War
Foreign ministers decide on new EU sanctions against Russia
For the first time, tough EU sanctions are being imposed on Russia’s multi-billion dollar liquefied natural gas business. Photo
© Arne Immanuel Bänsch/dpa
The EU is once again stepping up its punitive measures because of Russia’s war of aggression against Ukraine. This affects billion-dollar liquefied natural gas deals, but not only that.
Foreign Minister Annalena Baerbock described the package as part of the determined support for Ukraine. Russian President Vladimir Putin wanted to break the country and the European peace order, said the Green politician. But he achieved the opposite.
The sanctions against LNG business stipulate that ports such as the one in Zeebrugge, Belgium, may no longer be used to ship Russian LNG to third countries. This is expected to result in Russia being able to sell less liquefied natural gas due to a lack of transport capacity and generating less profits that could be used to continue the war of aggression against Ukraine.
Billions of cubic metres of LNG affected
Until now, Russian tankers, often suitable for use in ice-covered waters, have been bringing liquefied natural gas from the Yamal Peninsula in Siberia to EU ports. There, the LNG is then transferred to normal tankers that travel to more distant regions of the world. This means that the “icebreaker” tankers can carry out significantly more missions.
According to the EU Commission, around four to six billion cubic meters of Russian LNG were transported via EU countries to other countries last year. This could affect transactions worth several billion euros. LNG imports for use in the EU are not affected. Some EU countries still consider them indispensable for ensuring energy supplies at acceptable prices.
Fight against sanctions evasion
In addition to the LNG sanctions, the 14th EU package also contains numerous measures designed to make it more difficult to circumvent existing sanctions. For example, violations of the current rules mean that Russia’s arms industry can still use Western technology to produce weapons for the war against Ukraine.
Specifically, EU companies should check more carefully that critical goods they export do not end up in Russia. However, the German government prevented the extension of the so-called “No Russia Clause” to subsidiaries. The reason was obviously warnings from companies who feared excessive administrative costs and loss of sales.
The “No Russia Clause” requires EU exporters to contractually prohibit the re-export of certain goods to Russia and the re-export for use in Russia. This affects, among other things, aviation goods, weapons and advanced technology goods used in Russian military systems. The 14th sanctions package also adds industrial know-how for the manufacture of military goods to the list.
Companies in China and Türkiye affected
The new package also includes sanctions against dozens of other companies that are accused of contributing to Russia’s military and technological strengthening or to the development of its defense and security sector. In future, the EU will no longer be allowed to sell goods and technologies that can be used for military purposes to them. According to the EU, some of these companies are based in third countries such as China, Kazakhstan, Kyrgyzstan, Turkey and the United Arab Emirates.
In addition, the use of the Russian Financial Intelligence Service (SPFS) is largely prohibited because, from the EU’s perspective, it was developed by the Central Bank of Russia to neutralise the effect of sanctions.
In view of Russia’s continued attempts to disrupt democratic processes in the EU, for example through disinformation campaigns, it was decided that political parties and foundations, non-governmental organisations and media service providers across the EU would no longer be allowed to accept funding from the Russian government and its representatives.