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With the 12th sanctions package, the EU already inserted an Annex XL (= 40) into the current Russia embargo back at the end of 2023. The so-called CHPGs (Common High Priority Goods) listed there include, among other things, integrated circuits, components for mechanical engineering, cameras, semiconductor devices, and other electronic components. Also included on the list, however, are perfectly everyday items, such as ball bearings or power converters. Article 12g has, since last year, already required, in respect of these items, a so-called “no-Russia clause,” that is, a specific undertaking that these goods will not be further supplied to Russia or Belarus. This has, by now, largely become common knowledge.<\/p>\n\n\n\n
Since 26 December 2024, companies must now also observe enhanced compliance measures for the export of these goods to most countries outside the EU, and these have real teeth: Article 12gb requires companies to take, in respect of these items, “appropriate steps, proportionately to their nature and size” of the diversion risk. This means that companies must carry out a risk assessment for each individual customer purchasing such CHPGs, which must be documented and continuously updated. Companies are required to apply suitable “policies, controls and procedures” to minimise any such risks. What exactly this means in detail has not been explained by the legislator. General compliance principles will apply here, requiring companies to consider these questions and to weigh them up in a documented manner. We recommend that companies establish criteria relating to the sensitivity of these goods and the volume of information available on the customer. This will, in individual cases, also need to include checks carried out on the customer. This may be required to a lesser extent for everyday items than for highly sensitive components, but certainly not entirely dispensed with even there. It may be worth considering grouping goods into categories for this purpose.<\/p>\n\n\n\n
This obligation applies not only to EU companies, but also to their subsidiaries in third countries. What is particularly interesting here is that such EU rules, which a company must impose on its subsidiary, could potentially conflict with local rules. We are currently examining this in detail, together with one of our colleagues, with regard to China. What does an agreement that a company must conclude with a subsidiary actually need to look like?<\/p>\n\n\n\n
No one, certainly, has a blueprint of what the authorities will expect in a subsequent foreign trade audit. The need for guidance will be considerable in the mechanical and plant engineering, electrical engineering, semiconductor, and automotive industries. We would be glad to assist you in assessing the appropriateness of individual measures and in ensuring a compliant Internal Compliance Programme. Contract management will also need to be taken into consideration.<\/p>\n\n\n\n
We are currently considering offering a dedicated online workshop on this topic. Please feel free to get in touch with us about it!<\/p>\n\n\n\n