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News about Sanctions from ART DE LEX

The latest Sanctions Newsletter, from ART DE LEX, contains updates about sanctions from the European Union and the United States against Russia and their impact on the Russian and European economies.

Extended Sanctions

European Union

On 13 March 2015, the Council of the EU extended sanctions against 150 individuals and 37 entities in Russia through 15 September 2015.

United States

On 11 March 2015, the US Treasury Department added 14 individuals and two institutions, one of which is the Russian National Commercial Bank, to its sanctions list.

As of 6 March 2015, President Barack Obama extended American sanctions against entities in the Russian Federation, which are the subject of four executive orders he issued in March and December 2014, for one year.

Switzerland

In March 2015, Switzerland extended its existing sanctions and introduced additional measures that reflect those of the EU and the US. Swiss residents now face various restrictions against investing in Crimea and Sevastopol. Swiss sanctions now exist against the Russian tourism sector, and the sanctions list includes 19 new individuals and nine entities.

Economic Impact of the Sanctions

Federal Customs Service

According to the FCS, the sanctions decreased the value of imports to Russia, between 2013 and 2014, by 9.2 percent, that is, a total of USD 29 billion. Russia’s trade turnover with the EU in 2014 declined to 48.2 percent from the 2013 total of 49.6 percent. The drop in the Russian ruble, during the last quarter of 2014, was an important factor in the decline. The most important decreases were in three categories: food products; construction equipment, machinery, technical equipment, vehicles, and farm equipment; and pharmaceuticals. The sanctions spurred production in several sectors of the Russian economy, notably plastics as well as certain food products, producer goods, and vehicles. Nevertheless, decreased production occurred in wire rope, pumps and compressors, bearings, buses, and trucks.

European Losses

The Spanish minister of foreign affairs estimated that the EU lost EUR 21 billion in 2014, with Italy losing EUR 2 billion; Germany, EUR 1.3 billion; and Spain, EUR 1 billion. Norway, which is not in the EU, lost EUR 1 billion.

The losses were from projects that never came to fruition, ranging from the Russian military base in Nizhny Novgorod that Rheinmetall was to construct at a price tag of RUB 100 million to the two French MISTRAL-class helicopter carriers for the Russian military that could cost French companies EUR 5 billion (the Sanctions Newsletter lists five more examples).

More details about the sanctions and their economic impact on the global economy are available in the Sanctions Newsletter from ART DE LEX, which is available at http://artdelex.ru/eng/reviews/sanctions-newsletter-17631.

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