New EU sanctions package: deadline for derogations needed for divestment from Russia extended to 31 December 2025

published on 23 December 2024 | reading time approx. 3 minutes

The new sanctions package sends a message to EU operators that they should consider winding down their operations in Russia and/or not setting up new operations there. As a result, the extended derogations are granted to ensure an orderly divestment process.

A newly adopted Council Decision (CFSP) 2024/3187 of 16 December 2024 amends Decision 2014/512/CFSP and states that there are still significant risks in maintaining business activities in Russia. The new package raises awareness that Russia is a country where the rule of law no longer applies. Finally, there is a much-needed extension of the deadline for divestment from Russia. The new deadline is 31 December 2025. The affected goods and technologies are those listed in Articles 2, 2a, 3, 3b, 3c, 3f, 3h and 3k of Council Regulation (EU) No 833/2014, for example dual-use goods and technologies, goods and technologies that could contribute to Russia's military and technological enhancement, etc. In order to obtain an authorisation for these goods and technologies, specific requirements have to be met:

the sale, supply or transfer is strictly necessary for divestment from Russia or the winding up of business activities in Russia;
the goods and technology are owned by an EU national or EU operator or by a Russian entity owned or solely or jointly controlled by an EU operator;
there are no reasonable grounds to believe that the goods are intended for a military end-user or have a military end-use in Russia;
the goods and technology concerned were physically located in Russia before the entry into force of the relevant prohibitions in respect of the goods and technology listed in the abovementioned Annexes.
the sale, supply or transfer of the goods and technology takes place before 31 December 2025.

There are also specific requirements for import bans under Articles 3g and 3i:

The import or transfer is strictly necessary for the divestment from Russia or the winding up of business activities in Russia;
The goods concerned are owned by an EU national or an EU operator or by a Russian operator owned or solely or jointly controlled by an EU operator;
The goods concerned were physically located in Russia before the relevant prohibitions in Articles 3g and 3i entered into force in respect of those goods.
The import or transfer into the Union took place before 31 December 2025.

The deadline is also extended for the prohibition on the provision of services set out in Article 5n of Council Regulation (EU) No 833/2014, such as legal advisory services, accounting, auditing, etc.

In EU Member States, the enforcement of EU sanctions, including the granting of authorisations for activities that could otherwise be prohibited, is administered by specific national authorities. If EU operators wish to make use of these exemptions, they should apply for an authorisation from the relevant national authority. The process can vary from country to country and can even create a great deal of uncertainty for EU operators, especially if they operate in several EU countries.

In Germany, for example, the Bundesbank and the Federal Office for Economic Affairs and Export Control (BAFA) are the main institutions responsible for financial sanctions issues. The Bundesbank deals with issues relating to financial transactions, while the BAFA oversees export controls and related authorisations.

If a company is seeking authorisation to provide services that are generally prohibited under EU sanctions law, such as those required for divestment from Russia, it should contact these authorities to obtain the necessary approvals. Therefore, compliance with these regulations is mandatory and any exemptions or authorisations must be obtained through the appropriate channels.

For more detailed information, companies can refer to the FAQs on sanctions against Russia provided by the Federal Ministry for Economic Affairs and Climate Protection¹. Legal advice should also be sought from sanctions experts.

Other important updates to the 15th Sanctions Package

Individual Lists - new sanctioned persons and entities
Targeting sanctions circumvention by sanctioning specific vessels from third countries
Trade-related sanctions - new entities subject to tighter export restrictions
Safeguards for EU operators - prohibition on recognition or enforcement in the EU of judgments handed down by Russian courts
New exemption allowing the release of cash held by EU central securities depositories (CSDs)

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¹ BMWK - FAQs about sanctions against Russia

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