Update List of Economically Critical Goods
The European Union (EU) recently implemented an update to the List of Economically Critical Goods. That consists of industrial goods subject to restrictive measures imposed on Russia. These measures aim to limit Russia’s ability to wage war and weaken its industrial base. The list includes goods found to be traded to Russia through certain third countries.
The update to the List of Economically Critical Goods comes in response to Russia’s war on Ukraine. On Feb. 24, 2022, the EU and its international partners adopted large-scale and comprehensive restrictive measures. The goal is to deny Russia access to critical technologies and markets. Especially those related to military systems.
The creation of the list is consistent with the EU’s goal of preventing not only the export of dual-use goods and advanced technologies to Russia. But also to weaken Russia’s industrial base. The country’s industrial complex directly or indirectly supports its military efforts. By monitoring trade statistics and identifying trends, the list is continuously updated to ensure its effectiveness.
Points of interest
Considerations for companies exporting said products:
- Due Diligence: Exporters should exercise due diligence when doing business. They must ensure they comply with EU sanctions. To do so, they must be aware of the goods listed under HS Chapters 28 (Chemicals), 84 (Machinery), 85 (Electronics) and 87 (Vehicles).
- Prohibited Activities: It is essential that companies understand that selling, delivering, transferring or exporting goods listed on the List of Economically Critical Goods to Russia is strictly prohibited. This according to Regulation 833/2014. Compliance with these regulations is crucial to avoid fines and legal consequences.
- Anti-Circumvention Measures: Customs and enforcement agencies of partner countries are determined to prevent the circumvention of EU sanctions. Exporters should be aware of possible anti-circumvention measures. To this end, they must take the necessary precautions to prevent it.
- Responsible Export Practices: Companies should prioritize responsible export practices by thoroughly assessing their operations. Ensure that no unintentional contributions are made to Russia. This includes scrutinizing trade flows and monitoring changes in export patterns.
There has been an increase in exports of these goods to third countries. It is important that exporters take responsibility for preventing the trade of these goods for use in Russia, as specified in the list.
The update to the List of Economically Critical Goods highlights the EU’s commitment to dealing with Russia. And promoting responsible export practices. Companies exporting goods covered by the aforementioned HS codes need to stay abreast of the latest developments. They must comply with regulations to contribute to international peace and security.
This blog post summarizes the update and does not constitute advice. If exporters need help with due diligence or doing business with high-risk countries such as Russia.
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