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4th Feb 2023

Russian fertiliser kings to get EU sanctions relief

  • Dutch prime minister Mark Rutte greets press at the EU summit in Brussels on Thursday (Photo: consilium.europa.eu)
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Russia's fertiliser and chemicals barons will partly get off the hook on EU sanctions after a last-minute deal in Brussels on Thursday (15 December).

Fertiliser magnates Andrey Melnichenko and his wife Aleksandra, fertiliser tycoons Andrey Guryev and Moshe Kantor, chemicals mogul Dmitry Mazepin, and farming billionaire Vadim Moshkovich are all under existing EU asset-freezes and visa-bans for supporting Russia's war effort.

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  • Hungarian prime minister Viktor Orbán also wanted Russian names off the hook (Photo: consilium.europa.eu)

Kantor is also the former head of the European Jewish Congress, an NGO in Brussels.

Under Thursday's deal, individual EU countries will be free to unfreeze their money if it's "strictly necessary" to expedite shipments of food and fertiliser, especially to Africa.

But EU capitals will need to "consult" the EU Commission before they can go ahead.

And while the six Russians will still be the likely beneficiaries of any derogations, their names will not explicitly be referenced in a new EU fertiliser white-list, as in initial EU proposals.

The compromise followed 11th-hour ambassadors' talks in the margins of an EU summit in Brussels.

And it unlocked a wider deal on the ninth round of Russia sanctions, which are now due to enter into life at noon on Friday, shortly before EU leaders hold their post-summit press conferences.

Lithuania and Poland had threatened to delay everything if they were to be bullied into an EU27-wide unfreeze of the fertiliser kings' fortunes.

But EU heavyweights France, Germany, and the Netherlands, backed by Belgium, Italy, Portugal, and Spain, had pushed hard for a fertiliser thaw in the name of global food security.

"We cannot risk famine and food shortages over [EU] sanctions rules which are unworkable for port authorities," a diplomat from the pro-derogation camp told EUobserver.

Mazepin, the EU-blacklisted chemicals oligarch, said the same in an interview with the FT, the most influential media in Brussels, two days before the summit.

"We can't even pay for transportation when the cargo is humanitarian and is being presented free of charge to Africa. The banks do not accept our payment," he said.

Lithuania and Poland had earlier warned that the fertiliser move would drive a coach and horses through the EU sanctions regime.

"If a political loophole of this size was made, backed by all EU countries, I think it would be used to ... circumvent the sanctions," Lithuanian foreign minister Gabrielius Landsbergis told press in the run-up to the EU summit.

Russian fertiliser exports in 2021 accounted for just 6.5 percent of the global market, giving the lie to Moscow's claims of systemic importance, Lithuania had calculated.

And Russian propaganda would exploit the EU's U-turn on Mazepin et al, Lithuania and Poland had said, to claim that Western sanctions were making people starve, instead of the real reason — Russia's own invasion of Ukraine.

The fertiliser unfreeze represents the first significant loosening of the EU sanctions regime since Russia invaded in February.

It comes amid Russian air strikes on Ukrainian people's heating and water supplies in winter weather, opening Europe to criticism on moral grounds.

But Thursday's compromise also set in motion the ninth package of EU sanctions, covering Russia's bank, mining, and media sectors, exports of dual-use technology, and almost 200 more individuals and entities.

Hungary

For its part, the for-ever Russia-friendly Hungary had insisted on striking three individuals' names off the ninth blacklist — Russia's energy, health, and sports ministers, EU sources said.

It did so in a last-minute veto threat earlier dubbed "political corruption" by one EU diplomat.

It "sends a message to [Russian president Vladimir] Putin that even if you are on the blacklist, we can still save you," the EU diplomat said.

Hungary has, in the past, shielded Russian patriarch Kirill from being listed and boycotted an EU oil embargo on Russia.

But other EU states have also fought for national interests, such as Belgium, which talked the EU out of a Russia-diamond ban that would have cost thousands of jobs in its Antwerp diamond-trading centre.

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