BusinessEurope’s Deputy Director General Luisa Santos detailed all the difficulties that European businesses, especially SMEs, are facing as a result of the sanctions against Russia in response to the Russian invasion of Ukraine, at a hearing with MEPs on the Internal Market and Consumer Protection Committee (IMCO) on Monday 28 March.
Ms Santos reported many difficulties in the implementation of the different waves of sanctions - including the recently decided fourth sanctions package (see EUROPE 12911/1) - which have a “huge” impact on different sectors and SMEs. Ms Santos said that companies need clear guidelines so that they know how to act within the law.
Above all, sanctions hitting European companies harder than Russians must be avoided at all costs, she insisted. She gave the example of Russian steel imports. Many European companies bought Russian steel, which was already imported before the sanctions. The problem is that these companies cannot make use of it. This situation raises questions about the effectiveness of the sanctions, as European companies cannot make use of steel that has already been paid for and is on European territory.
Ms Santos also said that the ban on Russian airspace made it difficult for European operators to access many Eastern countries, both for business travel and for the movement of goods. The same terms apply to the problem of payments. Many Russian companies are no longer paying European companies for services already provided or products already sold.
Moreover, sanctions and war are aggravating already existing shortages due to heavy dependence on Russia, such as for titanium, potassium and palladium, she added. For her, diversification of supply is the way forward. This requires an appropriate trade policy, giving the example of the partnership with Chile, she said. Ms Santos insisted in any case that businesses should be better taken into account in the design and implementation of sanctions.
In addition to the consequences of the sanctions, another unexpected difficulty caused by the war in Ukraine is the shortage of truck drivers, she continued. Responding to MEPs, Ms Santos explained that many truck drivers on European territory are indeed Ukrainian men who have returned to their country to fight at the front.
In general, Ms Santos warned against the temptation among some Member States to block certain products from export, particularly in the food sector, as had been the case during the pandemic with certain medical products.
For its part, the European Commission has assured that it will publish new guidelines to help companies implement the sanctions against Russia. The senior official present acknowledged that the ‘Single Market Emergency Instrument’ (SMEI - see EUROPE 12866/7) has been delayed to strengthen governance in a time of crisis. In addition, group purchasing should be a more common solution, according to the senior official. Finally, she stressed the role of recognition of refugees’ professional qualifications, especially for doctors and teachers. (Original version in French by Pascal Hansens)