Consolidated FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014 [Version of 31 October 2023]

The EC has published an updated consolidated version of its FAQs on the implementation of Council Regulation No 833/2014 and Council Regulation No 269/2014 in light of the ongoing conflict in Ukraine. The consolidated version includes FAQs concerning EU sanctions adopted following Russia’s military aggression against Ukraine.
Below we present the affected updated (new) questions in full, together with a brief summary of the corresponding answers:

Section C „FINANCE AND BANKING“, topic 4 „CENTRAL BANK OF RUSSIA“
New Question 11 (p.57) Does the payment to fulfill the “obligation to pay voluntary transaction” (обязательствопо осуществлению добровольного направления, so-called “exit tax”) fall under the definition of “…transactions related to the management of reserves as well as assets” in Article 5a(4) of Council Regulation 833/2014?
Answer: The ‚exit tax‘ imposed by the Russian Governmental Commission, as per Presidential Decree No. 618 of 2022, is not part of Russia’s official tax legislation. It serves as a prerequisite for EU companies divesting from Russia, distinct from the Russian Central Bank’s asset management. Article 5a is irrelevant to this tax, as it doesn’t apply to the mandated payment, emphasizing its unique regulatory nature under the presidential decree.

Section G „SECTOR SPECIFIC QEESTIONS“, topic 5 „STATE-OWNED ENTERPRISES“
Amended Question 2 (p.274) What does “acting on behalf or at the direction of” mean?
Answer: Article 5aa(1)(c) prohibits transactions with legal entities or bodies „acting on behalf or at the direction of“ entities listed in Article 5aa(1)(a) or (b) to prevent evasion of EU sanctions by entities in Annex XIX. The European Commission offers guidance, including criteria from an opinion dated 17 October 2019, to determine this concept.
The criteria consider ownership and control structures, transaction nature, business duties, past instances of compliance, disclosures, and factual evidence of direction. For example, if a company once under Article 5aa(1)(b) modifies its ownership structure to reduce Annex XIX entity ownership to 50% or less, especially within the same corporate group or near Annex XIX inclusion, it may be seen as „acting on behalf of.“
If suspicions arise, the prohibition mandates the termination of benefits. A reasonable wind-down period (e.g., 60 days) may be allowed if ending transactions could impact supply security.