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Sanctions – EU sectoral sanctions match media reports

Yesterday, the EU Official Journal published Regulation No. 883/2014, and Council Decision 2014/512/CFSP underpinning it (full texts here), which lay out the legal formulations for the sectoral sanctions announced earlier this week. The restrictions include i) the prohibition of sales/transfer of dual-use goods and technology; ii) the requirement of prior authorisation for the sale/transfer of certain technologies for the oil industry; and iii) restrictions on access to the capital market for five state-owned banks (four sanctioned by the US and Sberbank). The capital markets access restrictions are confined to purchasing/selling/brokering/assistance in issuance bonds with a maturity exceeding 90 days and shares issued after 1 August 2014. The Decision underpinning the Regulation stipulates (Article 9) that i) it applies until 31 July 2015; ii) shall be kept under constant review; iii) the restrictive measures shall be reviewed not later than 31 October.
Our View: The inclusion of Sberbank on the list is a small negative, in light of the upbeat expectations triggered by its absence on the OFAC designations issued on 29 July. Otherwise, we highlight the explicitly temporary nature of the restrictions introduced and the Council’s intention to review them no later than in three months.
Alexei Zabotkin, Vladimir Kolychev
VTB Capital analyst


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