Easing retaliatory sanctions: legal implications

Amendments to ease the restrictions have been made to the list of foods banned from being imported into the Russian Federation. This may be treated as a circumstance that stops a force-majeure regime from applying and that restores the obligation of counterparties to perform theirt contractual obligations.

The Russian Government's Resolution No. 830[1] dated 20 August 2014 has amended the Russian Government's Resolution No. 778[2] dated 7 August 2014 "On measures to implement Presidential Executive Order No. 560[3] 'On Adopting Special Economic Measures to Safeguard the Security of the Russian Federation'". Resolution No. 778 banned the import into the Russian Federation of some foods produced in the USA, the EU and in Canada, Australia and Norway.

The procedure for importing certain goods and groups of goods has been amended.

The ban on the import of the following items has been lifted:

• Juvenile Atlantic salmon (Salmo salar) and trout (Salmo trutta) (from code 0301);
• Lactose-free milk and lactose-free diary products (from codes 0401, 0402, 0403, 0404, 0405, and 0406);
• Seed potatoes (0701 10 000 0), seed onions (0703 10 110 0), seed hybrid sweet corn (0712 90 110 0), and seed peas (0713 10 100 0);
• Biologically active additives, vitamin and mineral additives, flavour additives, animal and plant protein concentrates and mixes of them, dietary fibre, and additives (including complex additives) (from codes 1901 90 110 0, 1901 90 910 0, 2106 90 920 0, 2106 90 980 4, 2106 90 980 5, and 2106 90 980 9).

The following items have been included in the list of goods in relation to which the Commodity Classification Code for Foreign Trade of the Customs Union should be used along with the name of the relevant goods:

• Live fish (code 0301);
• Milk and diary products (codes 0401, 0402, 0403, 0404, 0405, and 0406);
• Food and food preparations (from codes 1901 90 110 0, 1901 90 910 0, 2106 90 920 0, 2106 90 980 4, 2106 90 980 5, and 2106 90 980 9)

Pepeliaev Group's comments: Because the ban has been lifted on goods being exported/imported into/from the country of one of the counterparties, it is now possible to resume the performance of the contract. Thus, this is a circumstance  that stops the force-majeure regime from applying and restores the counterparties' duties to perform their contractual obligations.

Accordingly, the fact that Russia has eased its retaliatory sanctions may be regarded as a factor that stops the force-majeure regime from being in effect in the relevant cases. At the same time, the fact that the sanctions were in force may be treated as a circumstance that releases a party from its liability for a delay in performing its contractual obligations.

Conclusions and recommendations

We recommend that the interested party immediately inform its counterparties that the force-majeure circumstances have ceased. Please be advised that this restores the right to require compliance with contracts that are in force where compliance was previously impossible owing to force-majeure circumstances; in addition, it restores the obligation to perform under such contracts.

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