EU SANCTIONS AGAINST THE RUSSIAN FDERATION – TRANSFERABLE SECURITIES (Post 6)

Following is part 6 of our series on current European Union sanctions against the Russian Federation. Before continuing, be sure to catch up on our previous posts regarding sanctions against the Russian Federation:

Post 1:  EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – AN OVERVIEW
Post 2:  EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – MARCH 2022
Post 3: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – APRIL & JUNE 2022
Post 4: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – CRIMINALIZATION OF SANCTION VIOLATIONS
Post 5: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – LUXURY GOODS

POST 6: TRANSFERABLE SECURITIES

Since March 2014, the European Union has imposed a number of restrictive measures against the Russian Federation in response to its occupation of Crimea and some parts of Donetsk and Lugansk regions of Ukraine. In February 2022, after increased military aggression against Ukraine, more restrictive measures followed. Among these are restrictions regarding transferable securities and money-market instruments.

In particular, Article 5 of the Council Regulation 833/2014 has been amended to prohibit the purchase, sale, or administration of investment services or otherwise to deal with transferable securities and money-market instruments with a maturity exceeding 30 days, issued after 12 September 2014 to 12 April 2022 or any transferable securities and money market instruments issued after 12 April 2022 by:

(a) a major credit institution, or other major institution having an explicit mandate to promote the competitiveness of the Russian economy, its diversification, and encouragement of investment, established in Russia with over 50 % public ownership or control as of 1 August 2014, as listed in Annex III to the Regulation; or

(b) a legal entity, established outside of the Union, directly or indirectly, with 50 % ownership by an entity listed in Annex III of the Regulation.

Also prohibited is the sale of euro-denominated transferable securities issued after 12 April 2022 or shares in collective investment initiatives to any Russian national or any legal entity established in Russia, with the exception of EU nationals or persons having EU residence permits. The prohibition relates to securities issued by both private and public companies. It does not apply to entities owned by Russian nationals or persons residing in Russia when the entities have been registered in a different country.

The new changes also do not allow for central securities depositories of the European Union to provide services related to transferable securities issued after 12 April 2022 to any Russian national, legal entity or natural person residing in Russia.

Furthermore, from 12 March 2022 onwards, it is prohibited to provide specialized financial messaging services for the exchange of financial data to legal entities established in Russia which have been sanctioned or to any legal entities with an ownership structure in which 50% or more of the ownership share belongs to a sanctioned company or individual.

These restrictive measures strive to limit the access of Russian entities and individuals to financing opportunities in the territory of the European Union.

See also Post 7: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – JULY 2022 PACKAGE

**Our series of articles on EU restrictive measures are provided for information purposes only and do not constitute legal advice. For professional advice tailored to your particular case, please contact us at: .**