* restricting access of key Russian state-owned financial and credit institutions to the EU capital markets and related financial services;

* restricting the sale, supply, transfer or export of certain technologies for use in the oil industry (including oil exploration) in Russia;

* restricting exports of 'dual-use' goods and technologies and supplies of arms or military equipment;

* prohibiting the importation of goods originating in Crimea or Sevastopol;

* prohibiting the sale, supply or transfer of key equipment and technological goods needed for the creation, acquisition or development of infrastructural projects in Crimea and Sevastopol, such as bricks;

* significantly expanding the list of 'designated persons' subject to EU-wide travel bans and asset-freezing legislation established in March 2014 when Russia annexed the Crimea.

We focus on the first and last of these below.

Restrictions on access to EU capital markets and financial services

Under Council Regulation (EU) 833/2014 the EU has prohibited the purchase, sale, provision of brokerage or assistance in the issuance of, or otherwise dealing with 'transferable securities' and 'money market instruments' with a maturity exceeding 90 days issued by Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) or Rosselkhozbank (“Annex III listed entities”). The restrictions extend to the issue of related parties that are not based in the EU. The new prohibitions apply to new issues made on or after 1 August.

It is important to distinguish between the Annex III listed entities mentioned above and so-called 'designated persons' named under the wider EU sanctions programme affecting Ukraine and Russia: In essence, this new prohibition might only affect dealings in the issuance of the Annex III listed entities and related (i.e. Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Rosselkhozbank) with a maturity in excess of 90 days.

Other assets of these institutions located in or held by persons based in the EU will not necessarily be subject to the wider asset freeze under the 'designated person' regime (see further below).

The new measures are designed to frustrate these Russian state-owned financial institutions in their efforts to raise capital in the EU and work in tandem with similar new restrictions in the United States and other industrialised nations, including Japan. Furthermore, under this new EU regime the Council of the EU does not allow member states to issue licences or authorisations as a way of ameliorating the effect of the new offences, in contrast to the asset-freezing regime.

Persons in the EU and its countries' dependencies (such as the BVI and Cayman Islands) including, for example, wholly unaffiliated service-providers such as brokers, underwriters and investors, dealing or potentially affected by the new prohibitions should seek immediate legal advice on their rights and obligations under the new regime.

Revised list of designated persons subject to asset-freezes and travel bans

Separate to the restrictions on the capital markets above, the EU has also included a significant number of extra Ukrainian and Russian individuals and companies, on the sanctions regime imposing asset freezes and travel bans on 'designated persons'. In May 2014 Council Regulation (EU) 476/2014 added the following persons to the list.

* Vyacheslav Viktorovich VOLODIN

* Vladimir SHAMANOV

* Vladimir Nikolaevich PLIGIN

* Petr Grigorievich JAROSH

* Oleg Grigorievich KOZYURA

* Viacheslav PONOMARIOV

* Igor Mykolaiovych BEZLER

* Igor KAKIDZYANOV

* Oleg TSARIOV

* Roman LYAGIN

* Aleksandr MALYKHIN

* Natalia Vladimirovna POKLONSKAYA

* Igor Sergeievich SHEVCHENKO

* PJSC CHERNOMORNEFTEGAZ

* FEODOSIA.

The addition of the last two entries is a novelty. Corporate entities are now the targets of the EU's campaign against Russia and Ukraine, alongside the usual politicians and businessmen,.

In late July further important and controversial additions were made under Council Regulation (EU) 826/2014. For the first time, high-profile Russian businessmen who had not been directly involved in the crisis in Eastern Ukraine or the Crimea but were known to be close to the Russian President Vladimir Putin, were included on the list. The United States took this step months ago and we have been expecting it in the EU for some time. For the sake of completeness, the entire list of persons added in July comprises the following.

* Alexey Alexeyevich GROMOV,

* Oksana TCHIGRINA,

* Boris LITVINOV,

* Sergey ABISOV,

* Arkady Romanovich ROTENBERG,

* Konstantin Valerevich MALOFEEV,

* Yuriy Valentinovich KOVALCHUK,

* Nikolay Terentievich SHAMALOV,

* JOINT-STOCK COMPANY CONCERN ALMAZ-ANTEY (a.k.a. ALMAZ-ANTEY CORP; a.k.a. ALMAZ-ANTEY DEFENSE CORPORATION; a.k.a. ALMAZ-ANTEY JSC;),

* DOBROLET, a.k.a. DOBROLYOT and RUSSIAN NATIONAL COMMERCIAL BANK.

All EU-based assets held directly or indirectly by so-called designated persons or otherwise through EU-based entities (a loose term that includes BVI and Cayman entities) based anywhere in the world are effectively frozen by this part of the Russia-Ukraine sanctions regime.

EU sanctions in Cyprus

Cyprus has been a member-state of the EU since 2004. The EU’s sanctions have full effect there and apply to Cypriot companies and citizens whereever they may be based. Constitutional arrangements in Cyprus provide for the automatic criminalisation of activities prohibited under that regime. Breaches of the prohibition against access to capital markets or of the asset-freezing regime constitute a criminal offence in Cyprus.

EU sanctions in the British Virgin Islands and Cayman Islands

The BVI and the Cayman Islands are overseas territories of the United Kingdom. Though the UK is an EU member-state, its overseas territories, excluding Gibraltar, are not. They are nevertheless subject to the UK’s foreign policy, which the EU dictates. Because of this, both the BVI and Cayman observe the EU sanctions regime affecting Ukraine and Russia and have substantially brought it into force.

Breach of the asset-freezing measures applicable to designated persons described above, including on the newly listed persons, constitutes a criminal offence in the BVI and the Cayman Islands under the revised framework of the Ukraine (Sanctions) (Overseas Territories) (No.3) Order 2014. We understand that breach of the new prohibition against access to capital markets is due to be criminalised in October.

* Peter Tarn can be reached on +44 207 842 6082 or at peter.tarn@harneys.com