Following annexation of the Crimea and the non-implementation of the Minsk agreements, sanctions were imposed on Russia in 2014. Such measures were extended after Russia invaded Ukraine on 24th February 2022.  The aim of the economic sanctions is to address the actions of Russia with severe consequences and to effectively reduce Russia's ability to continue its aggression. To achieve such purpose, the sanctions issued target military, technology, power and energy sectors while also imposing sanctions on dual used items and trade of certain goods and services. The individual sanctions, have also been issued which target people and entities responsible for supporting, financing or implementing actions which undermine the territorial integrity, sovereignty and independence of Ukraine or those who benefit from such actions.

As the situation escalates, the European Union continuously follows, updates and extends the list of sanctioned individuals, legal entities, industries, goods and services. Due to the previously introduced sanction packages, IT, consultancy services and software in certain areas have already been banned.

On 18 December 2023, the European Union published its 12th package of sanctions targeting Russia via Regulation (EU) 2023/2878 and Regulation (EU) 2023/2875, amending Regulation (EU) 833/2014 and Regulation (EU) 269/2014, respectively (collectively, “12th EU Russia Sanctions Package“), which extended the bans of IT services and software even further.

Based on the 12th package, it is prohibited to sell, supply, transfer, export, or provide, directly or indirectly, software for the management of enterprises and software for industrial design and manufacture as listed below to the Government of Russia or to legal persons, entities or bodies established in Russia.’

A. Software for the management of enterprises, i.e. systems that digitally represent and steer all processes happening in an enterprise, including:

  • enterprise resource planning (ERP),
  • customer relationship management (CRM),
  • business intelligence (BI),
  • supply chain management (SCM),
  • enterprise data warehouse (EDW),
  • computerized maintenance management system (CMMS),
  • project management software,
  • product lifecycle management (PLM),
  • typical components of the above-mentioned suites, including software for accounting, fleet management, logistics and human resources

B. Design and Manufacturing Software used in the areas of architecture, engineering, construction, manufacturing, media, education and entertainment, including:

  • building information modelling (BIM),
  • computer aided design (CAD),
  • computer-aided manufacturing (CAM)
  • engineer to order (ETO),
  • typical components of above-mentioned suites

It is also prohibited to provide technical assistance, brokering services or other services, furthermore financing or financial assistance related to the goods and services referred to above for their provision, directly or indirectly, to the Government of Russia or legal persons, entities or bodies established in Russia.

The above ban shall not apply to the sale, supply, transfer, export or provision of software that was strictly necessary for the termination by 20 March 2024 of contracts which were not compliant with this ban concluded before 19 December 2023, or of ancillary contracts which were necessary for the execution of such contracts.

Currently, there is also a derogation in place until 20 June 2024 for the sale, supply, transfer, export or provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country.  The list of partner countries for these purposes currently includes US, Japan, UK, South Korea, Australia, Canada, New Zealand, Norway and Switzerland.

The above shall not apply to the sale, supply, transfer, export, or provision of services necessary for public health emergencies, the urgent prevention or mitigation of an event likely to have a serious and significant impact on human health and safety or the environment, or as a response to natural disasters. Furthermore the competent authorities might grant a derogation from the above ban as they deem appropriate, after having determined that those services are necessary for the contribution of Russian nationals to international open-source projects.

The 13th sanctions package entered into force on the 24th February 2024, which included new individual sanction listings to cover the Russian IT sector by adding such entities to the sanction list.

Malta is bound by all UN, EU and national sanctions issued under the National Interest (Enabling Powers) Act. The national competent authority for sanctions implementation is the Sanctions Monitoring Board.

Strict compliance with international sanctions is incumbent on all legal and natural persons and any breach of sanctions would entail the heavy penalties established by Article 6 of the National Interest (Enabling Powers) Act.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
Skip to content