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Russia imposes 'tit-for-tat' ban

On 6 August 2014, President Putin signed a decree banning the import into Russia of certain foods from countries which have imposed sanctions on Russia over the conflict in Ukraine. The new ban is set to last for one year and applies to the following products (the relevant commodity codes have been included in brackets):

  • meat of bovine animals, fresh or chilled (0201) 
  • meat of bovine animals, frozen (0202) 
  • pork, fresh, chilled or frozen (0203)
  • meat and edible offal from poultry with commodity code 0105, fresh, chilled or frozen (0207) 
  • meat salted, in brine, dried or smoked (0210) but excluding goods destined for baby food 
  • fish and crustaceans, molluscs and other aquatic invertebrates (0301, 0302, 0303, 0304, 0305, 0306, 0307, 0308) 
  • milk and dairy products (0401, 0402, 0403, 0404, 0405, 0406) 
  • vegetables, edible roots and tubers (0701, 0702 00 000, 0703, 0704, 0705, 0706, 0707 00, 0708, 0709, 0710, 0711, 0712, 0713, 0714) 
  • fruit and nuts (0801, 0802, 0803, 0804, 0805, 0806, 0807, 0808, 0809, 0810, 0811, 0813) 
  • sausages and similar products of meat, meat offal or blood; food preparations based thereon (1601 00) 
  • finished products, including cheese and curd based on vegetable fats (1901 90 110 0, 1901 90 910 0) 
  • milk products based on vegetable fat (2106 90 920 0, 2106 90 980 4, 2106 90 980 5, 2106 90 980 9) 

Implications for UK businesses

Arguably, it is ordinary Russians and not the Western economies who will be hardest hit by the ban, as they may find it harder to buy food produce and see prices increase. Nevertheless, exporters to Russia will be affected and some UK businesses are already reporting that they've lost orders and had to cancel contracts. Those businesses with a presence in Russia may also find it difficult, even impossible, to purchase products through their usual overseas channels and be forced to source locally.

The position could well get worse in the near future as the Russian government has indicated that it is considering a ban on European airlines flying to Asia over Siberia, and that it may introduce additional sanctions on a number of sectors, including the automobile industry, shipbuilding and aircraft production. There's also a risk that additional products will be added to the import ban if Russia decides to retaliate further.

What should you do? 

The evolving sanctions position heightens the need for any businesses with a direct or indirect Russian nexus to monitor their overseas trade relations closely, in case they are caught by the sanctions.

It is vital that exporters routinely screen their current and potential trading parties against restricted parties lists maintained by the U.S. and the EU. This includes a consideration of whether parties are "owned or controlled" by designated parties, which may also mean they are subject to sanctions.

The recent Russian ban on food imports raises new commercial issues for businesses to consider, for example:

  • how will your supply chain be affected; 
  • are any current orders vulnerable; 
  • do you need to put in place contingency measures now in case the situation worsens; 
  • are you exposed contractually if you cannot import/export due to the new sanctions; and 
  • what, if any, relief can you seek under any contractual 'force majeure' provisions? 

The underlying legal framework for the sanctions regime is complex and advice should be sought if you're unclear as to how your business may be affected and what can be done commercially to improve your position.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2014. Specific advice should be sought for specific cases; we cannot be held responsible for any action (or decision not to take action) made in reliance upon the content of this publication.

TLT LLP is a limited liability partnership registered in England & Wales number OC 308658 whose registered office is at One Redcliff Street, Bristol BS1 6TP England. A list of members (all of whom are solicitors or lawyers) can be inspected by visiting the People section of this website. TLT LLP is authorised and regulated by the Solicitors Regulation Authority under number 406297.


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