Monday

16th Jul 2018

EU approves economic sanctions on Russia

  • EU sanctions target oil exploration in Russia, but not its gas sector (Photo: eni.com)

EU ambassadors on Tuesday (29 July) approved economic sanctions on Russia which are expected to enter into force on Friday.

Under the new regime, known as stage three sanctions, EU citizens and firms will not be allowed to buy or sell debt, equity or other financial instruments issued by Russian state-owned banks with a maturity of over 90 days.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... our join as a group

An arms embargo will also come into force ,applying to all weapons on the EU common military list. It will not be enforced retroactively.

The export of so-called dual use items - goods which can have both civilian and military use - will be banned only for "military end users" as opposed to a general ban for civilian firms too, as envisaged initially.

Russia will also have restrictions on importing oil exploration technologies from Europe. But its much larger gas sector will be spared.

EU ambassadors also added eight individuals and three entities to an existing blacklist of 87 individuals and 20 organisations. Four of the new names are expected to be “cronies”, close to Russian President Vladimir Putin. The names will be published in the EU official journal on Wednesday.

Even if the sanctions are slightly watered down compared to the initial EU commission proposal, they mark a new departure. Just two weeks ago, diplomats were joking that member states would never go to stage three, rather to "2.999".

But the downing on 17 July of the Malaysia Airlines passenger plane, which killed 298 people, mostly EU citizens, changed the mood. Pro-Russia separatists in eastern Ukraine are believed to have accidentally shot down the plane with a missile system supplied by Russia.

Key to Tuesday’s agreement was for all countries to take a more or less even hit, as Russia is expected to retaliate against the EU after the sanctions kick in.

According to an International Monetary Fund report published earlier this month, "Cyprus, Austria, and Hungary are most exposed to the Russian banking system, with total asset of their subsidiaries in Russia of about 4-10 percent of national GDP".

France on the other hand got its way with the arms embargo not applying to its €1.2bn sale of two Mistral warships to Russia, as the ban will only apply to future, not old contracts. France was supported by some eastern member states who were concerned that they won't be able to get spare parts for their Soviet-era planes and equipment.

Lithuanian President Dalia Grybauskaite, however, did not hide her disappointment on this point. "Welcome EU decision on a wide range of sanctions on Russia. Unfortunately nothing to stop the deal of Mistral yet," she tweeted.

”Strong warning”

A statement by the European Council and European Commission said the sanctions were meant as a “strong warning” to Russia.

"Illegal annexation of territory and deliberate destabilisation of a neighbouring sovereign country cannot be accepted in 21st century Europe. Furthermore, when the violence created spirals out of control and leads to the killing of almost 300 innocent civilians in their flight from the Netherlands to Malaysia, the situation requires urgent and determined response," the statement reads.

"The European Union will fulfil its obligations to protect and ensure the security of its citizens. And the European Union will stand by its neighbours and partners," it adds.

The statement also criticises Putin for not delivering on promises made to EU leaders to work towards a peaceful solution in Ukraine and warns him not to destabilise other neighbouring states.

If the destabilisation of Ukraine continues "or of any other eastern European neighbouring state" - a reference to Moldova and Georgia - Russia will be further isolated and its economy hurt even more.

However member states also indicated that they are ready to reverse the sanctions if Moscow is cooperative.

"The European Union remains ready to reverse its decisions and re-engage with Russia when it starts contributing actively and without ambiguities to finding a solution to the Ukrainian crisis," it concludes.

An EU official on Tuesday evening explained that the sanctions regime will be under "constant review" and could be rolled back at any time if Russia changes course. They can also be adjusted if Russia circumvents the embargoes and buys the banned items elsewhere or if the impact on EU economies is too hurtful.

Obama, EU leaders agree on Russia sanctions

The leaders of Britain, France, Germany, Italy and the US held a conference call on Monday and agreed to impose economic sanctions on Russia as it continues to support the war in eastern Ukraine.

US joins EU on Russia economic sanctions

The US on Tuesday announced a widening of its own Russia sanctions to match the EU's economic sanctions adopted just a few hours previously.

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.

Opinion

How the World Cup exposed Russian chauvinism

The suggestion that Russians themselves play a role in the condition of their state today is often dismissed as "xenophobic" or "Russophobic". But if not addressed, the evils of nationalism, chauvinism, and imperialism will continue even after Putin is gone.

Opinion

Will EU suspend trade deal with Cambodia?

The EU has been slow to react to the collapse of Cambodian democracy - but if it ever chooses to use it, Brussels has substantial influence and leverage over Cambodia.

News in Brief

  1. EU opens case on Siemens' Alstom buyout
  2. Trump: May found my Brexit advice 'too brutal'
  3. Italy will reject EU-Canada trade deal, says deputy PM
  4. Commission: Juncker suffered from sciatica attack at Nato
  5. EU free wifi plan struck by IT error
  6. Europol launches 'World Cup game' to catch criminals
  7. Germany's Gabriel urges tougher dealing with Trump
  8. Eurozone to give Greece last bailout loan in August

Stakeholders' Highlights

  1. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  2. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  3. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  4. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  5. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  6. Mission of China to the EUChina: Work Together for a Better Globalisation
  7. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  8. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  9. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  10. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  11. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  12. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs

Stakeholders' Highlights

  1. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  2. FIFAGreen Stadiums at the 2018 Fifa World Cup
  3. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development
  4. Counter BalanceEuropean Ombudsman Requests More Lending Transparency from European Investment Bank
  5. FIFARecycling at the FIFA World Cup in Russia
  6. Nordic Council of MinistersOECD Report: Gender Equality Boosts GDP Growth in Nordic Region
  7. Centre Maurits Coppieters“Peace and Reconciliation Is a Process That Takes Decades” Dr. Anthony Soares on #Brexit and Northern Ireland
  8. Mission of China to the EUMEPs Positive on China’s New Measures of Opening Up
  9. Macedonian Human Rights MovementOld White Men are Destroying Macedonia by Romanticizing Greece
  10. Counter BalanceControversial EIB-Backed Project Under Fire at European Parliament
  11. Nordic Council of MinistersIncome Inequality Increasing in Nordic Countries
  12. European Jewish CongressEU Leaders to Cease Contact with Mahmoud Abbas Until He Apologizes for Antisemitic Comments

Join EUobserver

Support quality EU news

Join us