The European Union continues its efforts to strengthen sanctions against Russia and prevent the circumvention of export bans. In December 2023, the EU introduced a new measure as part of its twelfth package of sanctions, necessitating EU exporters and suppliers to include a “no re-export to Russia” clause in their contracts with non-EU operators. This article provides an overview of this requirement and outlines essential elements for ensuring compliance.


Understanding the Clause:

Article 12g of Council Regulation 833/2014 mandates EU exporters to prohibit the re-exportation of certain goods to Russia when dealing with non-EU entities. The clause applies to goods listed in specific Annexes of the Regulation and extends to various types of agreements beyond sales contracts.


Entry Into Force and Impact:

The inclusion of the “no re-export to Russia” clause depends on the contract’s conclusion date. Contracts finalized before December 19, 2023, benefit from a transition period until December 19, 2024, for compliance. Contracts concluded after December 19, 2023, must include the clause from March 20, 2024, onwards.


Essential Elements of the Clause:

The European Commission issued guidance to clarify the clause, recommending a template for EU operators to use. Adequate remedies for breach by importers, such as contract termination and penalty payments, are crucial for effective enforcement.

Recommendations:

EU exporters are advised to implement due diligence procedures to prevent the diversion of sanctioned items to Russia. Expanding the scope of the “no re-export to Russia” clause to cover other sanctioned EU goods is recommended. Additionally, due diligence measures should be applied when engaging with operators in partner countries to mitigate risks of circumvention.

Complying with the “no re-export to Russia” clause is essential for EU exporters to adhere to regulatory requirements and prevent sanctions evasion. By understanding the scope of the clause, adhering to entry into force provisions, and incorporating essential elements, exporters can ensure compliance and contribute to the effectiveness of EU sanctions against Russia.