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EU agrees: 5th round of sanctions against Russia

The European Commission welcomes the agreement by the Council to adopt a fifth package of restrictive measures against Putin's regime in response to its brutal aggression against Ukraine and its people.

 

Together with the four previous packages, these sanctions will further contribute to ramping up economic pressure on the Kremlin and cripple its ability to finance its invasion of Ukraine. These measures are broader and sharper, so that they cut even deeper into the Russian economy. They have been coordinated with international partners.

The Commission and the EEAS are working on additional proposals for possible sanctions, including on oil imports, and are reflecting on some of the ideas presented by Member States, such as taxes or specific payments channels, such as an escrow account.

Beyond sanctions, the EU has made it clear that reducing our dependence on energy imports from Russia is an urgent imperative.

The 5th round of sanctions contains the following six elements:

1) Coal ban |

An import ban on all forms of Russian coal. This affects one fourth of all Russian coal exports, amounting to around €8 billion loss of revenue per year for Russia.

2) Financial measures |

  • A full transaction ban and asset freeze on four Russian banks, which are now totally cut off from the markets. They represent 23% of market share in the Russian banking sector and will, therefore, further weaken Russia’s financial system.
  • A prohibition on providing high-value crypto-asset services to Russia. This will contribute to closing potential loopholes.
  • A prohibition on providing advice on trusts to wealthy Russians, making it more difficult for them to store their wealth in the EU.
3) Transport |

  • A full ban on Russian and Belarusian freight road operators working in the EU. Certain exemptions will cover essentials, such as agricultural and food products, humanitarian aid as well as energy.
  • An entry ban on Russian-flagged vessels to EU ports. Exemptions apply for medical, food, energy, and humanitarian purposes, amongst others.
4) Targeted export bans |

  • Further targeted export bans – worth €10 billion – in areas in which Russia is vulnerable due to its high dependency on EU supplies. This includes, for example, quantum computing, advanced semiconductors, sensitive machinery, transportation and chemicals. It also includes specialist catalysts for use in the refinery industry. This will continue to degrade Russia’s technological base and industrial capacity.
  • Adding jet fuel and fuel additives, which may be used by the Russian army, to the existing export ban.
5) Extending import bans |

  • Additional import bans – worth €5.5 billion – including cement, rubber products, wood, spirits (including vodka), liquor, high-end seafood (including caviar), and an anti-circumvention measure against potash imports from Belarus. These measures will also help to close loopholes between Russia and Belarus.
6) Excluding Russia from public contracts and European money; legal clarifications and enforcement |

  • Full prohibition on the participation of Russian nationals and entities in procurement contracts in the EU. Limited exceptions may be granted by the competent authorities where there is no viable alternative.
  • Restriction on financial and non-financial support to Russian publicly owned or controlled entities under EU, Euratom and Member State programmes. For instance, further to measures previously announced in research and education, the Commission will terminate participation in all ongoing grant agreements to Russian public bodies or related entities, and suspend all related payments, under Horizon 2020 and Horizon Europe, Euratom, and Erasmus+. No new contracts or agreements with Russian public bodies or related entities will be concluded under these programmes.
  • Addressing various overlaps between export restrictions on dual-use items and advanced technologies and other provisions.
  • Extending to all official EU currencies the prohibitions on the export of banknotes and on the sale of transferrable securities.

     

    The Commission also welcomes that an additional 217 individuals and 18 entities have now been sanctioned.

    This includes all 179 members of the so-called “governments” and “parliaments” of Donetsk and Luhansk. In total, 1091 individuals and 80 entities have been sanctioned since 2014.

    Background

    Today’s agreement builds on the wide-ranging and unprecedented packages of measures the EU has been taking in response to Russia’s aggression against Ukraine’s territorial integrity and mounting atrocities against Ukrainian civilians and cities.

     

    Press statement by President von der Leyen on the fifth round of sanctions against Russia

    We all saw the gruesome pictures from Bucha and other areas from which Russian troops have recently left. Yesterday, I conveyed to President Zelenskyy my condolences and assured him of the European Commission’s full support in these terrible times. These atrocities cannot and will not be left unanswered. The perpetrators of these heinous crimes must not go unpunished. The EU has set up a Joint Investigation Team with Ukraine. Its task is to collect evidence and investigate war crimes and crimes against humanity in Ukraine.

    Russia is waging a cruel and ruthless war, not only against Ukraine’s brave troops, but also against its civilian population. It is important to sustain utmost pressure on Putin and the Russian government at this critical point. The four packages of sanctions have hit hard and limited the Kremlin’s political and economic options. We are seeing tangible results. But clearly, in view of events, we need to increase our pressure further. Today, we are proposing to take our sanctions a step further. We will make them broader and sharper, so that they cut even deeper in the Russian economy.

    This fifth package has six pillars. First, we will impose an import ban on coal from Russia, worth EUR 4 billion per year. This will cut another important revenue source for Russia.

    Second: a full transaction ban on four key Russian banks, among them VTB, the second largest Russian bank. These four banks, which we now totally cut off from the markets, represent 23% of market share in the Russian banking sector. This will further weaken Russia’s financial system.

    Third: a ban on Russian vessels and Russian-operated vessels from accessing EU ports. Certain exemptions will cover essentials, such as agricultural and food products, humanitarian aid as well as energy. Additionally, we will propose a ban on Russian and Belarusian road transport operators. This ban will drastically limit the options for the Russian industry to obtain key goods.

    Fourth: further targeted export bans, worth EUR 10 billion, in areas in which Russia is vulnerable. This includes, for example, quantum computers and advanced semiconductors, but also sensitive machinery and transportation equipment. With this, we will continue to degrade Russia’s technological base and industrial capacity.

    Fifth: specific new import bans, worth EUR 5.5 billion, to cut the money stream of Russia and its oligarchs, on products from wood to cement, from seafood to liquor. In doing this, we also close loopholes between Russia and Belarus.

    Sixth: We take a number of very targeted measures, such as a general EU ban on participation of Russian companies in public procurement in Member States, or an exclusion of all financial support, be it European or national, to Russian public bodies. Because European tax money should not go to Russia in whatever shape or form.

    Finally, we are also proposing further listings of individuals, which HR/VP, Josep Borrell, will explain to you. But this is not all. We are working on additional sanctions, including on oil imports, and we are reflecting on some of the ideas presented by the Member States, such as taxes or specific payment channels such as an escrow account.

    Today, more than 40 countries apply sanctions like these. To take a clear stand is not only crucial for us in Europe, but also for the rest of the world. A clear stand against Putin’s war of choice. A clear stand against the massacre of civilians. And a clear stand against the violation of the fundamental principles of the world order.

    Slava Ukraini.

     

    This article is shared by courtesy of the European Commission. For more news about the Ukraine-Russia conflict, click here.

    Narjiss Ghajour

    Editor-in-Chief of Maritime Professionals

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