1. The eighth EU sanctions package
By decision of October 6, 2022, the Council of the European Union supplemented Council Regulation (EU) No. 833/2014 of July 31, 2014, concerning restrictive measures in view of Russia's actions destabilizing the situation in Ukraine ("Regulation 833/2014"). The eighth package of sanctions was published in the Official Journal of the European Union on the same day.
1.1 Extension of the ban on the provision of certain services
The new sanctions measures extended the existing ban on the provision of certain services to the Russian Federation. The provision of services in the fields of architecture and engineering as well as IT consulting and legal advice to the government of Russia or legal persons, entities or bodies established in Russia is now prohibited.
Specifically, the following new paragraph 2 was added to Article 5n of Regulation 833/2014:
(2) It is prohibited to provide, directly or indirectly, architectural and engineering services, legal services and IT consulting services for
a) the government of Russia or
b) legal persons, entities or bodies established in Russia.
The new bans came into effect in the European Union on October 7, 2022.
1.2 Implementation in Switzerland?
Although Switzerland decides independently to what extent it will adopt the sanctions of the European Union, it can be assumed that it is only a matter of time before the Swiss Federal Council fully takes over the EU’s 8th Sanctions Package. Finally, on October 12, 2022, the Federal Council already amended Annex 8 of the Ordinance on Measures in Connection with the Situation in Ukraine of March 4, 2022 (SR 946.231.176.72) so that Switzerland's sanctions list fully corresponds to that of the European Union. Furthermore, the Federal Department of Economic Affairs, Education and Research has already issued notifications regarding other measures that are work in progress and has commenced efforts leading to the adoption of these new measures by the Federal Council.
2. Prohibition of architectural, engineering, legal and IT consulting services for legal entities, organizations or institutions established in Russia
2.1 Architecture and engineering services
Architectural and engineering services also include integrated engineering services, services of urban planners and landscape architects, and scientific and technical consulting services related to engineering services. The prohibition does not cover technical assistance related to goods exported to Russia if their sale, provision, transfer or export is not prohibited at the time when such technical assistance is provided.
2.2 IT Consulting Services
IT consulting services include consulting services related to the installation of computer hardware, support services for customers in the installation of computer hardware and computer networks, and software implementation services including consulting services for the development and implementation of software.
2.3 Legal services
The ban on providing legal services to legal persons, entities or bodies established in Russia primarily concerns lawyers who have their registered office in a Member State of the European Union. However, lawyers who are active in Russia and are nationals of a Member State of the European Union are also likely to be covered by the ban.
The prohibition extends to the provision of legal advice in non-contentious matters, including commercial transactions involving the application or interpretation of law, participating in commercial transactions, negotiations or other dealings with third parties with or on behalf of such clients, and drafting, executing and reviewing legal documents.
The prohibition does not cover representation, advice, drafting of documents or review of documents in the context of legal representation services, in particular in matters or proceedings before administrative authorities, courts or in arbitration or mediation proceedings. This is to preserve the right of defense. Furthermore, the ban on legal services does not extend to Russian private individuals (but see also 2.4).
2.4 Direct and indirect legal advice
Both the direct and indirect provision of architectural, engineering, IT consulting and legal consulting services is prohibited. Accordingly, the provision of advice to a client is prohibited if the client then passes the knowledge on to a legal person, organization or entity established in Russia.
2.5 Exceptions to the prohibition on the provision of certain services
2.5.1 Excluded beneficiaries
The prohibition on the provision of certain services does not apply to the provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia, which are owned or controlled solely or jointly by a legal person, entity or body established or incorporated under the laws of a Member State of the European Union, a country belonging to the European Economic Area, Switzerland, the United States, Japan, the United Kingdom or South Korea.
2.5.2 Excluded services
Services that are absolutely necessary to terminate contracts entered into before the effective date of the prohibition of the respective service or contracts required for their performance by July 5, 2022, respectively January 8, 2023, are permitted.
Also exempt from the prohibition on the provision of certain services are services strictly necessary for the exercise of the right of defense in legal proceedings and the right to an effective remedy. Services that are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State of the European Union or for the recognition or enforcement of a court judgment or arbitral award from a Member State of the European Union are also permitted.
Finally, the prohibition on architectural, engineering, legal, and IT consulting services does not apply to the provision of services necessary for public health emergencies, the urgent prevention or mitigation of an event that is likely to have a serious and substantial impact on human health and safety or the environment, or the management of natural disasters.
2.5.3 Exemption permit
The competent authorities may authorize the provision of services prohibited under Art. 5n of Regulation 833/2014 under such conditions as they deem appropriate, and if they are necessary, for:
a) humanitarian purposes;
b) civil society activities directly promoting democracy, human rights, or the rule of law in Russia;
c) the activities of diplomatic and consular missions of the European Union and its Member States or partner countries in Russia, including delegations, embassies and missions, or international organizations in Russia enjoying immunity under international law;
d) securing critical energy supplies in the European Union and the purchase of titanium, aluminum, copper, nickel, palladium and iron ore or their importation or transportation into the European Union;
e) ensuring the continuous operation of infrastructures, hardware and software that are essential for the health and safety of people or the safety of the environment;
f) the establishment and operation of civil nuclear capabilities, their maintenance, their supply and reprocessing of fuel elements and their safety, and the continuation of the design, construction and acceptance tests for the commissioning of civil nuclear facilities, the supply of source materials for the production of medical radioisotopes and similar medical applications or critical technologies for radiological environmental monitoring, and for civil nuclear cooperation, in particular in the field of research and development, or
g) the provision by European Union telecommunications operators of electronic communications services necessary for the operation, maintenance and security, including cybersecurity, of electronic communications services in Russia, Ukraine, the European Union, between Russia and the European Union, and between Ukraine and the European Union, and for data center services in the European Union
3. Outlook
Architectural and engineering services as well as legal and IT consulting for legal persons, entities and bodies established in Russia have been generally prohibited in the European Union and by nationals of a Member State of the European Union since October 7, 2022. However, the ban contains numerous exceptions. For example, services that are strictly necessary for the exercise of the right of defense in judicial proceedings and the right to an effective remedy or that are strictly necessary to ensure access to judicial, administrative or arbitral proceedings continue to be permitted. These exceptions should not be interpreted too narrowly for reasons of the rule of law and constitutional law. In addition, legal advice shall continue to be permitted if the client is owned or controlled by a legal person, entity or body formed or incorporated under the laws of a Member State of the European Union, a country belonging to the European Economic Area, Switzerland, the United Kingdom, Japan, South Korea or the United States.
