EU slaps new set of sanctions on Russia

The EU Council has adopted a new set of sanctions on Russia, to increase the cost for Russia to continue its war and add pressure on its already strained and fragile economy.

“This round of sanctions on Russia is the most wide-sweeping since the start of the war, together with new hybrid, human rights, and chemical weapons-related sanctions,” said the EU’s foreign policy chief Kaja Kallas. “While Putin feigns interest in peace, more sanctions are in the works. Russia’s actions and those who enable Russia face severe consequences. The longer Russia persists with its illegal and brutal war, the tougher our response will be.”

The 17th package of EU sanctions aims to further restrict Russia’s access to battlefield technologies and cut revenues from Russian energy imports by targeting an unprecedented number of vessels from Russia’s shadow fleet. The package also expands the number of individual and entity listings. And it prolongs an existing exemption from the oil price cap for the Sakhalin-2 project to ensure Japan’s energy security.

The 17th package contains the following key elements:

• Anti-circumvention measures list 189 additional vessels that are part of the shadow fleet of oil tankers or contribute to Russia’s energy revenues, bringing the total number of listings to 342. The vessels are now subject to a port access ban and a ban on provision of services.
• EU vessels listings, along with efforts from partner countries like the UK and US, are significantly reducing Russia’s ability to gain revenues from evading the price cap for oil, making it increasingly difficult to replace sanctioned vessels. All in all, exporting oil has become more complex and costly for the Kremlin, as these vessels are no longer able to operate business as usual. According to the latest data from the Oil Price Cap Coalition, there is a decrease in volumes transported and numbers of ships carrying Russian oil. Since the EU began listing these vessels, Russian crude oil deliveries have decreased on them by 76%.
• The new package also adds 31 new companies to the list providing direct or indirect support to Russia’s military industrial complex, or engaged in sanctions circumvention. This includes 18 companies established in Russia, and 13 established in third countries (6 Turkey, 3 Vietnam, 2 UAE, 1 Serbia and 1 Uzbekistan).

The sanctions also include 75 additional listings, including 17 individuals and 58 entities, responsible for actions undermining the territorial integrity, sovereignty, and independence of Ukraine. These are now subject to asset freezes and prohibition to make economic resources available, and – in the case of individuals – also to travel bans. The new listings affect mostly the Russian military and defence sectors. The new listings make use of new criteria related to shadow fleet enablers, and the new criteria for the military industry, both adopted in the 16th package. In addition, the listings include one Russian shipping company (Joint Stock Company Volga Shipping) important for generating revenue. Finally, the new listings also target actors involved in the looting of cultural heritage, and others who were active in occupied territories.

On trade measures, the package further expands the list of dual use and advanced technology items subject to export restrictions with the aim of cutting Russia off from key technologies, in particular for military use, such as:

• chemical precursors to energetic material. There is evidence these chemical precursors are being used, directly or indirectly, as propellants for Russian missiles. Consequently, items such as sodium chlorate, potassium chlorate, aluminium powder, magnesium powder and boron powder were added to this package.
• spare parts and components of high-precision Computer Numerical Control (CNC) machine tools. While machine tools are already largely covered by sanctions already in place, spare parts such as ball screws and encoders are essential for Russia to maintain its industrial base serving the military system.

The 17th package includes an extension of the exemption from the oil price cap, allowing for the transport of crude oil originating in the Sakhalin-2 Project in Russia by vessel to Japan, based on energy security concerns. The extension is granted for one year until 28 June 2026.

Source: EUbusiness