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Preventing Russian Export Control and Sanctions Evasion: Updated Guidance for Industry
Part of the G7 Sub-Working Group on Export Control Enforcement’s coordinated efforts is to provide guidance to industry on preventing the diversion of controlled items to Russia, including through third countries. Their collective aim is to assist industry in identifying Russian evasion practices and complying with GECC controls, thereby protecting their technology from misappropriation, preventing reputational harm, and mitigating liability
risk while supporting the continued success of our export controls and sanctions.This guidance document contains:
- A list of items which pose a heightened risk of being diverted to Russia,
- Updated red flag indicators of potential export control and/or sanctions evasion,
- Best practices for industry to address these red flags, and
- Screening tools and resources to assist with due diligence
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Restrictive Measures Against Russia: The Confiscation of the Entire Proceeds of a Brokering Transaction Covered by the Prohibition on Providing Brokering Services for Military Equipment is Permitted
Romanian aerospace firm Neves 77 Solutions SRL was fined around 6,000 euro for brokering services related to military equipment to a Russian operator. The company collected 3 million euros for providing such services, leading to a confiscation of the brokerage fee. The Court of Justice ruled that it is illegal to offer such services to a Russian operator, even if the equipment was never imported into the EU. The court also noted that EU law allows for automatic seizure of entire sums related to military equipment brokerage services.
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A notary does not breach the sanctions against Russia when he or she authenticates the sale of a property owned by an unlisted Russian company
A notary public in Berlin refused to authenticate a contract for the sale of an apartment owned by a Russian firm, citing a ban on offering legal advice services to Russian legal persons. The Berlin Regional Court questioned the Court of Justice, which clarified that notary authentication is not covered by the prohibition on providing legal advisory services to Russian legal persons. Notaries do not need to provide legal advice for the procedures of executing an authenticated contract for real estate sale, including transferring the purchase price, cancelling debt, and registering ownership.
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