order 2014, further implements Council Regulation (EU) 833/2014 in this respect in the Overseas Territories.
  • Items on the Common Military List -- Council Regulation (EU) 833/2014 implemented significant restrictions on the export of military items to Russia back in July 2014. Council Regulation (EU) 960/2014 further enhances these restrictions by prohibiting the provision of insurance and reinsurance on such items. For commentary on its application in Cyprus, the British Virgin Islands and the Cayman Islands please refer to the prior bullet point covering dual use goods and technologies.

Published September 21, 2014

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