On Thursday 6 October the Council of the European Union formally adopted the eighth package of EU sanctions against Russia in response to its escalating strategy of military aggression against Ukraine (see EUROPE 13036/4, 13031/2).
The package includes the introduction of a dynamic cap on the international price of Russian oil in the EU which, once implemented, should allow third countries to continue to buy Russian oil while reducing revenue going to Russia. The participating countries are expected to set the level of this cap, which may change over time depending on the price of crude oil, in October or November, i.e. before the start of the European embargo on Russian oil (5 December for crude oil and 5 February 2023 for petroleum products). It will require confirmation by the Member States through a new unanimous decision of the EU Council.
This cap is accompanied by a ban on European shipping companies transporting Russian oil around the world. This measure was problematic for maritime nations such as Greece and Cyprus, who feared that other companies flying flags elsewhere in the world (Liberia, Marshall Islands, Panama) would take advantage of it (‘reflagging’).
According to a European source, the real risk of relocation is in Panama, hence the importance of monitoring and controls by all countries participating in the cap on the price of Russian oil. However, the transport ban complements the already agreed EU ban for banking and insurance services related to the oil trade, which are mainly provided by Western companies, so the possibilities of the Russian oil price cap being misused appear limited, according to this source.
It should be noted that pilot services for oil tankers are subject to a derogation.
Trade restrictions. Another part of the EU sanctions concerns the suppression of trade between the EU and Russia in order to further weaken Russia’s military-industrial base.
Imports of steel and semi-finished steel products will be banned from the end of September 2023, with some products being allowed for a longer period of time. This concerns Russian products and products processed in third countries incorporating Russian steel products. However, steel products used in the manufacture of nuclear sites are exempted, according to a second source.
A range of Russian-made industrial goods are also targeted, such as cosmetics, plastics, vehicles, ceramics, stoneware and some jewellery (but not diamonds).
The EU’s export ban on Russia has now been extended to electronic equipment (transistors, electronic components, memories, cameras) used in the manufacture of military equipment, certain chemical substances, other aviation spare parts, coal and lignite, goods that can be used for torture, and the provision of legal or computer services.
According to the Commission, compared to the pre-war situation, two thirds of imports from Russia are now banned and one third of European exports to Russia are banned.
It should be noted that in the financial sector, the ban on crypto-asset trading will now be total, with the removal of the threshold for transactions below €10,000.
Listings. The EU also decided to add 30 individuals and 7 entities to the list of natural and legal persons subject to sanctions (territorial ban and freezing of assets in the EU). This includes people involved in organising sham referenda in the four Ukrainian territories annexed by Russia, other individuals from the Russian Ministry of Defence profiting from the war effort, as well as personalities involved in Kremlin propaganda, such as the intellectual Aleksandr Dugin and the singers Yulia Chicherina and Nikolay Rastorguev.
A specific category has also been added to the EU sanctions framework. It concerns individuals and entities involved in sanctions circumvention, sometimes in third countries.
Finally, an EU national will no longer be allowed to sit on the boards of Russian state-owned companies already subject to EU sanctions.
See the eighth EU sanctions package: https://aeur.eu/f/3gl (Original version in French by Mathieu Bion)