The sixth package of sanctions against Russia is the first “to hit Europe’s economy really hard – maybe even harder than Russia’s,” says a senior EU diplomat. The negotiations between the 27 governments are correspondingly difficult, especially since unanimity is required for sanctions. The ambassadors of the member states in Brussels discussed the Commission’s proposals for the first time on Wednesday, which include an oil embargo. Those involved hope that an agreement could be reached this Friday or at the latest by the weekend.
The biggest points of contention are the transitional periods for the oil embargo and the ban on EU shipping companies transporting the raw material by tanker to other customers. In the commission draft, which the Süddeutsche Zeitung It states that imports of Russian crude oil will be banned after six months and those of refined products such as gasoline and diesel after eight months. The proposed law grants Hungary and Slovakia an exception. The two countries have until the end of 2023 as they are almost completely dependent on Russia’s Druzhba pipeline and have no seaport for tankers from other producing countries.
But that’s not enough for the duo. Hungary’s Foreign Minister Péter Szijjártó is calling for pipeline oil to be completely exempted from the embargo, and Slovakia’s Economy Minister Richard Sulík is calling for at least a three-year transition period. In addition, the special rule arouses desire: Czech Prime Minister Petr Fiala is now also demanding a delay of two to three years, although the country is less dependent on the Druzhba tube. And Bulgaria’s Energy Minister Alexandar Nikolov said on Thursday that he too insisted on longer deadlines. According to EU diplomats, a compromise could be to give Hungary and Slovakia even more time. In addition, the Commission could promise EU financial aid to member states for upgrading refineries and building pipelines.
The price of oil rose sharply after Commission President Ursula von der Leyen presented the embargo proposals on Wednesday. In the short term, the project will bring Russian President Vladimir Putin even more revenue, especially since imports will not be phased out until the end of the year. How much this ban hits the state treasury afterwards depends on whether Russia can sell the lost quantities elsewhere. To make this more difficult, the sanctions package prohibits EU shipping companies from using their tankers to ship Russian oil products. Insurers are also no longer allowed to cover these transports.
Greece is defending its shipping industry
However, this proposal is also controversial among EU ambassadors. According to reports, the Greek representative is complaining about the great strain on his country’s important shipping industry and warns that, for example, Asian rivals could take on the orders and then be laughing third parties. As early as the fifth sanctions package, which was decided in April, Athens defended itself against overly strict rules for ports and ships. At the time, the Commission wanted to impose a ban on Russian ships entering the country, but because of resistance from Greece, this was narrowed down to a ban on ships flying the Russian flag. That reduces the impact enormously, because many ships owned by Russians fly the flags of foreign countries.
EU tankers also often sail under foreign flags. Therefore, according to the Commission draft, the planned transport ban for oil should apply to all ships that fly an EU flag, are owned or operated by EU companies – a very broad definition. It remains to be seen whether this comprehensive approach will survive the negotiations in Brussels.
The sanctions package also includes a ban on Russians buying real estate in the EU or shares in real estate funds. Tax, PR and management consultants as well as auditors are no longer allowed to work for Russians. In addition, the EU imposed entry and asset freezes on 58 other people. Among them are many officers of the 64th Motorized Rifle Brigade, which is said to be responsible for war crimes in Bucha. Also on the list is a certain Vladimir Mikhailovich Gunyaev, better known as Cyril I, the Russian Orthodox Patriarch. The reason given by the Commission is that he was one of the most prominent supporters of the attack on Ukraine.