The EU has introduced new measures that will require the notification of transfers of funds exceeding EUR 100,000 (US$109,439) out of the EU by entities in member states that are directly or indirectly owned by more than 40 per cent by Russians or entities established in Russia.

Letters of credit (L/Cs), bills of lading and bills of sale are amongst the trade finance instruments classified as 'funds' under the EU measures.

The measures are part of the EU's 12th package of sanctions against Russia. The focus of this package is to impose additional import and export bans on Russia, combat sanctions circumvention and close loopholes.

New measures

As of 1 May 2024, EU entities that are Russian-owned will have to report every quarter on any transfer of funds out of the EU exceeding EUR 100,000, in one or several operations.

From 1 July 2024, EU credit and financial institutions will have to report every quarter on transfers of funds out of member states that they initiate for EU entities that are Russian-owned where their cumulative amount exceeds EUR 100,000 EUR during that quarter.

Import and export bans

The inclusion of new import and export bans in the new EU package may also impact on L/C business.

These include a ban on the export of Russian diamonds to Europe and restrictions on transactions involving metal goods, and iron and steel products.

The package also tightens the implementation of the oil price cap by monitoring more closely how tankers may be used to circumvent the cap and extends the EU's import ban to liquefied petroleum gas (LPG), which has hitherto escaped inclusion in Europe's list of banned Russian hydrocarbon products.

The official EU statement, EU adopts 12th package of sanctions against Russia for its continued illegal war against Ukraine, can be found here.

A full catalogue of EU restrictive measures against Russia over Ukraine with links to all specific restriction on traded goods can be found here.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.