"No-Russia" clause: EU extends restrictive measures against Russia

The no-Russia clause (enshrined in Art. 12g of Regulation (EU) No. 833/2014) is a measure in response to the ongoing war and the associated crisis in Ukraine. Companies doing business with Russia must now observe the following:

What obligations result from the new clause?

Include a contractual clause:
Companies are obliged to include a clause in their contracts prohibiting re-export to Russia and re-export for use in Russia when selling, supplying, transferring or exporting certain goods and technologies to third countries.

Applicabilty of the clause: The no-Russia clause applies to the sale of the following goods and technologies:

• Goods and technologies listed in Annexes XI, XX and XXXV of Regulation 833/2014.
• Firearms and ammunition according to the list in Annex I of EU Regulation 258/2014

In order to fulfill the obligation, the contract with the partner from a third country must contain appropriate remedial measures in the event of a breach of a contractual obligation.

The responsible authority must also be informed in the event of a violation by the partner.

Far-reaching impacts

Overall, the twelfth sanctions package covers a wide range of topics. The new clause in particular is likely to trigger a need for action, as the scope of application covers all third countries with the exception of a few partner countries.

The amendment requires a careful review of contracts, business relationships and other business activities in order to identify and eliminate potential risks and not violate the provisions of the regulation.

Conclusion

The clause marks a significant step in EU policy towards Russia and signals that the European Union is prepared to take decisive action against violations of international norms and principles.