On 10 August 2022 the EU published updated FAQs clarifying the application of provisions relating to the carriage of certain cargoes from Russia, including coal and other solid fossil fuels as well as certain types of fertilizer. These clarifications will have a significant impact on the carriage of these commodities by EU entities and the provision of insurance for carriage to any entity regardless of their domicile.
As Steamship Mutual says, on 8 April 2022 the EU published Council Regulation 2022/576 which amended Regulation 833/2014 and contained the following provisions:
Article 3i
#1 It shall be prohibited to purchase, import, or transfer, directly or indirectly, goods which generate significant revenues for Russia thereby enabling its actions destabilising the situation in Ukraine, as listed in Annex XXI into the Union if they originate in Russia or are exported from Russia.
#2 It shall be prohibited to:
- provide technical assistance, brokering services or other services related to the goods and technology referred to in paragraph 1 and to the provision, manufacture, maintenance and use of those goods and technology, directly or indirectly in relation to the prohibition in paragraph 1.
- provide financing or financial assistance related to the goods and technology referred to in paragraph 1 for any purchase, import or transfer of those goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly in relation to the prohibition in paragraph 1.
#3 The prohibitions in paragraphs 1 and 2 shall not apply to the execution until 10 July 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.
#4 As of 10 July 2022, the prohibitions in paragraphs 1 and 2 shall not apply to the import, purchase or transport, or the related technical or financial assistance, necessary for the import into the Union, of:
- 837 570 metric tonnes of potassium chloride of CN 3104 20 between 10 July of a given year and 9 July of the following year;
- 1 577 807 metric tonnes combined of the other products listed in Annex XXI under CN 3105, 20, 3105 60 and 3105 90 between 10 July of a given year and 9 July of the following year;
#5 The import volume quotas set out in paragraph 4 shall be managed by the Commission and the Member States in accordance with the management system for tariff-rate quotas provided for in Articles 49 to 54 of Commission Implementing Regulation (EU) 2015/2447.
Article 3j
#1 It shall be prohibited to purchase, import, or transfer, directly or indirectly, coal and other solid fossil fuels, as listed in Annex XXII into the Union if they originate in Russia or are exported from Russia.
#2 It shall be prohibited to:
- provide technical assistance, brokering services or other services related to the goods and technology referred to in paragraph 1 and to the provision, manufacture, maintenance and use of those goods and technology, directly or indirectly in relation to the prohibition in paragraph 1.
- provide financing or financial assistance related to the goods and technology referred to in paragraph 1 for any purchase, import or transfer of those goods and technology, or for the provision of related technical assistance, brokering services or other services, directly or indirectly in relation to the prohibition in paragraph 1.
#3 The prohibitions in paragraphs 1 and 2 shall not apply to the execution until 10 August 2022 of contracts concluded before 9 April 2022, or ancillary contracts necessary for the execution of such contracts.
The EU have made it clear to the IG that whilst the reference to “import” in the Articles is indeed just limited to import into the EU, the other restrictions on direct or indirect transfers are intended to equally apply to non-EU destinations. It is therefore now the case that the involvement of an EU entity in the carriage of Russian fertilisers and coal or other solid fossil fuels to any destination whatsoever and whether inside or outside the EU would be in breach of EU sanctions.
Furthermore, the EU Commission has clarified to the IG that the prohibition on the provision of “financial assistance” in sections (2)(b) of both Article 31 and 3j and which includes insurance and reinsurance services prevents any entity subject to the jurisdiction of the EU from providing insurance and reinsurance for the carriage of Russian fertilisers and coal and other solid fossil fuel cargoes regardless of destination.
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