American Club Circular No. 19/14 1 JULY 16, 2014 CIRCULAR NO. 19/14 TO MEMBERS OF THE ASSOCIATION Dear Member: EUROPEAN UNION SANCTIONS IN RESPECT OF CRIMEA AND SEVASTOPOL: COUNCIL REGULATION (EU) NO 692/2014 OF JUNE 23, 2014 CONCERNING RESTRICTIONS ON THE IMPORT INTO THE UNION OF GOODS ORIGINATING IN CRIMEA OR SEVASTOPOL In response to the annexation of Crimea and Sevastopol by Russia, the European Union has published Regulation 692/2014 of June 23, 2014 (the Regulation), introducing trade sanctions in respect of goods originating in Crimea or Sevastopol and on the provision, directly or indirectly, of financing or financial assistance, as well as insurance and reinsurance, related to the import of such goods. Prohibitions 1. Under Article 2 of Regulation 692/2014 it is now prohibited:  to import into the European Union goods originating in Crimea or Sevastopol.  to provide, directly or indirectly, financing or financial assistance as well as insurance and reinsurance related to the import of goods originating in Crimea or Sevastopol. 2. For the purpose of the Regulation "goods originating in Crimea or Sevastopol" are defined as goods which are wholly obtained in Crimea or in Sevastopol or which have undergone their last substantial transformation there in accordance with Articles 23 and 24 of Regulation EEC 2913/92 dated October 12, 1992. Article 23 of Regulation 2913/92 provides that "goods originating in a country" shall be those wholly obtained or produced in that country and the expression "goods wholly obtained in a country" means: (a) mineral products extracted within that country; (b) vegetable products harvested therein; (c) live animals born and raised therein; (d) products derived from live animals raised therein; (e) products of hunting or fishing carried on therein; (f) products of sea-fishing and other products taken from the sea outside a country's territorial sea by vessels registered or recorded in the country concerned and flying the flag of that country; (g) goods obtained or produced on board factory ships from - the products referred to in subparagraph (f) originating in that country, provided that such factory ships are registered or recorded in that country and fly its flag; (h) products taken from the seabed or subsoil beneath the seabed outside the territorial sea provided that that country has exclusive rights to exploit that seabed or subsoil; (i) waste and scrap products derived from manufacturing operations and used articles, if they were collected therein and are fit only for the recovery of raw materials; (j) goods which are produced therein exclusively from goods referred to in subparagraphs (a) to (i) or from their derivatives, at any stage of production. American Club Circular No. 19/14 2 3. Article 24 of Regulation EEC 2913/92 provides that goods whose production involved more than one country shall be deemed to originate in the country where they underwent their last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture. 4. The new Regulation would appear to comprehensively limit trade activities from Crimea and Sevastopol to the European Union. Members who are subject to its application (see paragraphs 7, 8 and 9 below) are advised to seek advice before fixing contracts for voyages from Crimea and Sevastopol. In light of the prohibition on the provisi