Legal Updates

 Financial RegulationFebruary 25, 2022

EU sanctions relating to Ukraine

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On 23 February 2022, the European Council agreed a new package of restrictive measures (a.k.a. sanctions) in response to the Russian Federation’s recognition of the independence of Donetsk and Luhansk in Ukraine, and its decision to send Russian troops into those areas.

All EU Member States must comply with EU Council Regulations relating to sanctions as soon as they are adopted. The new EU sanctions package was adopted on 24 February 2022.

The latest measures include: (1) restrictions on individuals and entities associated with the situation in Ukraine; (2) restrictions on trade between the affected regions and the EU; and (3) restrictions on Russian state entities, including its Central Bank, from accessing EU capital markets. The EU has reiterated its unwavering position supporting Ukraine’s independence, sovereignty and territorial integrity and has said that it will impose further wide-ranging sanctions if required.

EU leaders are convening in Brussels today to discuss further measures which were agreed in principle at the emergency summit yesterday, with a view to adopting same. These further proposed measures will target Russia’s financial, energy and transport sectors as well as introducing new export controls and visa restrictions.

Latest Sanctions Package

The new sanctions package imposes restrictive measures on certain Russian and related individuals and entities, restrictions impacting economic relations with the affected regions, and financial restrictions on Russian state entities.

Targeted restrictive measures on individuals and entities

Targeted restrictive measures will apply to all 351 members of the Russian State Duma (parliament's lower house), who voted in favour of the appeal to President Putin to recognise the independence of the Donetsk and Luhansk regions of Ukraine. Sanctions were also imposed on a further 27 individuals and entities for their involvement in undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. These restrictive measures include an asset freeze and a prohibition on making funds or economic resources of any kind available to the listed individuals and entities, together with an EU-wide travel ban on the listed persons.

Restrictions on economic relations with Donetsk and Luhansk

New measures target trade between the Donetsk and Luhansk regions and the EU. The measures include an import ban on goods from the regions, restrictions on certain trade and investment activities, restrictions on tourism services, and an export ban in relation to certain goods and technologies.

Economic sanctions

The EU also imposed a sectoral prohibition on financing the Russian Federation, its government and the Russian Central Bank. The European Council is seeking to restrict the Russian state and government from accessing the EU’s capital and financial markets.

History of EU sanctions in respect of situation in Ukraine

The first EU sanctions in relation to the situation in Ukraine were adopted in 2014, following Russia’s illegal annexation of Crimea. Since then, the measures have been extended and expanded throughout the years 2015-2022. The new sanctions package further extends the scope of the restrictive measures.

Since the first sanctions were imposed, the EU has adopted the following types of restrictive measures:

  • diplomatic measures;
  • restrictive measures on individuals and entities;
  • restrictions on economic relations with Crimea and Sevastopol, and now, Donetsk and Luhansk;
  • economic sanctions; and
  • restrictions on economic cooperation with Russia.

Implications for Irish financial service providers

EU Council Regulations have direct effect in Ireland and, therefore, must be complied with by all Irish natural and legal persons in the same way as domestic Irish legislation. Irish financial service providers should therefore ensure that they are compliant with these new financial sanctions. Compliance will necessitate conducting ongoing monitoring of transactions and customers/investors.

The updated list of sanctioned persons in relation to the situation in Ukraine now contains 555 individuals and 52 entities. There is a legal obligation on financial service providers to freeze the assets or funds of a sanctioned person or entity, and to refrain from transferring funds or making funds or economic resources of any kind available, directly or indirectly, to a sanctioned person.

The Central Bank of Ireland must be notified of all relevant information if a financial sanctions breach (or a suspected financial sanctions breach) has been identified, known as a sanctions ‘hit’.

Central Bank Notification

The Central Bank is a competent authority for EU financial sanctions and is responsible for the administration, supervision and enforcement of financial sanctions in Ireland in respect of financial service providers.

If there is a sanctions ‘hit’ on an individual or an entity, the financial service provider must immediately freeze the account of the individual or entity and/or immediately stop the transaction. The financial service provider is obliged to immediately report the hit to the Central Bank including all relevant information.

A Sanctions Return Form is available from the Central Bank’s website. The Central Bank can be contacted in respect of applications for prior authorisation/notification and to make financial sanctions reports at

Financial service providers should note that the Central Bank expects, prior to submitting a report, that they take reasonable steps to verify that the person or entity identified is the same person or entity as that listed in the relevant sanctions list (i.e. by verifying the name with other identifying information).

The Central Bank also has Financial Sanctions: Frequently Asked Questions (FAQs) for Credit and Financial Institutions available to assist credit and financial institutions by providing further information on the EU’s and United Nation’s sanctions regimes.

A new webpage dedicated to the Russian sanctions in relation to Ukraine was published by the Central Bank this week.

Given the ongoing developments in Ukraine and the planned meeting in Brussels of EU leaders today to discuss further restrictive measures, firms are advised to monitor developments.

Source material

Council Regulation (EU) 2022/259 of 23 February 2022 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

Council Implementing Regulation (EU) 2022/260 of 23 February 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

Council Implementing Regulation (EU) 2022/261 of 23 February 2022 implementing Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine.

Council Regulation (EU) 2022/262 of 23 February 2022 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine.

Council Regulation (EU) 2022/263 of 23 February 2022 concerning restrictive measures in response to the recognition of the non-government controlled areas of the Donetsk and Luhansk oblasts of Ukraine and the ordering of Russian armed forces into those areas.

If you have any questions relating to this briefing, please contact the authors or your usual Dillon Eustace contact.

DISCLAIMER: This document is for information purposes only and does not purport to represent legal advice. If you have any queries or would like further information relating to any of the above matters, please refer to the contacts above or your usual contact in Dillon Eustace.

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