War in Ukraine: Berlin and Paris propose new Russia sanctions

Germany is committed to powerful new EU sanctions against Russia together with France. As can be seen from a position paper transmitted to other EU countries, Berlin and Paris advertise, among other things, an even more determined approach to the Russian energy sector. This is the most important source of financing for the war budget of Kremlin chief Vladimir Putin, it is said to be justified in the text available to the German Press Agency.

This pleads to target other oil companies such as Lukoil and service companies from the oil industry. These could also be actors who are responsible for exporting Russian oil to the EU, or companies that act with Russian oil. It is therefore also conceivable to expand the mechanism of the price limit for Russian oil to European companies that transport sophisticated products from Russian crude oil between third countries.

So far, only companies have been threatened with sanctions that are involved in the transport of Russian oil at a price above the price lid. This rule aims at shipping companies, but also on companies that offer insurance, technical help as well as financing and placement services.

Cryptocurrency service provider in sight

In addition, according to the will of Berlin and Paris, financial and logistical loopholes are to be concluded, through which Russia has already dealt with existing sanctions. Accordingly, other Russian banks, foreign financial institutions to the SPFS transaction system developed by the Russian Central Bank and cryptocurrency service providers in Central Asia could land on sanction lists. “As of today, around 250 small and regional banks are involved in international transactions to support the Russian war efforts,” says the position paper.

According to Germany and France, third-country companies that contribute to sanction bypass by trading in high-tech material or raw materials such as wood must also be targeted.

New import bans, higher tariffs

Berlin and Paris can also imagine the sanctioning of other actors from the areas of automotive industry, civil aviation, gold, mechanical engineering and electrical engineering, which are associated with the military-industrial complex in Russia. New import bans or higher tariffs on certain goods are also supported. As a general goal, Germany and France also issue all of the economic actors to exclude the European market that the Russian economic sectors provide resources with war reference.

Franco-German positioning is intended as a contribution to the current planning process for the 19th package with EU Russia sanctions. It should result in a specific proposal from the EU Commission for Legal Act in the coming days. These would then have to be accepted by the governments of the Member States.

A difficult coordination process is expected again – especially because some countries like Hungary are critical of all new sanctions and a unanimous decision is required.