EU Implements New Sanctions Against Russia Amid Ongoing Ukraine Conflict

On Thursday, the ambassadors from the 27 EU member states reached an agreement on the 21st sanctions package aimed at Russia. European Commission President Ursula von der Leyen announced that 32 additional Russian banks will now be subject to sanctions. This latest set of punitive measures also targets Russian cryptocurrency firms and oil trading platforms. Furthermore, the EU is preparing to prevent Russian soldiers involved in the conflict against Ukraine from entering European territories. One of the key strategies to limit Russia's oil revenue is to suspend the automatic price cap adjustments on Russian oil sales, commonly referred to as the oil price ceiling, for a period of twelve months. This move is essential as the cap would have otherwise increased because of rising global market prices driven by the ongoing conflict in Iran and the blockade of the Strait of Hormuz, ultimately benefiting Russia financially. The oil price cap, which regulates Russian oil sold to non-EU countries like India, China, and Turkey, was initially implemented in 2022 in collaboration with the USA, Japan, Canada, and the UK. Companies risking sanctions for selling Russian oil above this cap include shipping firms, as well as those providing insurance, technical assistance, financing, and brokerage services. The agreement on these sanctions followed weeks of complex negotiations among EU states, with some members advocating for eased measures in favor of domestic businesses. They contend that penalties should not inflict greater economic harm on the EU than on Russia itself. This has created a fundamental dilemma, as an already extensive list of sanctions makes it increasingly challenging to identify new measures that would significantly affect Russia without disproportionately impacting EU businesses and populations. Compromises were necessary as all proposals must be unanimously agreed upon by the 27 state governments. For instance, Greece's insistence led to a less comprehensive implementation of a transport ban on Russian liquefied natural gas (LNG) to third countries, as existing contracts were allowed to continue, benefitting Greek shipowners. One notable exemption in the latest sanctions was the head of the Russian Orthodox Church, Patriarch Kirill, who endorses the war against Ukraine but remains unsanctioned due to pressure from Bulgaria. Import restrictions on Russian Alaska pollock and bans on cod did not materialize either after diplomatic back-and-forths indicated some member states needed softer penalties. Germany, Portugal, and France were among those advocating for a reduction in the proposed sanctions, particularly against the reduction of Alaska pollock imports, which could significantly impact both producers and consumers in Germany, where the world’s largest fish stick factories are located. Production limitations may harm the supply and cause price increases for consumers. Despite these compromises and discussions, the legal texts of the sanctions package still need formal approval from the EU Council of Ministers, which is largely seen as a procedural step. As the Russian invasion of Ukraine continues into its fourth year, von der Leyen also took this opportunity to commend the courage of Ukraine's defensive efforts, emphasizing that Russia's attempts to conquer Ukraine are failing and that the costs for Russia are escalating. In parallel, recent conversations between US Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov at the ASEAN Foreign Ministers Meeting in Manila yielded no notable progress towards diplomatic reconciliation. Related Sources: • Source 1 • Source 2