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Sanctions Russia – Export Controls & Trade & Investment Sanctions



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Sanctions, negative effective measures, which has been set to
Russia are to be updated, expanded as well as practices are to
become more precise. The most recent sanctions are implementing Regulation (EU) 2022/427 as well as Regulation (EU) 2022/428.

New liabilities established to credit institutions | European
Banking Authority

Credit institutions operating in Finland must provide to the
Ministry for Foreign Affairs of Finland information on deposits
exceeding of EUR 100,000 from Russian and Belarusian nationals. For
reporting, the European Banking Authority (EBA) has developed
guidelines and document form. The report must be submitted to the
Ministry for Foreign Affairs of Finland by 27 May 2022 (dead line).
Obligation to submit the report is based on the Regulation (EU) No 833/2014 Art. 5 g
subparagraph 1a. It is possible to deviate from the set deadline
with the exception provided by the competent local authority.

The background to the notification obligation is Regulation (EU)
No 833/2014 Art. 5b which enacts the following prohibition:

“It shall be prohibited to accept any deposits from Russian
nationals or natural persons residing in Russia, or legal persons,
entities or bodies established in Russia, if the total value of
deposits of the natural or legal person, entity or body per credit
institution exceeds 100 000 EUR.”

A restriction on the application of the above prohibition is
that:

“Paragraph 1 shall not apply to nationals of a Member
State, of a country member of the European Economic Area or of
Switzerland, or to natural persons having a temporary or permanent
residence permit in a Member State, in a country member of the
European Economic Area or in Switzerland.”

It is to be noticed, that by way of derogation from the local
competent authority, it may authorise the acceptance of such a
deposit, under such conditions as they deem appropriate, after
having determined that the acceptance of such a deposit is
necessary and satisfies the requirements enacted in the
Regulation.

Also note that the competent authority may, subject to such
conditions as it deems appropriate, authorize the receipt of the
deposit. However, prior to authorisation the authority has to
determinate that the need enacted in the Regulation are satisfied.
It is for the national competent authority to decide on what
evidence is required to obtain supporting the exemption under Art.
5 c.

Our comments and views sanctions

In practice, we understand that credit institutions have
categorically limited deposits from Russian citizens. The
limitation being on the amount of EUR 100 000. In practice, this
has also led to difficulties for those persons and legal persons to
whom a ban on the restriction should not apply. These are, for
example, persons who have nationality or a permanent residence
permit in an EU country. In case such party is in need to receive
deposits in excess of the current limit, we recommend applying for
an exemption.

The above restriction has been imposed by credit institutions
despite the fact that the EU
Commission’s Q&A dated 17.5.2022
states in paragraph 12
that:

“This means that the accounts of Russian nationals who also
have the nationality of one the above countries can be credited
above EUR 100 000.”

Read more about sanctions from our article sanctions a legal labyrinth to business
lawyers
.

About the European Banking Authority | Reporting of sanctions
to the competent authority

The European Banking Authority (EBA) is made up of
three supervisory authorities: i) the European Securities and
Markets Authorities (ESMA); ii) the European Banking Authority
(EBA) and iii) the European Insurance and Occupational Pensions
Authority (EIOPA). The system also comprises the European Systemic
Risk Board (ESRB) as well as the Joint Committee of the European
Supervisory Authorities and the national supervisory
authorities.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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