Doing business in Crimea
In the absence of de-escalatory steps by the Russian Federation and its annexation of Crimea, the EU has imposed restriction measures regarding territory of Crimea and Sevastopol. Number of regulations has been placed; the latest dating 18 December 2014 (Regulation 1351/2014) widened the scope of the earlier restrictions.
For the full information we advise you to look at the following links:
Here is a short overview of restrictions that concern doing business in Crimea.
Import, sale or supply of goods and technology
It is prohibited to import, sell, supply, transfer, export, directly or indirectly key equipment and technology as listed by Council Regulation 825/2014 where goods are for use in or by any person, entity or body in Crimea or Sevastopol. It is also prohibited to provide technical assistance or brokering services, financing or financial assistance in relation to the above. These goods and technologies are suited for use in the following key sectors:
- The prospection, exploration and production of oil, gas and mineral resources
The prohibition is not applied to the goods and technologies that don’t have reasonable grounds to determine that they are to be used in Crimea and Sevastopol.
Investment and trade
The EU has placed following restrictions for:
- Investment in real estate located in Crimea or Sevastopol;
- Investment in entities located in Crimea or Sevastopol, or entering into joint ventures with such entities;
- Providing loans, credit or financing to entities located in Crimea or Sevastopol;
- Providing investment services directly related to any of the above activities;
Investment services include:
- reception and transmission of orders in relation to one or more financial instruments;
- execution of orders on behalf of clients;
- dealing on own account;
- portfolio management;
- investment advice;
- underwriting of financial instruments and/or pricing of financial instruments on a firm commitment basis;
- placing financial instruments without a firm commitment basis;
- any service in relation to trading on a regulated market or trading on a multilateral trading facility.
It is prohibited to provide services related to tourism activities in Crimea or Sevastopol, including through cruise ships entering into ports in the Crimean peninsula. There is an exemption that allows obligations under contracts concluded prior to December 20th, 2014 to be performed and for ships to call at the listed ports for reasons of maritime safety.
Sanctioned persons and entities
The EU has also launched sanctions against certain individuals and companies that are viewed as having direct involvement in destabilizing the situation in Crimea. Any business involving such individuals and entities is likely to be in breach of the sanctions. Among such enterprises that are subject to sanctions are the Crimean ports of Sevastopol, Kerch. The full list could be found here.
Legal position regarding Crimea
If companies are found to be in breach of EU sanctions, penalties are imposed at a Member State level. Breaches of the Sanctions constitute an economic offence under the Dutch Law on Economic Offences (Wet de economische deliction). For more information please see.
On 27 September 2014 the Ukrainian law “On Creation of Free Economic Zone “Crimea” and Peculiarities of Conducting Activity in Temporarily Occupied Territory of Ukraine” came into force. It establishes a free economic zone “Crimea” on the temporary occupied territories of the Crimea and Sevastopol for the next 10 years. The main goal of FEZ is to start a legal regime for business activities of legal entities and individuals on the territory that determines a special framework for regulatory, tax, customs issues. For more information regarding FEZ please see.
The resolution of the Government of Ukraine “On Limitation of the Supply of Certain Goods (Works, Services) from the Temporarily Occupied Territory to Another Territory of Ukraine and/or from Another Territory of Ukraine to the Temporarily Occupied Territory” (No. 1035 dated December 16, 2015) entered into force on Sunday, January 17, 2016. The resolution provides for the ban to be in effect for the temporary occupation period with regard to the supply of goods [works, services] in any customs regimes with the exception of personal belongings of citizens transported in their hand luggage and/or other accompanying luggage and socially significant foods with a total value equivalent to less than UAH 10,000 and a total weight of less than 50 kilograms per person. Exceptions for food is applicable only when a person carrying goods to the temporarily occupied territory enters it no more than once a day. This list includes highest grade wheat flour, bread made of highest grade and first grade wheat flour, bread made from mixed rye and wheat flour, pasta, buckwheat, rice, first category beef, pork, lard, poultry, cooked sausage, milk with a 2.5% fat content, sour cream with a 20% fat content, cheese, eggs, sugar, sunflower oil, potatoes and salt. The resolution does not apply to electric power supply and humanitarian aid.
Travelling to Crimea
Foreigners and stateless persons shall travel to the Autonomous Republic of Crimea and the city of Sevastopol in accordance with the laws and international treaties of Ukraine. Those foreigners who enjoy visa-free regime shall stay in the Autonomous Republic of Crimea and city of Sevastopol subject to its entering by crossing the state border only in the operating border checkpoints of Ukraine and getting a due stamp in their passports or immigration cards.
Those foreigners and stateless persons who fail to comply with Ukrainian legislation when entering and stay in the Autonomous Republic of Crimea and city of Sevastopol will be prosecuted under the laws of Ukraine. The international sanctions may be imposed against such persons as those who support the temporary occupation of the territory of Ukraine as well.Disclaimer The information contained in this website is for general information purposes only. While we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind about the completeness, accuracy and reliability of this information. Any action you take upon the information on our website is strictly your own risk.