1. Oil import restrictions
Perhaps the most awaited (and contested) restriction the Member States have agreed to impose is an embargo on the imports of crude oil and refined oil products from Russia. These sanctions come into force with immediate effect – subject to certain wind-down provisions and limited exceptions – and will phase out Russian oil imports in an organized fashion.
The EU will prohibit the import of seaborne crude oil from Russia with a transitory period of six months for existing contracts and spot transactions. The EU will also prohibit the import from Russia of refined petroleum products after a transitory period of eight months for existing contracts and spot transactions. Importantly, there are also reporting obligations as follows:
- For reliance on pre-existing contracts, the underlying transaction must have been reported to the relevant Member States by 24 June 2022; and
- For the “one-off transaction for near-term delivery” (i.e., spot transaction), all aspects of the transaction (including transportation) should be reported to the relevant Member State authority within 10 days of its completion.
There are still many unanswered questions about reporting obligations – such as who is required to report, and to which country do you report if there are multiple EU countries/nationals involved. Those questions still need to be resolved.