Impact of EU sanctions on the fresh produce sector

It’s been a week since Russia invaded Ukraine. In response to this invasion, much of the world, including the European Union, imposed far-reaching sanctions on Russia. This leads to uncertainty and questions, as well as within the fruit and vegetable sector. How about importing and exporting fruits and vegetables to Russia? Will I continue to receive payments from Russian parties? How do you deal with logistical challenges? In this article, Jan Verhoeven and Sam Van Santen van Will Doncker discuss EU sanctions and their legal consequences for the fruit and vegetable trade.

No-fly zone
Russian aircraft are prohibited from flying, landing or taking off in the airspace and the territory of the European Union. At the same time, Russia closed its airspace. This has a significant impact on the trade in grain, rye, corn and sunflower oil, since Russia is a major exporter of these products.

Although there is no official ban on the import and export of fresh produce products to and from Russia, in practice this is greatly hindered. Road transport is very difficult, because the situation in Ukraine is very dangerous and there are very few truck drivers. Shipping is also affected. For example, the UK has already decided to ban Russian ships. Major shipping companies have also stopped transporting goods to and from Russia.

The bright spot is that customs prioritize perishable goods during export controls. The association of entrepreneurs evofendex is also working on finding alternatives to be able to transport goods to and from Russia. Under no circumstances shall the import and export of fruit and vegetable products through alternative routes be prohibited.

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payment system
Seven Russian banks have been excluded from the international payment system SWIFT and further business with these banks is not allowed. As a result, it is difficult for Russian parties to transfer funds to parties established in EU member states.

What can you do?
Suspension of your obligations: Depending on the contractual agreements reached, the supplier can suspend the delivery obligation if his (Russian) counterpart does not pay or has good reason to believe that this will not happen. On the contrary, when importing products from Russia, it is advisable to check whether the counterparty (Russian) can actually fulfill its delivery obligations. If not, the importer’s obligation to pay may be suspended under certain circumstances.

Termination of the agreement: there may also be reasons for wanting to cancel a contract with a Russian party. This may be due to a defect (non-performance), but also because people no longer want to be associated with this Russian party. In the first case, the law presents wider options than in the second. If the other party defaults, the contract may be terminated. If this is not the case, an appeal may be filed to terminate the contract due to unforeseen circumstances. This possibility has not yet crystallized in case law, but under certain circumstances it seems justified to take the position that one no longer desires to be associated with a Russian party (and in this context social status and the nature of cooperation play a role, among others).

The situation in Ukraine is changing rapidly. This also brings with it the necessary challenges in the fruit and vegetable sector. Do you have any questions about how to deal with imposed EU sanctions or enforce the contract, Then the fresh produce specialists at Wille Donker Advaten will be happy to advise you

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for more information:
Will Doncker Lawyers
Leeds Show 2
2408 Alvin an den Rhein
PO Box 357
2400 AG Alvin aan den Rhein
Phone: +31 (0) 172 44 24 17
[email protected]

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