Alongside its allies, the EU has implemented a vast volume of sanctions on Russia and Belarus following Russia’s invasion of Ukraine in February 2022.  The EU sanctions against both Russia and Belarus are at the core of the EU’s response to Russia’s military aggression and aim to diminish Russian resources and curb Russia’s capacity to continue the war.

On 24 June 2024, the EU introduced its awaited 14th sanctions package on Russia and not long after, on 29 June 2024, the EU further extended the scope of its sanctions on Belarus. The relevant regulations can be found here and here.

Although the Russian and Belarusian sanctions packages do not directly target pharmaceuticals or medical products, the healthcare and life sciences industry is no doubt still impacted. Beyond the significant supply chain disruptions, additional restrictions on the provision of certain services to group companies in Russia and Belarus also means that the business operations of all global businesses in these regions are impacted. The EU has tended not to issue broad exceptions or general licences for medical and pharmaceutical purposes, making it particularly tricky for operators in the healthcare sector to navigate the complex web of restrictions now in place.

Latest sanctions on Russia

Whilst the EU sanctions on Russia are already significant, the latest amendments serve to “tighten the screws” and ensure that the impact of the sanctions are felt as intended.

Beyond standard financial sanctions and export-related restrictions (which are by themselves significant), the EU sanctions on Russia have also prohibited the provision of a plethora of professional and business services to Russian companies which include, amongst other services, accounting, auditing, tax consultancy, business and management consultancy, IT consultancy, legal advisory, and technical testing and analysis services. This includes services provided on an intra-group basis, although a carve out is available for services provided to subsidiaries of EU partner countries up until 30 September 2024. Following this date, the provision of in-scope services, even on an intra-group basis, will be prohibited absent a licence.

Notably as part of the 14th package, the EU has also tightened its anti-circumvention measures to ensure that EU sanctions are not undermined by parties outside the EU. EU operators must from now undertake their “best efforts” to prevent their controlled or owned foreign subsidiaries and counterparties from engaging in activities that undermine the Russia sanctions. Additional due diligence obligations have also been introduced for certain goods, to identify and mitigate risks of re-exportation to Russia. How these new requirements will play out in practice, and be enforced by competent authorities, remains to be seen but the potential implications are significant.

For further details on the 14th package and for wider sanctions updates, see our sanctions and export controls blog post here.

Latest sanctions on Belarus

To date, the EU’s sanctions on Belarus have lagged behind the sanctions on Russia, meaning that gaps have developed and opportunities for circumvention of the Russia restrictions have emerged. The new sanctions on Belarus therefore aim to increase the alignment of the EU Belarus sanctions with the EU Russia sanctions.  

Notably, this includes new export-related restrictions and new restrictions on the provision of services, including accounting, auditing, bookkeeping, tax consultancy, business management and consultancy, technical testing and analysis, and the supply of certain software to the Belarusian state, including its Government, public bodies, corporations and agencies, and to any person acting on behalf or at the direction of the foregoing.

For further details on the Belarus sanctions, see our sanctions and export controls blog post here.

Don’t hesitate to reach out to your Baker McKenzie Trade Compliance and Healthcare and Life Sciences contacts for further support.

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Julia Gillert is Of Counsel at Baker McKenzie's London office, and has shaped her practice to focus exclusively on regulatory matters affecting the Healthcare & Life Sciences industry.

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Elina Angeloudi is an associate at Baker McKenzie's London office and specialises in regulatory advice to pharmaceutical and medical devices companies.

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Johanna Asplund is an associate at the Firm’s London office in the Competition, Trade and Foreign Investment Practice Group.