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Spurred by recent international events involving Ukraine, Russia, China, Iran, Venezuela, and North Korea, among others, complex export controls, economic sanctions and trade embargoes continue to evolve. In particular, the EU has adopted a wide range of restrictive measures against Russian individuals and entities in order to cripple Russia’s ability to finance the war. Navigating the complex landscape of EU sanctions can be challenging, particularly for companies operating in multiple jurisdictions or with international supply chains. MPC Legal’s sanctions compliance team offers specialized key services, as listed below, to help businesses remain compliant with the EU Sanctions while minimizing risk and ensuring smooth operations. Sanctions Risk Assessment MPC Legal performs comprehensive risk assessments to identify potential sanctions-related risks in your business operations. This involves analysing your supply chains, customer base, and partner relationships to detect any links to sanctioned entities or regions. A thorough risk assessment lays the foundation for a robust compliance strategy. Legal Consultation and Compliance Strategy Once risks are identified, our Firm can help you develop a tailored compliance strategy. This includes advising on EU sanctions regulations, offering legal opinions on the matter and providing guidance on how to align your business practices with the latest laws based on our people’s deep expertise in EU regulations who offer insights into best practices for compliance. Sanctions Screening and Due Diligence To ensure compliance with EU sanctions, it's essential to conduct thorough due diligence on customers, suppliers, and other business partners. MPC Legal can assist in implementing sanctions screening procedures, including conducting background checks and utilizing specialized software to identify sanctioned individuals and entities. This proactive approach helps you avoid costly compliance violations. Contract Review and Clause Development Sanctions compliance often requires specific clauses in contracts to protect your business. Our firm’s people can review existing contracts and develop new ones with appropriate sanctions-related clauses. These clauses help ensure that all parties understand their obligations in relation to EU sanctions and mitigate risks associated with non-compliance. Training and Education Compliance is a team effort, and a knowledgeable workforce is crucial for avoiding sanctions violations. MPC Legal can provide customized training sessions for your employees, covering EU sanctions regulations and compliance best practices. This training helps ensure that everyone in your organization understands the importance of compliance and knows how to recognize potential risks. Assistance with Regulatory Inquiries and Investigations If your business is subject to regulatory inquiries or investigations related to EU sanctions compliance, our experienced personnel can provide invaluable support. We can represent you during investigations, respond to information requests, and help you navigate the legal complexities involved. Our expertise can be instrumental in achieving favourable outcomes and minimizing disruptions to your business. Ongoing Monitoring and Compliance Audits EU sanctions regulations change frequently, requiring ongoing monitoring and adjustments to your compliance strategy. Our Firm offers services for continuous monitoring of sanctions lists and regulatory updates. Additionally, it can conduct regular compliance audits to ensure your business remains in line with EU sanctions requirements. Conclusion Compliance with EU sanctions is crucial for businesses operating within the EU and internationally. MPC Legal offers a comprehensive range of services to help you navigate this complex landscape. From risk assessment and compliance strategy to contract review and ongoing monitoring, our people’s expertise can guide you through the regulatory challenges and ensure your business remains compliant while minimizing the relevant risks. Investing in these services can ultimately safeguard your reputation and keep your operations running smoothly in an ever-changing regulatory environment.

 Sanctions adopted following Russia’s military aggression against Ukraine. The European Union (EU) continues to adopt further packages of economic sanctions against Russia due to the continuance of its military aggression against Ukraine, the latest of which is summarised below. The relevant legal framework is EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) (hereinafter collectively referred to as the “EU Sanctions”). Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days and these will be the subject of future articles. This information is: of a general nature only and is not intended to address the specific circumstances of any particular individual or entity; not necessarily comprehensive, complete, or up to date; not professional or legal advice (if you need specific advice, you may consult us). 16th SANCTIONS PACKAGE A new sanctions package, (the 16th package) was adopted on 24th of February 2025 by the European Union marking the third anniversary of Russia’s invasion of Ukraine. This new package was adopted through the Council Regulation (EU) 2025/395 of 24 February 2025 amending Regulation (EU) No 833/2014 concerning restrictive measures in view of Russia’s actions destabilising the situation in Ukraine and through the Council Regulation (EU) 2025/390 of 24 February 2025 amending Regulation (EU) No 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. The 16th package targets systemically important sectors of the Russian economy such as transport, energy, trade, infrastructure, and financial services. It also adds further measures aimed at tackling circumvention. It is noted that certain provisions of the 16th package are now also mirrored in the Belarus sanctions regime. The 16th package contains the following key elements: ANTI-CIRCUMVENTION MEASURES The 16th package targets 74 additional vessels, part of the shadow fleet or contributed to Russia's energy revenues, bringing the total number of listed vessels to 153. The measures add a new listing criterion, targeting those who support the operations of unsafe oil tankers. The package imposes targeted export restrictions on 53 new companies supporting Russia's military-industrial complex or engaged in sanctions circumvention, including 34 companies in countries other than Russia. ADDITIONAL LISTINGS This package includes 83 additional listings, including 48 individuals and 35 entities, such as those supporting the Russian military complex, active in sanctions circumvention, Russian crypto assets exchanges and in the maritime sector. TRADE MEASURES Direct import ban on Russian aluminium: In addition to the prohibition for imports of processed aluminum goods from Russia, already in place, this package includes a ban on EU imports of primary aluminium from Russia. Dual-use export restrictions have been extended to additional items in order to cut Russia's access to key technologies it has been using on the battlefield, covering among others the following: Dual-use chemical precursors to produce chloropicrin and other riot control agents used as chemical weapons by Russia in violation of the Chemical Weapons Convention. Software related to Computer Numerical Control (CNC) machine tools used to manufacture weapons, and video-game controllers used by the Russian army to pilot drones on the battlefield. Chromium ores and compounds due to their military applications. The limited derogations and exemptions for certain dual-use and advanced tech exports, e.g. for medical use, have been clarified and further tightened to support effective application by customs and licensing agencies. Moreover, additional export restrictions have been introduced on industrial goods, specifically targeting chemicals, minerals, glass materials, steel, and fireworks, with special military significance. ENERGY MEASURES EU also imposed full-fledge sanctions over three entities transporting Russian crude oil and oil products and providing substantial revenues to the Russian Government. TRANSPORT MEASURES The package extends the flight ban to enable the listing of third-country carriers conducting domestic flights within Russia or supplying aviation goods to Russian airlines or for domestic flight in Russia. If listed, these airlines will not be allowed to fly to the EU. Road transport prohibition: EU adds through this package an amendment that prevents increasing Russian ownership above 25% in EU road transport undertakings. INFRASTRUCTURE MEASURES Full transaction ban on specific Russian infrastructures including two Moscow airports (Vnukovo Airport and Zhukovsky Airport), four regional airports, the Volga port Astrakhan and Makhachkala port on the Caspian Sea and the sea ports Ust-Luga and Primorsk on the Baltic Sea and Novorossiysk on the Black Sea. FINANCIAL SECTOR MEASURES Since Russia has diverted much of its financial flows via smaller banks, the purpose of the 16th package is to strengthen EU measures on the financial sector. In particular, 13 financial institutions have been added to the list of entities subject to the prohibition to provide Specialised Financial Messaging Services (“SPFS”) and 3 banks have been included to the transaction ban due to their use of the Financial Messaging System of the Central Bank of Russia (SPFS) system to circumvent EU sanctions. Exception to the SPFS ban(a) strictly necessary for the direct or indirect purchase, import or transport of natural gas, titanium, aluminium, copper, nickel, palladium and iron ore from or through Russia into the Union, a country member of the European Economic Area, Switzerland, or the Western Balkans; (b) strictly necessary for the direct or indirect purchase, import or transport of oil, including refined petroleum products, from or through Russia, unless prohibited under Article 3m or 3n; (c) necessary for the purchase as well as import and transport into the Union of pharmaceutical, medical or agricultural and food products, including wheat and fertilisers, whose purchase as well as import and transport into the Union is allowed under this Regulation; (d) necessary for the repayment of a debt due to a national of a Member State or a legal person, entity or body established in the Union; (e) necessary for the payment of a pension scheme to a person established in the Union; or (f) necessary for a payment from or to the Jewish Claims conference. _______ Authors Marilou Pavlou Christodoulides | Partner Stella Kagia | Senior Associate

Sanctions adopted following Russia’s military aggression against Ukraine. The European Union (EU) continues to adopt further packages of economic sanctions against Russia due to the continuance of its military aggression against Ukraine, the latest of which are summarised below. The relevant legal framework is EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) (hereinafter collectively referred to as the “EU Sanctions”). Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days and these will be the subject of future articles. This information is: of a general nature only and is not intended to address the specific circumstances of any particular individual or entity; not necessarily comprehensive, complete, or up to date; not professional or legal advice (if you need specific advice, you may consult us). 14th SANCTIONS PACKAGE On June 24 2024, the European Union ("EU") adopted its 14th sanctions package )  (the “New package”) against Russia through Council Regulation (EU) 2024/1739 of June  24,2024 amending EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and through Council Regulation (EU) 2024/1745 of June 24,2024 amending EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) respectively (hereinafter collectively referred to as the “EU Sanctions”). The New package aims to strengthen the measures for the prevention of EU sanctions circumvention and targets Russian economy’s high-value sectors such as trade, finance and energy. The New package: Added 69 natural persons (individuals) and 47 entities to its restricted parties list. The newly listed individuals are also subject to travel ban measures. Enhances sectoral sanctions targeting Russia via the establishment of new tools to combat EU sanctions circumvention, introducing sanctions against Russian liquefied natural gas, reinforcing existing import and export related restrictions, increasing the scope of transport related sanctions and providing for specific restrictions in relation to intellectual property rights. Extends and inserts measures to facilitate EU operators’ compliance and recovery actions for damage and exit from Russia. Various exemptions / derogations that provided for wind-down periods that have expired have been deleted. The EU Council’s press release regarding the adoption of the New package can be found here: 14th package of sanctions on Russia's war of aggression against Ukraine: EU lists additional 69 individuals and 47 entities - Consilium (europa.eu) When does it come into effect? New asset freeze designations entered into force immediately upon publication on 24 June 2024, while the remaining measures entered into force at midnight on 25 June 2024. NEW DEROGATION FOR TRANFER OF FUNDS OR PAYMENTS THROUGH ASSET FREEZE TARGETS (NOT APPLYING TO CENTRAL SECURITIES DEPOSITARIES) Two newly introduced derogations now permit the authorization of (1) release of funds frozen due to the involvement of an asset freeze target acting as intermediary bank during the transfer of funds from Russia to EU if the transfer of funds will be carried out via accounts in credit institutions not being asset freeze targets and (2) release payments frozen due to the transfer from Russia to EU initiated through or from an asset freeze target as long as the beneficiary of the transfer is a national or resident of EU, Switzerland or European Economic Area. FIGHTING CIRCUMVENTION THROUGH INCREASED LIABILITY AND COMPLIANCE REQUIREMENTS (a) APPLICATION OF THE NO LIABILITY CLAUSE UNDER REGULATIONS 269 AND 833 SUBJECT TO DUE DILIGENCE REQUIREMENTS Individuals or entities required to comply with EU sanctions (“EU operators”) should not be held liable (under the no liability clause) if they were not aware or had no reasonable grounds to suspect that their actions would infringe EU sanctions, provided that they have not failed to carry out appropriate due diligence checks and inspections. (b) INTRODUCTION OF BEST-EFFORTS REQUIREMENTS TO ENSURE THAT NON-EU SUBSIDIARIES DO NOT UNDERMINE SANCTIONS SET FORTH IN REGULATION 833 EU operators must undertake their “best efforts” to ensure that non-EU entities they own[1] or control [2] (the “non-EU subsidiaries”) do not participate in activities that undermine the sanctions set forth in Regulation 833. It was further clarified that circumvention includes participating in activities the object or effect of which is to circumvent EU sanctions without deliberately seeking that object or effect but being aware that the participation can result to that object or effect and accepting that possibility. Points to note: If EU operators are able to and effectively assert a decisive influence over the conduct of their non-EU subsidiaries, they may incur responsibility for actions of that legal person, entity or body that undermine the restrictive measures and should use their influence to prevent those actions from occurring. Activities that would undermine the sanctions set forth in Regulation 833/2014 are those resulting in an effect that this Regulation seeks to prevent, such as where “a recipient in Russia obtains goods, technology, financing or services of a type that is subject to prohibitions under Regulation (EU) No 833/2014”. Best efforts comprise all actions that are suitable and necessary to prevent undermining Regulation 833/2014, including “the implementation of appropriate policies, controls and procedures to mitigate and manage risk effectively, considering factors such as the third country of establishment, the business sector and the type of activity of the [non-EU subsidiary]”. However, EU operators are only expected to take actions that are feasible in view of the operator’s nature, size and relevant factual circumstances, such as the degree of effective control or the inability to exercise control due to reasons not caused by the EU operator itself. III. FRAMEWORK TO SANCTION THE SYSTEM FOR TRANSFER OF FINANCIAL MESSAGES OF THE CENTRAL BANK OF RUSSIA AND ITS USERS OUTSIDE OF RUSSIA As of 25 June 2024, EU entities operating outside Russia will be prohibited from connecting directly to the System for Transfer of Financial Messages of the Central Bank of Russia (“SPFS”), as well as any equivalent services set up by the Central Bank of Russia. In addition, through the introduction of Annex XLIV in Regulation 833, the Council will list third country users of the SPFS outside Russia with any direct or indirect transaction with individuals or entities listed in this annex to be prohibited, except where explicitly exempted, for instance for  certain transactions, execution of contracts concluded before 25 June 2024, until 24 March 2024, reception of payments pursuant to contracts concluded before 24 March 2024. FRAMEWORK TO SANCTION CREDIT AND FINANCIAL INSTITUTIONS AND CRYPTO ASSETS SERVICES PROVIDERS FACILITATING TRANSACTIONS THAT SUPPORT RUSSIA’S DEFENSE INDUSTRIAL BASE The EU Council introduces Annex XLV to Regulation 833, where non-EU credit or financial institutions or crypto assets services providers involved in transaction that facilitate the export, sale, supply, transfer or transport to Russia of among others dual-use goods and technology products will be listed and any direct or indirect transactions with the listed persons or entities are prohibited, except where explicitly exempted. EXTENDING EXEMPTIONS TO PROVIDE SERVICES & SOFTWARE TO EU AND PARTNER COUNTRIES SUBSIDIARIES IN RUSSIA The exception from the prohibition of providing of certain services to the Russian government and entities established in Russia of Article 5n of Regulation 833 expiring for Russian subsidiaries of EU and partner countries entities on 20 June 2024, has been renewed until 30 September 2024. FACILITATING DIVESTMENTS FROM RUSSIA Through the new introduced derogation from the “no claims clause” of Regulation 833, national competent authorities can authorize until 31 December 2024 the fulfilment of claims pursuant to contracts or transactions affected and are strictly necessary to divest from Russia or the winding down of business activities in Russia. Furthermore, the latter can authorize transactions necessary for divesting from EU joint venture involving Russian entities and operation of gas pipeline between Russia and third countries (instead of the set timeframe of 30 June 2024) on 31 December 2024. VII. EXTENDED LIST OF PARTNER COUNTRIES The list of partner countries of Annex VIII of Regulation has been extended to include Liechtenstein and Iceland, in addition to the United States of America, Japan, the United Kingdom, South Korea, Australia, Canada, New Zealand, Norway and Switzerland, which benefit by the derogations and exceptions of Regulation 833. VIII. EU NATIONALS AND ENTITIES ARE ENTITLED TO RECOVER DAMAGES LINKED TO ASSETS CONFISCATION IN RUSSIA EU nationals and entities are entitled to pursue the recovery of damages resulting from a decision under Russian laws to place assets owned by investors associated with “unfriendly” States under temporary administration, against individuals or entities benefited from such decision, provided that such decision is illegal under international customary law or under a bilateral investment treaty entered between a Member State and Russia, and the person concerned does not have effective access to the remedies under the relevant jurisdiction. Member States shall not be liable for such judicial decisions or their enforcement and shall not comply with judgments, arbitral awards or other judicial decisions that hold them liable. 15th SANCTIONS PACKAGE On  December 16 2024, the European Union ("EU") adopted its 15th sanctions package )  (the “New package”) against Russia through COUNCIL REGULATION (EU) 2024/3189 amending EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine (“Regulation 269”) and through COUNCIL REGULATION (EU) 2024/3192 amending EU Regulation 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine (“Regulation 833”) respectively (hereinafter collectively referred to as the “EU Sanctions”). The New package aims to strengthen the measures for the prevention of EU sanctions circumvention and imposes a significant number of additional asset freeze measures and other individual list-based sanctions. The New package introduces new measures and amendments to the existing measures as follows: Extension of certain derogations imperative for divestments from Russia until the 31/12/2025 (the previous deadline was 31/12/2024) Introduction of a derogation and a “no liability” clause for Central Securities Depositaries (“CSDs”) Anti-circumvention designations of vessels subject to a port access ban and ban of provision of certain services New mechanism for tackling anti-suit injunctions in Russia New List-Based sanctions with additions of entities Travel ban and/or asset freeze to individuals and entities The EU Council’s press release regarding the adoption of the New package can be found here: Russia’s war of aggression against Ukraine: EU adopts 15th package of restrictive measures - Consilium When does it come into effect? New asset freeze designations entered into force immediately upon publication on December 16 2024, while the remaining measures entered into force on December 17 2024. EXTENDED DEROGATIONS-DIVESTMENT FROM RUSSIA The introduced derogations in relation to winding down operations in Russia, permit National Competent Authorities (“NCAs”) to authorize transactions necessary for divestment from Russia until the 31/12/2025 after the extension of the previous deadline which was 31/12/2024.  These derogations include the derogations found in Article 5aa (3a) in relation to transaction ban and Article 12b in relation to certain trade control measures and professional services restriction of Regulation 833. The aim of this extension is to facilitate the orderly exit of the EU Businesses from the Russian market. NEW DEROGATION FOR CSDs AND “NO LIABILITY CLAUSE” FOR CSDs FINANCIAL SECTOR MEASURES In order to address the increasing litigation and retaliatory measures in Russia that result in the seizing of assets of EU Central Securities Depositories (CSDs), the New Package introduces two important amendments: A loss recovery derogation: This will allow for the release of cash balances held by EU CSDs. This derogation will enable CSDs to request competent authorities of the Member States to unfreeze cash balances which are held in Russia and use them to meet their legal obligations with their clients. A no liability clause for EU CSDs: This clarifies that EU CSDs are not liable to pay interest or any other form of compensation to the Central Bank of Russia, beyond interest contractually due. More specifically, the new paragraph 5j of Article 6b of Regulation 269, authorizes NCAs to allow the CSDs to release the frozen cash balances attributable to the NSD or to another sanctioned entity as long as: The CSD maintains an account or accounts with the NSD The NSD (or other sanctioned entity) maintains an account or accounts with the relevant CSD The NSD has debited an amount from the CSDs accounts pursuant to a law, decree, regulation, judicial or administrative decision or any other measure, directly or indirectly attributable to the Russian Federation without the prior consent of the CSD The released cash balance from the CSDs will not exceed the amount debited by NSD, will be used for meeting CSDs legal obligations with their clients and will not be made available in breach of Article 2(2) which indicates the people and entities listed in Annex I of the Regulation 269. Furthermore, the “no liability clause” for EU CSDs has been included in paragraph 12a of Article 5a of Regulation 833 indicating that CSDs are exempted from liability in relation to their actions taken in good faith regarding the handling of immobilized assets and reserves of Central Bank of Russia, unless it is proved that the action was a result of negligence.   III. NEW LIST-BASED SANCTIONS   The New Package introduced the following additional sanctions listings:   32 new entities from countries including Hong Kong, India, China, United Arab Emirates, Serbia and Iran have been listed in Annex IV of Regulation 833/2014 and are now subject to enhanced export related restrictions on dual-use and advanced technology items for supporting Russia’s military and industrial complex in its war of aggression against Ukraine through the procurement of sensitive items such as Unmanned Aerial Vehicle (UAVs) i.e. Drones and missiles. 52 vessels from third countries have been targeted by EU and added to Annex XLII or Regulation 833 and are now subjected to prohibitions on a broad range services 54 individuals and 30 legal entities have been added to EU’s sanctioned list as follows: In relation to the individuals, the EU is sanctioning the military unit alleged to be responsible or the striking of the Okhmadyt children hospital in Kyiv, senior managers in energy sector companies, individuals alleged to be responsible for children deportation, propaganda and circumvention, as well the Minister of Defence and the Deputy Chief of the General Staff of the Democratic People's Republic of Korea. In regard to the entities, the EU targeted primarily Russian defence companies and shipping companies transporting crude oil and oil products by the sea,  a chemical plant and  a civil Russian airline For the first time, EU imposes fully-fledged sanctions (travel ban, asset freeze, prohibition to make economic resources available) on various Chinese actors supplying drone components and microelectronic components in support of Russia’s war of aggression against Ukraine. ANTI-SUIT INJUNCTIONS IN RUSSIA/PROHIBITIONS OF RECOGNIZING, GIVING EFFECT OR ENFORCING IN THE EU The new Article 11c of Regulation 833 provides the following: No injunction, order, relief, judgment or other court decision pursuant to or derived from Article 248 of the Arbitration Procedure Code of the Russian Federation or equivalent Russian legislation shall be recognised, given effect or enforced in a Member State. No request for assistance during an investigation or other criminal proceedings, and no punishment or other sanction pursuant to the Russian Criminal Code based on an alleged violation of an injunction, order, relief, judgment or other court decision pursuant or derived from Article 248 of the Arbitration Procedure Code of the Russian Federation or equivalent Russian legislation shall be recognised, given effect or enforced in a Member State. The rulings issued by the Russian Courts based on Article 248 of the Arbitration Procedure Code were used to prevent the opposing party from commencing or continuing legal proceedings in foreign courts outside Russia (anti suit injunctions) and have often resulted in disproportionately high financial penalties for European companies. Finally, EU has designated for the first time 16 individuals and three entities responsible for Russia’s destabilising actions abroad as these are connected to among others collaboration with the Russian Government and hybrid activities of various kinds, including cyber-attacks, use of coordinated information manipulation and interference. The EU Council’s relevant press release can be found here: Russian hybrid threats: EU agrees first listings in response to destabilising activities against the EU, its member states and partners - Consilium Next Steps MPC Legal monitors developments within the EU closely and expects that additional rounds of sanctions may be imposed as events unfold. _______ Authors Marilou Pavlou Christodoulides | Partner Stella Kagia | Senior Associate [1] Definitions of “ownership” and “control”: Recitals of Regulation 833 define the concept of ownership and control, in line with previous guidance, as follows: Ownership means “being in possession of 50 % or more of the proprietary rights of the legal person, 7 8 2 entity or body, or having a majority interest therein”; Controls is to be determined based on indicia, including “the power to appoint or remove a majority of the members of the administrative, management or supervisory body; the right to use all or part of the assets of the legal person, entity or body; managing the business of the legal person, entity or body on a unified basis, while publishing consolidated accounts; or the right to exercise a dominant influence over the legal person, entity or body” [2] Ibid

New reporting obligations, following the addition of Article 5r of Council Regulation (EU) No. 833/2014 through the 12th EU package of economic and individual sanctions against Russia (the “EU Sanctions”) due to its military aggression against Ukraine, were issued on 18th of December 2023. Note: The position is constantly evolving. Additional sanctions may be introduced in the coming days and these will be the subject of future articles. This information is: of a general nature only and is not intended to address the specific circumstances of any particular individual or entity; not necessarily comprehensive, complete, or up to date; not professional or legal advice (if you need specific advice, you may consult us). On December 18, 2023, the European Union ("EU") adopted its 12th sanctions package against Russia amending EU Regulation 269/2014 concerning restrictive measures in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine and Regulation (EU) 833/2014 concerning restrictive measures in view of Russia's actions destabilising the situation in Ukraine Reporting Obligations according to the Article 5r of (EU) Regulation 833 “Article 5r provides that: Legal persons, entities and bodies established in the Union whose proprietary rights are directly or indirectly owned for more than 40 % by: (a) a legal person, entity or body established in Russia; (b) a Russian national; or (c) a natural person residing in Russia, shall, as of 1 May 2024, report to the competent authority of the Member State where they are established, within two weeks of the end of each quarter, any transfer of funds exceeding 100 000 EUR out of the Union that they made during that quarter, directly or indirectly, in one or several operations. Notwithstanding the applicable rules concerning reporting, confidentiality and professional secrecy, credit and financial institutions shall, as of 1 July 2024, report to the competent authority of the Member State where they are located, within two weeks of the end of each semester, (i.e. twice annually) information on all transfers of funds out of the Union of a cumulative amount, over that semester, exceeding 100 000 EUR that they initiated, directly or indirectly, for the legal persons, entities and bodies referred to in paragraph 1. Member States shall assess the information received in accordance with paragraphs 1 and 2 to identify transactions, entities and business sectors that indicate a serious risk of breaches or circumvention of, or use of funds for purposes incompatible with, this Regulation or Council Regulations (EU) No 269/2014, (EU) No 692/2014 or (EU) 2022/263 , or Council Decisions 2014/145/CFSP, 2014/386/CFSP , 2014/512/CFSP or (CFSP) 2022/266 , and shall regularly inform each other and the Commission of their findings. Based on the information received from the Member States under paragraph 3, the Commission shall review the functioning of the measures provided for in this Article no later than 20 December 2024. Reporting Obligation as per paragraph 1 of Article 5r Paragraph 1 of Article 5r of the Regulation 833, sets out the reporting obligations of all legal persons, entities and bodies established in the European Union, whose proprietary rights are directly or indirectly owned for more than 40% by a legal person, entity or body established in Russia or a Russian national or a natural person residing in Russia which are obliged to report on any transfer of funds out of the EU exceeding EUR 100 000, in one or several operations as of 1 May 2024, covering the period between 1 January and 31 March 2024. By “indirect ownership” it is clarified that we refer to the ownership of an entity through a chain of intermediaries. Following the announcement of the Cyprus Ministry of Finance issued on 30th of April 2024, the aforesaid deadline is extended to the 10th of May 2024, due to the fact that 1st of May is a public holiday in Cyprus. As mentioned in the FAQs of EU Commission issued on 12th of April 2024 indirect ownership should not be confused with control, since the latter is established as a result of a factual assessment, taking into consideration all relevant circumstances. In this respect, EU legal entities, which meet one or more of the three criteria (or should be read as a cumulative or) i.e. 40% direct / indirect ownership by: (a) a legal person, entity or body established in Russia; (b) a Russian national; or (c) a natural person residing in Russia fall within the scope of application of Article 5r. As it was further clarified, the criterion of control is not relevant for the purposes of Article 5r. Reporting Obligation as per paragraph 2 of Article 5r Paragraph 2 of Article 5r of the Regulation 833 sets out the reporting obligations for credit and financial institutions. As of 1 July 2024, EU credit and financial institutions will have to report every semester on transfers of funds out of the EU that they initiated for the aforementioned EU entities where their cumulative amount exceeds EUR 100 000 during that semester within two weeks from the end of each semester. Therefore, by 15 July 2024, the credit and financial institutions must report the said transfers for the period between 1 January 2024 and 30 June 2024. The reporting obligation is a continuous obligation that binds both EU entities and EU credit/financial institutions. In addition, we need to mention that the reporting obligations of legal entities/bodies and credit and financial institutions have been also clarified through the relevant announcements of the Cypriot Ministry of Finance dated 16/04/2024 and 30/04/2024, CySEC’s Circular C635 issued on 19/04/2024 and the announcements of Cyprus Bar Association dated 17/04/2024 and 24/04/2024. A reporting template in excel format was also included in EU’s Article issued on 12/04/2024 regarding Frequently Asked Questions (FAQ’s) for Article 5r of Regulation 833, clarifying the expected content of reporting. This template must be used by the obliged entities and EU credit and financial institutions for complying to their reporting obligations and include among others detailed information of the type, date and amount of transaction, sender’s and beneficiary’s bank details, country, contact person’s details, transaction description and number. This reporting template has been further updated to include the reporting on financial instruments in tab 2.1 and can be found here: Potential Domestic Liability for breach of EU sanctions - Breach of the Law which provides for the Implementation of the Provisions of the Resolutions or Decisions of the United Nations Security Council (Sanctions) (the “UNSC”) and the Decisions and Regulations of the Council of the European Union (Restrictive Measures) of 2016 (the “Law on Sanctions and Restrictive Measures”) According to Article 3 of the Law on Sanctions and Restrictive Measures, each ministry or its department, each independent authority, as well as the supervisory authorities defined in Article 59 of the Prevention and Suppression of Money Laundering Activities Laws of 2007 to 2016 (the “Supervising Authorities”) have the authority for securing the implementation of the provisions of the resolutions and decisions of the UNSC on sanctions and/or the decisions and regulations of the Council of the EU on restrictive measures, in those sectors for which the said ministry or its department or independent office or the Supervising Authorities have competence according to the Constitution of the Republic of Cyprus, the laws, the regulatory administrative acts, and the decisions of the executive authority. In the event that any person whether natural or legal contravenes or is in way found to have breached United Nations Security Council Resolutions or Decisions (Sanctions) and of the European Union Council Decisions and Regulations (Restrictive Measures), is guilty of an offence, and without prejudice to any other legislative provision providing a greater penalty upon conviction is subject to: in the case of an individual, imprisonment not exceeding two years, or a fine not exceeding €100,000 (One Hundred Thousand Euro) or both these penalties; and in the case of a legal entity, a fine not exceeding €300,000 (Three Hundred Thousand Euro). In case that any Supervising Authorities are alerted to the fact that any legal or natural person may have or has contravened the United Nations Security Council Resolutions or Decisions (Sanctions) and of the European Union Council Decisions and Regulations (Restrictive Measures) then a report of the potential violation is submitted to the Police which in turn carries out relevant investigations. It is noted that criminal prosecution of any person whether natural or legal in violation of any of the provisions of the Resolutions or Decisions of the Security Council (Sanctions) and/or the Decisions and Regulations of the Council of the European Union (Restrictive Measures) is carried out only with the approval of the Attorney General of the Republic of Cyprus. We further note that infringements of EU Sanctions in Cyprus also constitute a criminal offence and can be dealt with by invoking articles 136 (Disobedience to statutory duty) and 137 (Disobedience of lawful orders) of the Criminal Code (Cap. 154). Next Steps MPC Legal monitors closely developments within the EU and any further updates and guidelines regarding the reporting obligation under Article 5r of Regulation 833 will be provided through an additional article. Legal Persons and specifically Financial institutions should seek immediate advise as to their reporting obligations to ensure compliance with the EU Sanctions.