No Russia Clause updated from the EU

Article 12g of Council Regulation 833/2014 released on February 22, 2024, aims to combat the circumvention of EU export bans; more specifically, situations where goods exported to a third-party country are then re-exported to Russia. Some EU exporters/importers will be required to implement a "No Russia clause" in their contracts. While others will need to contractually prohibit re-exporting certain goods to/for use in Russia when dealing with a third-party country. 

The list of goods affected is limited to particularly sensitive items. Namely, goods listed in Annex XI suited for use in aviation or the space industry (including brake linings and pads as well as aerials), jet fuel and fuel additives listed in Annex XX, firearms and other arms listed in Annex XXXV to Regulation 833/2014 or Annex I to the Firearms Regulation (EU) No 258/2012. Importantly, the obligation also applies to the trade with so-called common high priority items as listed in the newly introduced Annex XL to Regulation 833/2014, which encompasses a range of different items especially certain electronic parts.

What goods cannot be exported to Russia from the EU?

• cutting-edge technology (e.g. quantum computers and advanced semiconductors, electronic components, and software)
• certain types of machinery and transportation equipment
• specific goods and technology needed for oil refining.
• energy industry equipment, technology, and services
• aviation and space industry goods and technology (e.g. aircraft, aircraft engines, spare parts, or any kind of equipment for planes and helicopters, jet fuel)
• maritime navigation goods and radio communication technology
• a number of dual-use goods (goods that could be used for both civil and military purposes), such as drones and software for drones or encryption devices.
• luxury goods (e.g. luxury cars, watches, jewelry)
• civilian firearms, their parts and other army materials
• chemicals, lithium batteries and thermostats
• other goods which could enhance Russian industrial capacities.

What goods cannot be imported from Russia to the EU?

• crude oil (from December 2022) and refined petroleum products.
• coal and other solid fossil fuels.
• steel, steel products and iron.
• gold and diamonds including jewelry.
• cement, asphalt, wood, paper, synthetic rubber, and plastics
• seafood and liquor (e.g. caviar, vodka)
• cigarettes and cosmetics
• diamonds

The obligation to include a “No Russia clauses” in contracts starts on 20 March 2024 but does not affect the execution of contracts concluded before 19 December 2023 until 20 December 2024 or until their expiry date, whichever is earlier. This transitional period however also means that contracts with a longer duration will likely need to be renegotiated. Article 12g (3) of Regulation 833/2014 further specifies that the exporter’s contract must provide “adequate remedies” if the contractual partner violations the “No Russia clause”. This could lead to include contractual fines or provide for the termination of the contract in case of a breach. In addition, exporters are required to inform the national authorities of such a contractual violation.

What does this mean to You?

•    Exporters/Importers who engage in exports of any of the listed restricted goods from EU countries need to be aware of the requirement to add the “No Russia Clause” into your sales contracts. 
•    Exporters/Importers must be vigilant when dealing with EU origin imports in ensuring, where practicable, that transshipments are not instigated to prohibited countries following importation. 

Any questions please get in touch with your local team or email: globaltradecompliance@craneww.com.