Monday

23rd Oct 2017

EU sanctions add to Putin's Crimea headache

  • Almost 6 million tourist came to Crimea in 2013, compared to 2 million (80% of them Russian) this year (Photo: Michael Schwab)

The EU will, from Saturday (20 December), ban almost all forms of business co-operation with Crimea in a further blow to the Russian economy.

The new law - agreed on Thursday and seen by EUobserver - is designed to give teeth to EU non-recognition of Russia’s annexation of the Ukrainian region.

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.

It stops European entities from buying real estate, acquiring shares in Crimean firms, and providing loans or financial services.

It prohibits them “to sell, supply, transfer, or export goods and technology” in the transport, telecommunications, energy, and oil and gas exploration sectors.

It prevents provision of any EU services “directly relating to infrastructure … [and] tourism activities”, listing seven ports where EU cruise ships cannot call: Chernomorsk; Evpatoria; Kamysh-Burun; Kerch; Sevastopol; Theodosia; and Yalta.

It also lists 165 goods and products under embargo, hitting both industry and private consumers.

They include: salt; sulphur; iron; nickel; rock-drilling tools; steam turbines; fridges; washing machines; fork-lift trucks; machine parts; and office equipment.

They also include: radio and TV broadcasting equipment; light bulbs; trucks and vans; motorcycles; and liquid crystal devices.

The law contains exemptions to “minimise the effect … on the civilian population” and on EU businesses.

It doesn’t apply to contracts signed three months or more before 20 December or to Crimea-based firms’ operations outside the region.

Cruise ships can keep calling until 20 March.

Derogations also cover supplies to foreign consular missions, hospitals, and schools, as well as work to maintain “safety of existing infrastructure” or to protect “human health and safety … or the environment”.

The ban goes much further than previous Crimea sanctions in June and July.

Given Russia’s financial crisis and that it has to supply Crimea by sea, it's likely to make the region, which used to live on Ukrainian subsidies, into even more of an economic headache.

With Crimea’s maritime zone said to hold gas reserves, the ban on gas exploration technology will slow down efforts to cash in.

EU sources say France, which has the biggest commercial interests in Crimea, tried to water down the measures.

It said the ban should apply only to firms which are legally domiciled in the region. But the final text also embargoes “subsidiaries or affiliates under … control in Crimea”.

Against the grain

The new measures go against the grain of current EU thinking on the crisis.

EU leaders will take stock of Russia relations at a summit on Thursday.

Draft conclusions say if Russia continues to flout ceasefire accords “the EU will stay the course; the European Council is ready to take further steps”.

But German, French, Russian, and Ukrainian leaders in a phone call on Wednesday spoke of diplomatic solutions.

German chancellor Angela Merkel’s press release said she wants “good and co-operative relations” and "closer" trade ties with Moscow.

A senior EU diplomat told EUobserver “the mood has shifted” since she met Russian leader Vladimir Putin at a G20 event in Australia last month.

“I don’t have the feeling that there'll be a new wave of economic sanctions”, he said, referring to measures beyond Thursday’s Crimea decision.

Smallprint, big meaning

For her part, EU foreign affairs chief Federica Mogherini has called for a review of Russia sanctions in early 2015.

She has little power to shape policy. But the vocabulary of EU statements has changed since she arrived on 1 November.

Pre-Mogherini ones referred to Russian forces in Ukraine, but post-Mogherini ones call them “foreign forces” or “illegal forces” without naming Russia.

Ukraine’s ambassador to the EU, Kostiantyn Yelisieiev, recently urged EU states to call a spade a spade.

He wrote in a letter to EU ambassadors ahead of a Ukraine meeting on 15 December that the event “should not be an occasion for twisting language”.

He said “the word ‘aggression’ should not be avoided as it is an unfortunate reality" and that the EU should keep repeating that Crimea is “occupied” or “annexed" by Russia.

Mogherini’s 15 December statement mentioned the “illegal annexation of Crimea by the Russian Federation”.

But it didn't use the word “aggression” and spoke of “infiltration of illegal forces … from the territory of” Russia.

Opinion

Why does Putin want Crimea anyway?

Why is a world leader prepared to risk opprobrium and, possibly, crippling economic sanctions for an obscure piece of land?

Macron puts trade policy on summit table

France's president wants a "political discussion" on EU trade policies at Thursday's summit, amid domestic concerns over Canada and South America deals. But his colleagues are likely to avoid a lengthy debate.

EU gives thumbs up to US data pact

Commission gives 'thumbs-up' to controversial Privacy Shield deal with US on data sharing after a year's operation - but notes room for improvement.

News in Brief

  1. Rajoy to trigger Article 155 on Saturday in Catalan crisis
  2. EU conducts unannounced inspection of German car firm
  3. Lithuania calls for new EU energy laws
  4. EU leaders aim for December for defence cooperation
  5. Juncker says hands tied on Russia pipeline
  6. Czechs set to elect billionaire Andrej Babis
  7. Italian regions hold referendums on more autonomy
  8. EU leaders refuse to mediate Catalonia conflict

Stakeholders' Highlights

  1. Mission of China to the EUPresident Xi Jinping Proposes Stronger Global Security Governance at Interpol Assembly
  2. European Friends of ArmeniaEU Engagement Could Contribute to Lasting Peace in Nagorno-Karabakh
  3. UNICEFViolence in Myanmar Driving 12,000 Rohingya Refugee Children Into Bangladesh Every Week
  4. European Jewish CongressBulgaria Applauded for Adopting the Working Definition of Antisemitism
  5. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  6. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  7. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  8. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  9. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  10. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  11. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  12. CECEE-Privacy Regulation – Hands off M2M Communication!

Latest News

  1. The mysterious German behind Orban's Russian deals
  2. Mogherini urged to do more on Russian propaganda
  3. Turkey funding cuts signal EU mood shift
  4. Posted workers top EU agenda This Week
  5. Leaders lobby to host EU agencies at summit's margins
  6. Legal tweak could extend EU control on Russia pipeline
  7. Ukraine language law does not harm minorities
  8. EU begins preparations for Brexit trade talks

Stakeholders' Highlights

  1. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  2. EU2017EEEHealth: A Tool for More Equal Health
  3. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  4. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year
  5. ILGA-EuropeMass Detention of Azeri LGBTI People - the LGBTI Community Urgently Needs Your Support
  6. European Free AllianceCatalans Have Won the Right to Have an Independent State
  7. ECR GroupBrexit: Delaying the Start of Negotiations Is Not a Solution
  8. EU2017EEPM Ratas in Poland: "We Enjoy the Fruits of European Cooperation Thanks to Solidarity"
  9. Mission of China to the EUChina and UK Discuss Deepening of Global Comprehensive Strategic Partnership
  10. European Healthy Lifestyle AllianceEHLA Joins Commissioners Navracsics, Andriukaitis and Hogan at EU Week of Sport
  11. Nordic Council of MinistersNordic Council Representative Office Opens in Brussels to Foster Better Cooperation
  12. UNICEFSocial Protection in the Contexts of Fragility & Forced Displacement