The European Union adopted, on Friday 8 April, the fifth package of sanctions against Russia following an agreement by the ambassadors of the Member States to the EU on Thursday 7 April in the evening.
The EU has decided to ban the import of any kind of Russian coal or coal exported from Russia, which, according to the European Commission, represents a loss of revenue for Russia of around €8 billion per year. This measure will take effect in 120 days, i.e. next August. By the end of the summer, Germany should be independent of Russian coal.
Member States also agreed on additional financial measures. They include a total ban on trading and an asset freeze for four Russian banks - Otkritie, Novikombank, Sovkombank and VTB - which are now completely cut off from the markets after being disconnected from Swift. These banks account for 23% of the market share of the Russian banking sector, according to the European Commission.
In addition, it will be prohibited to provide high-value crypto-asset services to Russia and advice on trusts to Russian citizens, making it more difficult for them to store their wealth in the EU. The Union has also decided to extend the bans on the export of banknotes and the sale of securities to all official EU currencies.
In terms of transport, Russian and Belarusian road freight operators are now prohibited from transporting goods by road within the EU, including in transit, with derogations for essential goods such as agricultural and food products, including wheat, humanitarian aid, pharmaceuticals and energy. Similarly, ships sailing under the Russian flag will no longer be allowed to enter EU ports, with exemptions for medical, food, energy and humanitarian products.
In addition, the EU bans the export of additional products, worth €10 billion. According to several sources, this is equivalent to the value of trade between the US and Russia per year. These bans affect areas in which Russia is heavily dependent on the EU. These include quantum computing, advanced semiconductors, sensitive machinery, transport and chemicals and specialised catalysts used in the refining industry. In addition, paraffin and fuel additives, which may be used by the Russian military, are banned from export.
The EU has also decided to ban the import of additional products from Russia worth €5.5 billion per year. This includes cement, rubber products, wood, spirits (including vodka, which alone is worth €50 million a year), liqueurs and high-end seafood (including caviar). All the import restrictions on Russian products since the first sanctions package now amount to between €13 and 17 billion, according to the Commission, or 8-10% of total imports in 2021. In addition, a measure has been taken to prevent circumvention of sanctions against potash imports from Belarus.
Finally, Russian nationals and entities will no longer be able to participate in public procurement in the EU, with limited exceptions, if there is no viable alternative.
In addition, financial and non-financial support to Russian state-owned or state-controlled entities in EU, Euratom and Member State programmes will be restricted. The Commission will terminate participation in, and suspend all payments under, all ongoing grant agreements with Russian public bodies or related entities under Horizon 2020 and Horizon Europe, Euratom andErasmus+. No new contracts or agreements with Russian government agencies or related entities will be concluded under these programmes.
In addition, the EU decided to sanction 217 additional individuals and 18 entities. These include Vladimir Putin’s two daughters, oligarchs and their families, propaganda officials and 179 members of the Donetsk and Luhansk ‘governments’ and ‘parliaments’, companies in the military industry, the four banks that have had their assets frozen and a transport-related company. A total of 1,091 individuals and 80 entities have been sanctioned since 2014.
Nearly €30 billion in frozen assets
The Commission announced that Member States have already frozen assets worth €29.5 billion, including property such as boats, helicopters, real estate and works of art worth a total of almost €6.7 billion. In addition, approximately €196 billion of transactions were reportedly blocked.
So far, just over half of the Member States have reported to the Commission on the measures taken, according to the Commission. The Commission’s ‘Freeze and Seize Task Force’ met with US and Ukrainian representatives on Friday 8 April to discuss international cooperation on enforcing sanctions.
Furthermore, the Commission recalled that on the 5th it issued guidance to EU Member States on assessing and preventing threats to EU security and public order posed by Russian and Belarusian investments.
See the guidelines: https://aeur.eu/f/177 (Original version in French by Camille-Cerise Gessant and Léa Marchal)