Non
poperoutline
of
on
initior package
ol
torgeted
meosures
in
the
oreas
of
access
to
copitol morkets,
defence,
duor
use
goods
and
sensitive
technorogies
ln line
with the
European council conclusions of 21 March and
21 June
as
well
as
of the
statement ofthe
Heads
of state and Government on ukraine of 27
May,
the
16 Jury
European councir
took
a
serres
of
steps
to
reinforce restrictive
measures
in
view
of
Russia's
action
destabilising
the
situation
in
Ukraine.
These
include:
the
expansion
of the
rist
of
designations
to
incrude persons and entities
that ardsupportingmaterially
or
financiaily
actions undermrning
or
threatening
Ukraine,s
territoriar
integrity,sovereignty and independence.A
further
modification
to
the criteria
with
a view
to
ailow
targeting
individuars
or
entities
who
actively
provide
materiar
or
financiar
support
to, or
are benefiting from,
the
Russian
decision-makers
responsibre
for the
annexation
of
crimea or
the
destabilisation
of
Eastern-Ukraine.
o
The request
to
the
ErB
to
suspend
the
signature
of
new financing operations
in
the
Russian
Federation and
the call
to
EU
Member states
to
coordinate
their
positions
within the
EBRD
Board
of Directors
with
a
view
to
also suspending
financing of new operations.
'
The invitation
to
the
commission
to
re-assess Eu-Russia
cooperation
programmes
with
a
viewto
taking
a
decision, on
a case
by
case basis,
qn
the
suspension
ofthe
imprementation
of
EU
bilaterar and
regionar
cooperation programmes. However, projects
dearing excrusivery
with
cross-border cooperation
and
civil society would
be
maintained.
'
The
adoption of additional
measures
in particular
restricting
trade with
and investments
inCrimea and Sevastopol.
lmplementation
of
these
measures
is
underway
with
a
view to finarising
them
by
the end
of
Jury.
Further to taking these
measures,
the
Jury
European councir
recafled
that,,the
commission and
EEAS
have been undertaking preparatory
work on targeted
measures, as
it
requested
in
March, so
thatfurther
steps can be
taken
without
delay
At
its
meeting
on 22
JulY
2014,
the
Foreign
Affairs
Council
also
stressed
its
readiness ,,to introduce
without
delay
a
package
of further
significant restrictive
measures,,.
To this
the
end
the
councirrequested the commission
and
the
EEAS
to finarise preparatory work on
possible
targeted
measures
and present
proposars
for
taking action, incruding
in
the
areas
of
access
to
capitar markets, defence,dual
use
goods,
and
sensitive technorogies,
incrudrng in
the
energy
sector. The
resurt
ofthis
work
wiil
be
presented
on
Thursday
24
July .
The
Foreign
Affairs
Council also agreed
to
expand
the restrictive
measures
with
a
view
to targeting
individuals or entities who actively provide material or financial support
to
or are benefiting from
the
Russian
decision-makers responsible
for the
annexation
of
Crimea
or the
destabilisation
of
Eastern
Ukraine.
ln line with this reques the
non-paper
outlines a
number
of
measures
that
could
be
taken
in
the
areas
set out by the
Council conclusions and
the
procedure
that
should
be
followed
to
adopt the
relevant
legal
instruments.
The
document builds
on
the
preparatory
work
conducted
by
the Commission
services,
in cooperation
with the
EEAS,
in
response
to the
mandate given
by
the
March European Council. Different
scenarios
were identified
and.tested
with
regard
to their
impact on
the
EU
economy and on
the
economies
of
each
Member
States. This was
the
basis
for the
preparation
of
country
fiches
with
an
economicimpact assessment,
which
were shared
with
the
Member States.
ln
light of the
feedback received,
the
analysis was
further
refined.The
work on
the
possible
form of
an initial set
of
EU
sectoral sanctions has
been guided by thefollowing
principles:
4i
.
Effectiveness
lintensity of impact
on
the
Russian
economy)
o
Cost/benefit
rotio
(taking
into
account adverse impacts on
the
EU
ecotpmy,
indudingfrom
possible
symmetric or asymmetric
Russian
retaliations)
o
Bolonce across
sectors
and across
Member
States
.
Coordinotion
with
sanctions adopted by
the
US,
G7
partners and
othercountries
o
Scolobitity
/
reversibility
over
time;
.
Legol
defensibility of the measures/eose
ol
implementotion
by
economic
operotoB.
Reflecting this preparatory work,
the
package
of
measures
presented
in
this
paper contains
mearres
aimed
at
affecting
Russian
calculatlons
of
costs
and
benefits
in
the
management
of the
sbb,
minimising adverse impact on
the
EU
and maintaining
space
for
diplomatic action and
for
scali.E upor
reversing
the
restrictions in light of developments
on
the ground.
It
is
for
Member
States
to
decide
on the timing
and
the
modulation they want
to
have
for
suchmeasures. The
Commission
is ready
to table
the
necessary
legislative proposals in all
areas
identified,
once so
requested
by
the council.
Restrictions
oa
dccess
to
Eat
copitol morkets
lor
Russion
stote-owned
finonciolinstitutions
Torgeted
medsures
in
the
oreos
of
access
to
copitol
morkets,
defence,
dual
use
goods
ond
sensitivetechnologies
Russian
companies
and
financial institutions are heavily dependent on
EU
capital markets:
.
Between 2004
and 2012
a
total
of
USD
4g.4bn
was
raised
through
lPOs in
the
EU
by
companies incorporated in
Russia.
Out
of
those,
USD 15.4bn
was
issued
by
state-owned
financial
institutions.
o
ln
2013,
47
ol
the
bonds
issued
by
Russi*n
public
financial
institutions
were
issued in
the
EU's
financial markets (
7.5bn
out
of
a
totat
of 15.8bn).Restricting
access
to
capital
markets
for
Russian
state-owned financial
institutions would
increase
their
cost
of
raising
funds and
constrairt.their
ability
to
finance
the
Russian
economy, unless
the
Russian public
authorities
provide
them with
substitute financing.
lt would
also
foster
a
climate
of
market
uncertainty
that is
likely
to
affect
the
business
environment in
Russia and
accelerate capital outflows.
With
regard
to
the scope
ofthe
restriction,
the
measure
would
consist
in
prohibiting any
EU persons
from
investing
in
debt, equity and
similar
financial instruments
with
a
maturity
higher
than 90
days,
issued
by
state-owned
Russian
financial
institutions
after the entry into force
of
the
restrictive measure anywhere
in
the
world. lt
would
also be
prohibited
to
provide investment services and any service
in
relation
to the
admlssion
to
trading
on a
regulated market
or
trading
on a
multilateral
tradingfacility
with
regard
to
the
same
financial instruments.
With
regard
to
the
entities
targeted, the
measure would
tar
et
Russian
state-owned
credit institutions
(banks
with
over
50
public ownership),
as
well
as
development finance institutions.The
prohibition would extend both
to
primary
markets
(flrst
issue)
and
secondary
(subsequent
trading)
market
of
the
newly issued
Russian
securities.
Existing shares
and bonds
would not
be covered. Transactions
other than
those mentioned before
with the
targeted entities would
remain
possible,
u
|