In connection with the war in Ukraine, European Union (Union) sanctions have been imposed on Russia, which prohibits the purchase, import, and transfer of crude oil and petroleum products. The list also includes fuels used in motor vehicles.
In addition, on 05 December 2022, Government of the Republic Regulation number 104 will enter into force in Estonia, which prohibits the purchase, import, and transfer of petroleum products from Russia. The purpose of the ban imposed in the regulation is to limit business activities with Russia involving fuel from Russia, and includes all of the most common customs operations – free circulation, processing, export and re-export, transit, and bunkering. Thus, starting from 05 December 2022, it is forbidden to purchase, import, and transfer from Russia the petroleum products specified in headings 2709 and 2710 of the Combined Nomenclature. It is also forbidden to provide services in relation to sanctioned goods.
The regulation applies to all legal entities on the territory of Estonia and legal entities registered in Estonia and located outside the territory of Estonia. Please note that the ban also applies to goods for which economic operators have already submitted agreements referred to in Article 3m(3b) of Council Regulation 833/2014 to the Ministry of Foreign Affairs or the Customs Board.
The ban does not apply to goods declared for free circulation (including excise warehouses) in Estonia before 5 December, nor does it concern the further handling of such goods. Based on the principle of free movement of goods, there is no prohibition on the handling of fuels released for free circulation in another Member State (including in an excise warehouse), but considering the purpose of the sanction imposed by the Government of the Republic in the case of fuel released for free circulation in another Member State, an Estonian entrepreneur must observe due diligence measures in its economic activities, know its business partners and make reasonable efforts not to knowingly produce fuel of Russian origin.
The exception in Article 3m(3c) of Regulation 833/2014, which allows for the purchase, import, or transfer of crude oil and petroleum products transported by sea when those goods originate in a third country and are only loaded in Russia, sent out from Russia or transited through Russia, provided that those goods originate from outside of Russia, and their owner resides outside of Russia.
Goods that have been delivered to Estonia before 05 December 2022 and have not been released for free circulation by that date (including goods in control corridors) are considered to be goods that may not be used to carry out operations or transactions, including further customs clearance (free circulation, processing, export and re-export, transit, and bunkering).
The use of fuel from Russia in a motor vehicle
Article 3m of Regulation number 833/2014 (9) and § 2 of Regulation number 104 provide for the possibility of purchasing fuel for a legal entity from Russia, if this is necessary in order to meet the basic needs of the buyer in Russia.
In the case of international carriage (including carriage of passengers), this means that in the case of carriage that meets the requirements of international carriage, persons are allowed to purchase fuel in Russia and import it into the European Union in the standard fuel tank of a motor vehicle and its special container, if it is intended for use as fuel in the same motor vehicle. The importation of fuel in a fuel canister and in the fuel tanks of motor vehicles or special containers not connected to the fuel system shall be prohibited.
The siphoning of fuel out of the vehicle and the transfer of fuel, whether for remuneration or free of charge, constitute a breach of the sanction. Siphoning is only allowed for the purpose of repairing the vehicle, if the fuel is subsequently pumped back into the vehicle.
The application of the derogation shall have no effect on the application of other sanctions which may apply to a vehicle, persons, or goods.
Tax exemptions for imported fuel are regulated by § 68 of the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act and § 17 of the Value Added Tax Act.
