On Tuesday 15 March, the European Union officially adopted a fourth package of sanctions against Russia in response to its invasion of Ukraine.
The EU Council decided on a total ban on all transactions with certain Russian state-owned companies in various sectors described by the European Commission as the ‘Kremlin’s military-industrial complex’.
EU credit rating agencies are prohibited from rating Russia and Russian companies, as well as the provision of rating services to Russian clients, which would result in their further loss of access to EU financial markets, the European Commission said in a statement.
The new measures also introduce a ban on new investments in the Russian energy sector and an overall restriction on exports of equipment, technology and services for the energy industry. This applies to all Russian companies, including Gazprom, an EU source said. Limited exceptions for civil nuclear energy and the transport of certain energy products to the EU are provided for. While some Member States advocate an embargo on Russian energy, there is a lack of unanimity on this measure. On Tuesday, Hungarian Foreign Minister Peter Szijjarto warned that the new package did not affect his country’s energy supply and that Hungarian oil and gas group MOL could continue crude oil production in the BaiTex field in Russia.
Trade sanctions
The EU has decided to target imports of Russian finished steel products. The aim is to deprive Russia of the revenue from these exports to the EU, which is the main destination for these products. The Regulation provides that these products, exported from another country but originating in Russia, should also be covered in order to avoid circumvention.
These products are currently subject to a safeguard measure put in place by the EU in 2018 to protect European producers (see EUROPE 12750/25). Above a quota based on the historical level of imports for a given country, a tariff of 25% applies to steel imports from that country. In order not to disrupt the European market, the Commission proposed adjusting the safeguard measures by distributing the Russian quotas to other trading partners.
In addition, the EU is imposing an export ban on 22 categories of so-called luxury goods to Russia. This includes, for example, caviar, certain wines and spirits, certain luggage items, pearls, precious stones or expensive vehicles, including cars worth more than €50,000. The Commission estimates that exports of these products to Russia amounted to €3.5 billion in 2021. However, the ban will only apply to products worth more than €300 so as not to target the middle class, which could consume some of these products, according to an EU source.
Targeted sanctions
In addition, 15 persons and nine sanctioned entities are subject to the sanctions. Eleven are oligarchs or business people involved in the steel, defence or fertiliser sectors - including Chelsea FC owner Roman Abramovich - and four are linked to disinformation campaigns, including Channel One Russia CEO Konstantin Ernst.
The nine sanctioned companies are active in the military and defence sector, for instance in military production and technology, jet fuel, weapons, and military tanks, helicopters and aircraft. According to the EU Council, these are the main companies in the aviation, military and dual-use equipment, shipbuilding and mechanical engineering sectors.
With these new sanctions, 877 persons and 62 entities are subject to restrictive measures and deemed responsible for undermining or threatening the territorial integrity, sovereignty and independence of Ukraine. These measures will be in effect until 15 September 2022.
On Tuesday, Dutch Finance Minister Sigrid Kaag announced to her parliament that Dutch banks and financial institutions had already frozen €6 million of Russian assets.
See the decisions: https://aeur.eu/f/sb (Original version in French by Camille-Cerise Gessant and Léa Marchal, with Mathieu Bion)