Sunday

17th Dec 2017

EU blacklists more Russians, prepares economic sanctions

  • EU sanctions are getting closer to Putin's inner circle (Photo: malyousif)

EU ambassadors in a marathon meeting on Thursday (24 July) added 15 more individuals, nine companies and nine institutions from Russia and east Ukraine to an existing blacklist of 72 individuals and two firms linked to the annexation of Crimea.

The names will be published on Friday afternoon in the bloc's Official Journal.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

They are expected to include eastern Ukrainian separatists believed to be responsible for the downing of the Malaysia Airlines plane - a disaster which killed 298 people, mostly EU citizens.

The ambassadors also agreed to change the legal parameters of the blacklist, so that cronies and oligarchs close to Russian President Vladimir Putin can be designated in future.

The day-long meeting also looked at a raft of economic sanctions proposed by the European Commission, which could be adopted next week if Russia does not change course on Ukraine.

Ambassadors were set to continue their talks on Friday on the economic sanctions front.

According to an EU diplomat: "it was not foreseen for them to agree today and it is an acceleration that they meet tomorrow."

The sanctions, according to an EU commission paper seen by EUobserver, should be effective and respect a cost/benefit ratio - meaning they should have a considerable impact on the Russian economy but should also take into account "adverse impacts on the EU economy from Russian retaliations".

They are to be evenly spread across sectors and member states, as financial sanctions primarily hit the City of London, while defence sanctions are mostly to be felt by France, which faces a cost of €1.5 billion in penalties if it breaches a contract to deliver two warships.

For its part, Germany insisted that all sanctions should be "legally defensible" and easy to implement, as well as "reversible" if Russia does change its mind.

The proposed sanctions revolve around making Russian state-owned banks and companies more fragile by restricting their access to capital markets.

In 2013, the paper reads, almost half of all bonds issued by Russian state-owned banks were issued in the EU (notably the UK) - €7.5 billion out of a total of €15.8 billion.

"Restricting access to capital markets for Russian state-owned financial institutions would increase their cost of raising funds and constrain their ability to finance the Russian economy, unless the Russian public authorities provide them with substitute financing. lt would also foster a climate of market uncertainty that is likely to affect the business environment in Russia and accelerate capital outflows," the commission paper says.

Businesses in Russia would be hurt by a hike in interest rates and fewer avenues of funding, while the direct negative impact on the EU would be "limited and concentrated in jurisdictions with high levels of financial intermediation" - an allusion to the City of London.

"Other jurisdictions such as Switzerland, Singapore, Hong Kong or Tokyo would only provide significant substitution capacity over time, but they could not fully compensate for the loss of EU and US investors," the paper adds.

As for a possible arms embargo, it could be introduced for the "whole defence sector, applying to all the products listed in the EU common military list."

Russia has €3.2 billion worth of exports at stake, which could hit eastern member states who still own Soviet-era jets and military technology which needs spare parts from Russia.

Export licences - such as France's Mistral warships - are a national competence and the EU commission notes that some member states have suspended them.

France may still go ahead with its Mistral sale, as the commission says it is a "political decision" by member states if the ban should apply only to future or also to existing contracts.

"There are a number of options to deal with the issue, such as a clause of safeguard for the execution of contracts signed before a certain date, which could be equally applied to both exports and imports and to spare parts and servicing for existing equipment," the paper notes.

A harder-hitting sanctions than the arms embargo would be a ban on so-called dual use technologies and goods produced in the EU, which can also have a military purpose.

Russia imports €20 billion worth of these dual use items, such as high performance computers and electronics or special materials.

In addition, the EU may halt exports high-tech goods Russia needs for oil and gas exploration or steel production, with the US expected to co-ordinate and impose a similar ban.

"The possibility for Russia to substitute such products and technologies originating from the EU or US is low in view of the likely unavailability of similar products (of similar degree of sophistication and quality) elsewhere," the paper says.

EU readies new sanctions on defiant Russia

EU ambassadors meeting in Brussels on Thursday are set to discuss a raft of new sanctions on Russia, as Moscow has shown no signs of wanting to meet an EU ultimatum over Ukraine.

EU to hit Russia with economic sanctions next week

The EU is set to impose economic sanctions on Russia next week. Meanwhile, southern member states want the European Commission to consider any blowback effect when it assesses national deficits.

EU blacklists three Putin 'cronies'

The EU has for the first time included three of Vladimir Putin's loyal oligarchs and his propaganda chief on an existing blacklist in response to Russia's continued "destabilisation" of Ukraine.

Feature

Lebanon crisis overshadows EU aid for Syrian refugees

Lebanon hosts over one million Syrian refugees, and has received some €1bn in EU funds. Caught in a geo-political tug of war between Saudi Arabia and Iran, Lebanon's domestic politics have cast a longer shadow over its Syrian 'guests'.

EU complicit in Libyan torture, says Amnesty

The EU and its members states have signed up to 'Faustian pact' with Libyan authorities in the their effort to prevent migrant and refugee boat departures towards Italy, says Amnesty International.

News in Brief

  1. EU adopts 'track-and-trace' tobacco system
  2. Luxembourg appeals Amazon tax decision
  3. EU leaders agree to open phase 2 of Brexit talks
  4. Juncker: May made 'big efforts' on Brexit
  5. Merkel took 'tough' line on Russia at EU summit
  6. EU leaders added line supporting 'two-state' solution
  7. EU leaders agree to 20 European Universities by 2024
  8. Belgian courts end legal proceedings against Puigdemont

Stakeholders' Highlights

  1. Dialogue PlatformThe Gülen Community: Who to Believe - Politicians or Actions?" by Thomas Michel
  2. Plastics Recyclers Europe65% plastics recycling rate attainable by 2025 new study shows
  3. European Heart NetworkCommissioner Andriukaitis' Address to EHN on the Occasion of Its 25th Anniversary
  4. ACCACFOs Risk Losing Relevance If They Do Not Embrace Technology
  5. UNICEFMake the Digital World Safer for Children & Increase Access for the Most Disadvantaged
  6. European Jewish CongressWelcomes Recognition of Jerusalem as the Capital of Israel and Calls on EU States to Follow Suit
  7. Mission of China to the EUChina and EU Boost Innovation Cooperation Under Horizon 2020
  8. European Gaming & Betting AssociationJuncker’s "Political" Commission Leaves Gambling Reforms to the Court
  9. AJC Transatlantic InstituteAJC Applauds U.S. Recognition of Jerusalem as Israel’s Capital City
  10. EU2017EEEU Telecom Ministers Reached an Agreement on the 5G Roadmap
  11. European Friends of ArmeniaEU-Armenia Relations in the CEPA Era: What's Next?
  12. Mission of China to the EU16+1 Cooperation Injects New Vigour Into China-EU Ties

Latest News

  1. Catalonia, Brexit, and Uber on EU agenda This WEEK
  2. Macron and Merkel take tough line on Poland
  3. Eurozone future needs structural reforms, EU leaders told
  4. Showdown EU vote on asylum looking likely for next June
  5. EU stresses unity as it launches next phase of Brexit talks
  6. Polish PM ready for EU sanctions scrap
  7. Dutchman to lead powerful euro working group
  8. EU mulls post-Brexit balance of euro and non-eurozone states

Stakeholders' Highlights

  1. EPSUEU Blacklist of Tax Havens Is a Sham
  2. EU2017EERole of Culture in Building Cohesive Societies in Europe
  3. ILGA EuropeCongratulations to Austria - Court Overturns Barriers to Equal Marriage
  4. Centre Maurits CoppietersCelebrating Diversity, Citizenship and the European Project With Fundació Josep Irla
  5. European Healthy Lifestyle AllianceUnderstanding the Social Consequences of Obesity
  6. Union for the MediterraneanMediterranean Countries Commit to Strengthening Women's Role in Region
  7. Bio-Based IndustriesRegistration for BBI JU Stakeholder Forum about to close. Last chance to register!
  8. European Heart NetworkThe Time Is Ripe for Simplified Front-Of-Pack Nutrition Labelling
  9. Counter BalanceNew EU External Investment Plan Risks Sidelining Development Objectives
  10. EU2017EEEAS Calls for Eastern Partnership Countries to Enter EU Market Through Estonia
  11. Dialogue PlatformThe Turkey I No Longer Know
  12. World Vision7 Million Children at Risk in the DRC: Donor Meeting to Focus on Saving More Lives