New Russia sanctions: EU states agree on compromise

New Russia sanctions: EU states agree on compromise
New Russia sanctions: EU states agree on compromise

The measures against Russia could have been adopted earlier. But Germany blocked it. Now there is a compromise.

The EU states have agreed on a new package of sanctions against Russia. The current Belgian EU Council Presidency announced this in Brussels on Thursday. The planned punitive measures are intended in particular to combat the circumvention of existing sanctions. This means, for example, that Russia’s arms industry can still use Western technology to produce weapons for the war against Ukraine.

In addition, it is planned to impose tough EU sanctions for the first time against Russia’s billion-dollar liquefied natural gas (LNG) business. According to diplomats, ports such as the one in Zeebrugge, Belgium, are to be banned from being used to ship Russian LNG to third countries. This will then lead to Russia being able to sell less liquefied natural gas and invest less money in its war of aggression due to a lack of transport capacity.

Germany initially blocked new sanctions package

The new sanctions package was proposed by the EU Commission at the beginning of May. The fact that no agreement was reached sooner was mainly due to German concerns and requests for changes. Recently, it felt as if Germany was the new Hungary, said an EU official, alluding to the fact that the Budapest government of Prime Minister Viktor Orban had repeatedly delayed decisions on Russia sanctions in the past.

According to diplomats, the German government’s main demand in the negotiations was that plans for stricter measures against circumventing the existing sanctions against Russia be watered down. The reason was obviously warnings from German businesses, which feared excessive administrative costs and loss of sales.

Subsidiaries may continue to supply Russia

Supporters of decisive action against sanctions evasion, however, pointed to estimates by the EU Commission according to which goods worth hundreds of millions of euros are still being delivered to Russia via subsidiaries of European companies that should no longer be allowed to land there due to EU sanctions. In concrete terms, this concerns goods that can contribute to the development of Russia’s defense and security sector.

According to diplomats, the compromise now stipulates that the so-called “No Russia Clause” does not have to be applied to subsidiaries as planned for the time being. It requires EU exporters to contractually prohibit the re-export of certain goods to Russia and the re-export for use in Russia. This affects, for example, aviation goods, jet fuel, weapons and advanced technology goods used in Russian military systems.

Source: Stern

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