On 15 July 2022, the European Commission (EC) adopted a ‘maintenance and alignment’ sanctions package against Russia, to supersede the rapidly changing ad hoc sanctions policy introduced after the Russian invasion of Ukraine.

The continually extending nature of EU, US and UK sanctions over the past few months has put considerable pressure on financial institutions (FIs) worldwide, which have tended to over-comply in order to keep up with the pace of change. A recent report from the United Nations Human Rights Office of the High Commissioner notes global banks' over-cautious approach and acknowledges that the position has been made difficult by the complexity of the unilateral sanctions regimes, burdensome administrative processes, extraterritorial enforcement of sanctions and magnitude of financial or business penalties for breaching sanctions.

The EC’s new proposal clarifies certain provisions for operators and enforcement by Member States, aligning EU sanctions with the G7 group of countries, for example by introducing a new import ban on Russian gold. It emphasises that trade in agricultural products is not affected.

The proposed package will now be discussed by EU Council ministers. If accepted, the sanctions will be formally extended for a further six months, until the next review at the end of January 2023...