German & EU legal advice for Russian companies (Art. 5n)
- RA Dr. Hendrik Müller-Lankow, LL.M. (UCL)
- Jan 25, 2024
- 6 min read
Updated: Sep 3
The EU's eighth package of sanctions against Russia also affected legal advice. In principle, German law firms are now prohibited from providing legal services to Russian clients. However, the ban is not as far-reaching as it seems and there are many exceptions that come into question. This article provides you with information on the framework under which a German or European/EU law firms can provide legal services to Russian companies and individuals.
Updated for the 17th sanctions package (20 May 2025).
At a Glance
Ban vs representation: Under Art. 5n of Reg. 833/2014, legal advisory services for Russian-established clients are generally prohibited, but representation in (or strictly preparing for) judicial, administrative or arbitral proceedings remains permissible.
Key exemptions: Advice strictly necessary for the right of defence, access to judicial/administrative remedies, recognition/enforcement of judgments/awards, and compliance with EU sanctions.
Derogations (Germany): In narrowly defined cases, BAFA may authorise otherwise prohibited services. Expect scope-limited mandates, client screening, and a clear legal justification; authorisations are exceptional.
What we can / can’t do: Can: draft pleadings, respond to authorities, file delisting applications, act in enforcement/appeals. Can’t: general transactional/corporate/tax advice, contract drafting unrelated to proceedings, structuring deals or circumvention.
Article 5n of Regulation (EU) No 833/2014
Regulation (EU) No 833/2014 'concerning restrictive measures in view of Russia's actions destabilizing the situation in Ukraine' (official title) entered into force on August 1, 2014. The Council of the European Union justified the Regulation 'as a response to the illegal annexation of Crimea and Sevastopol' (Recital 1). The Regulation was then amended and extended several times, especially after Russia's invasion of Ukraine on February 24, 2022.
The prohibition of legal advisory services was introduced by Amendment Regulation (EU) 2022/1904 with effect of October 7, 2022 and supplemented by Regulation (EU) 2022/2474 and Regulation (EU) 2023/1214 with effect of December 17, 2022 and June 24, 2023.
Paragraph 2 of Article 5n of Regulation (EU) No 833/2014 reads:
It shall be prohibited to provide, directly or indirectly, architectural and engineering services, legal advisory services and IT consultancy services to:
(a) the Government of Russia; or
(b) legal persons, entities or bodies established in Russia.'
This paragraph 2 is the key rule when it comes to legal representation or legal advice for Russian clients in German and EU law matters.
Legal Advisory Services vs. Legal Representation
According to Recital 9 of Regulation (EU) 2022/1904, the term ‘legal advisory services’ covers the provision of legal advice to customers in non-contentious matters, including commercial transactions, involving the application or interpretation of law, participation with or on behalf of clients in commercial transactions, negotiations and other dealings with third parties, and preparation, execution and verification of legal documents.
The distinguishing line is laid down in Paragraphs 5 and 6 of Article 5n of Regulation (EU) No 833/2014 stating that the prohibition of legal advisory services shall not apply to the provision of services that are strictly necessary for the exercise of the right of defense in judicial proceedings and the right to an effective legal remedy and it shall also not apply to the provision of services which are strictly necessary to ensure access to judicial, administrative or arbitral proceedings in a Member State of the European Union, such as Germany, as well as for the recognition or enforcement of a judgment or an arbitration award rendered in a Member State, provided that such provision of services is consistent with the objectives of Regulation (EU) No 833/2014 and Regulation (EU) No 269/2014.
Recital 9 of Regulation (EU) 2022/1904 states more precisely that any representation, advice, preparation of documents or verification of documents in the context of legal representation services, namely in matters or proceedings before administrative agencies, courts or other duly constituted official tribunals, or in arbitral or mediation proceedings shall be permitted.
It is therefore still permissible for German and EU lawyers to advise Russian companies in the context of legal representations.
In German legal practice, the distinction between legal advice and legal representation is not interpreted too rigidly. Even in the context of court proceedings, pre-trial legal advice remains permissible—for instance, on the question of whether to initiate legal action at all. As a rule, pre-action and ongoing representation-related advice remains permissible.
Where Paragraph 6 states that such services must be consistent with the objectives of the sanctions regulations, this is to be understood as a prohibition on advising clients on how to deliberately circumvent sanctions.
Companies Established in Russia
The Russia sanctions regulation applies to legal persons, entities or bodies (POE) established in Russia. This means that companies incorporated outside of Russia—even if they are owned or controlled by Russian entities—are not covered by the prohibition, provided that the legal advisory services do not constitute a circumvention of the sanctions provisions. As long as the advice is genuinely intended for the benefit of the non-Russian entity and not used to bypass sanctions, such services remain permissible.
Companies vs. Natural Persons
An EU, including German, attorney-at-law is prohibited from providing legal advisory services to the Government of Russia, or legal persons, entities or bodies established in Russia. Natural persons, meaning private individuals are generally not covered by the scope. Even persons on one of the EU sanction lists, in particular that in Annex I of Regulation (EU) No 269/2014, do not fall under the prohibition to provide legal advisory service. The same applies to private individuals who act on a commercial basis, such as architects or doctors and even Russian lawyers, as long as he is not part of a law firm or another legal entity.
Direct and Indirect Services
The prohibition on providing legal advisory services to the aforementioned group of persons also extends to indirect advice and should be read in conjunction with Article 12 of Regulation (EU) No 833/2014. According to this article, it is also prohibited to knowingly and intentionally participate in activities whose object or effect is to circumvent the prohibitions set out in the Regulation.
In practice, this means, for example, that legal advice provided by a German lawyer to a non-Russian subsidiary of a Russian parent company—where the advice ultimately benefits the parent company—would violate EU sanctions law. Many other scenarios are conceivable that may constitute circumvention, such as when an Indian lawyer seeks legal advice with the intention of passing it on to a Russian client.
Recent discussions around secondary sanctions show how quickly the EU regime is expanding – see our explainer on secondary sanctions for details.
Application for Exemption
A German or European lawyer may be exempted from the prohibition by an administrative act issued by the German Federal Financial Supervisory Authority (BaFin) or the German Federal Office for Economic Affairs and Export Control (BAFA), if the authority considers the provision of legal advisory services strictly necessary in the following cases:
Expand for list
the setting-up, certification or evaluation of a firewall which: (a) removes the control by a natural or legal person, entity or body listed in Annex I to Regulation (EU) No 269/2014, over the assets of a non-listed legal person, entity or body incorporated or constituted under the law of a Member State which is owned or controlled by the former; and (b) ensures that no further funds or economic resources accrue to the benefit of the listed natural or legal person, entity or body;
the functioning of a consular or diplomatic representation of the Russian Federation located in a Member State;
humanitarian purposes, such as delivering or facilitating the delivery of assistance, including medical supplies, food, or the transfer of humanitarian workers and related assistance, or for evacuations;
civil society activities that directly promote democracy, human rights or the rule of law in Russia;
the functioning of diplomatic and consular representations of the Union and of the Member States or partner countries in Russia, including delegations, embassies and missions, or international organisations in Russia enjoying immunities in accordance with international law;
ensuring critical energy supply within the Union and the purchase, import or transport into the Union of titanium, aluminium, copper, nickel, palladium and iron ore;
ensuring the continuous operation of infrastructures, hardware and software which are critical for human health and safety, or the safety of the environment;
the establishment, operation, maintenance, fuel supply and retreatment and safety of civil nuclear capabilities, and the continuation of design, construction and commissioning required for the completion of civil nuclear facilities, the supply of precursor material for the production of medical radioisotopes and similar medical applications, or critical technology for environmental radiation monitoring, as well as for civil nuclear cooperation, in particular in the field of research and development;
the provision of electronic communication services by Union telecommunication operators necessary for the operation, maintenance and security, including cybersecurity, of electronic communication services, in Russia, in Ukraine, in the Union, between Russia and the Union, and between Ukraine and the Union, and for data centre services in the Union;
the exclusive use of legal persons, entities or bodies established in Russia that are owned by, or solely or jointly controlled by, a legal person, entity or body which is incorporated or constituted under the law of a Member State, a country member of the European Economic Area, Switzerland or a partner country as listed in Annex VIII.
Legal advice under German or EU law with regard to the application to BaFin or BAFA to grant such exemption does, however, not fall under the prohibition laid down in Articel 5n(2) of Regulation (EU) No 833/2014.
Contact
Kronsteyn Law Firm specializes in legal advice on German and EU financial markets law, including the law on EU sanctions. Please contact attorney Dr. Hendrik Müller-Lankow for any questions.
We do not advise on sanctions circumvention. Engagements are screened to ensure consistency with EU objectives.
