Russia faces potential new penalties from Berlin and Paris
The German and French governments have initiated a new push for robust sanctions against Russia, as part of the EU's 19th package. The aim is to exclude all economic actors providing resources to Russian economic sectors linked to the ongoing war from the European market.
The proposed sanctions target third-country companies that are contributing to circumventing existing sanctions through trade in high-tech materials or raw materials like wood, or by supporting the Russian military industry sectors. These sectors include automotive, aviation, gold, machinery, and electrical engineering. The focus is on companies in unspecified third countries doing business with Russia in these sectors.
The sanctions also aim to affect exporting Russian oil to the EU or trading in Russian oil. The price cap mechanism for Russian oil is proposed to be expanded to European companies transporting refined products derived from Russian crude between third countries.
Around 250 small and regional banks are involved in international transactions supporting Russia's war efforts, according to the position paper. The proposal includes sanctioning these banks, as well as adding more Russian banks, foreign financial institutions connected to Russia's SPFS transaction system, and Central Asian cryptocurrency service providers to sanctions lists.
The proposed sanctions target Russia's energy sector, specifically oil companies like Lukoil and service providers in the oil industry. The goal is to close financial and logistical loopholes that Russia has been using to circumvent existing sanctions.
The negotiation process for these new sanctions is expected to be challenging, particularly due to the opposition from countries like Hungary. The EU Commission is expected to present a concrete proposal for legal acts in the coming days. Once presented, these legal acts would then need to be approved by the governments of the member states.
A unanimous decision is required for the new sanctions to be implemented. Currently, only companies involved in transporting Russian oil above the price cap are threatened with sanctions. The new proposal expands this to include a wider range of economic actors and industries.
