Following is part 10 of our series on current European Union sanctions against the Russian Federation. Before continuing, be sure to catch up on our previous posts regarding sanctions against the Russian Federation:

Post 1:  EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – AN OVERVIEW
Post 2:  EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – MARCH 2022
Post 3: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – APRIL & JUNE 2022
Post 4: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – CRIMINALIZATION OF SANCTION VIOLATIONS
Post 5: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – LUXURY GOODS
Post 6: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – TRANSFERABLE SECURITIES
Post 7: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – JULY 2022
Post 8: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – OCTOBER 2022
Post 9: EU SANCTIONS AGAINST THE RUSSIAN FEDERATION – LEGAL SERVICES PROVISION OF OCTOBER 2022

POST 10: DEPOSIT RESTRICTIONS

The European Union’s Article 5b of the Council Regulation (EU) 2022/328 of 25 February 2022 amends Council Regulation (EU) No 833/2014 and addresses the finance and banking sector by placing restrictions on credit institution deposits.

Under the Regulation, credit institutions are prohibited from accepting any deposits exceeding 100,000 EUR from Russian nationals or natural persons residing in Russia, legal persons established in Russia or legal persons, entities or bodies established outside the European Union whose proprietary rights, directly or indirectly, are more than 50% owned by Russian nationals or natural persons residing in Russia. The Regulation defines deposits as any credit balance from funds left in an account or from temporary situations resulting from normal bank transactions or deposits resulting from contractual obligations of credit institutions, including fixed-term deposits and savings deposits with some exceptions.

The Regulation applies to the deposits of all Russian nationals, regardless of place of residence, except for Russian nationals who are citizens of or have temporary or permanent residence permits for any of the EU member states, or member countries of the European Economic Area (which includes Iceland, Liechtenstein, and Norway) or Switzerland.

In summary, EU banks are not allowed to accept any new deposits exceeding 100,000 EUR from the aforementioned parties. Those deposits which exceed the limit but were made before the new measures went into effect, may continue to remain at a credit institution. Current or future deposits, however could not exceed the 100,000 EUR sum-of-all-accounts limit.

Exceptional cases in which the authorities of EU member states may authorize the acceptance of such deposits include:

• deposits to satisfy basic needs, including payments for food, rent or mortgage, medicines and medical treatment, taxes, insurance premiums, and public utility charges;
• deposits exclusively to pay reasonable professional fees or reimburse expenses incurred for the provision of legal services;
• deposits exclusively to pay fees or service charges for the routine holding or maintenance of frozen funds or economic resources;
• deposits to cover extraordinary expenses which have been approved as such by a relevant authority which has requested authorization for the exceptional case at least two weeks in advance from the EU member state and the Commission;
• deposits to finance official duties of a diplomatic mission or consular post or international organization;
• deposits to finance the trade of non-prohibited cross-border goods and services between the European Union and Russia;
• deposits for humanitarian purposes;
• deposits for civic activities that directly promote democracy, human rights or the rule of law in Russia.

All EU banks are now required to monitor all incoming deposits and report any accounts, owned by Russian natural and legal persons, whose balance exceeds 100,000 EUR.

**Our series of articles on EU restrictive measures are provided for information purposes only and do not constitute legal advice. For professional advice tailored to your particular case, please contact us at: .**