EU gets more cautious on hitting third countries over Russia sanctions

The EU’s latest draft of new sanctions against Russia would make it more difficult than originally proposed to cut trade with third countries over busting existing restrictions, a document showed, after Berlin warned against targeting China.

The EU is working on what would be its 11th round of sanctions since Russia invaded Ukraine in February last year, this time focused on cracking down on those breaking trade curbs already in place.

To achieve that, the EU’s executive European Commission proposed for the first time a new tool to limit trade with third countries deemed involved in bypassing sanctions after the bloc identified states in the Caucasus and central Asia as possible culprits.

During a first discussion on the proposal among the 27 EU countries last week, Germany was a leading voice in warning against any possible future restrictions in trade with China.

The document, an update from the Commission that was seen by Reuters, takes that into account and was discussed by 27 EU member states’ envoys to Brussels on Tuesday.

Compared with the original proposal, it would make sanctioning third countries more difficult, with a new clause added saying that before making any such proposal, “alternative measures” should be considered, such as individual listings.

EYES ON G7

The necessary approval by all the 27 EU countries is not expected until after the G7 summit of the world’s most industrialised countries in Hiroshima this Friday and Saturday.

The proposal includes dozens of Russian companies, entities and individuals to be blacklisted including the Russian defence ministry, the SVR foreign intelligence, defence giant Rostec, associates of arms exporter Rosoboronexport and the Wagner mercenary force, as well as Positive Group POSI.MM listed on the Moscow stock exchange.

In a first, it includes eight companies in China, as well as eight in Iran, two in Uzbekistan and one each in Syria, Armenia and the United Arab Emirates.

Beyond concerns raised by Germany, shipping countries including Malta asked for clarifications around restricting access to ports for vessels deemed busting G7 restrictions on trade in Russian oil.

A senior diplomat from an EU country hawkish on Russia said this week there were no major controversies around the proposal: “We kind of already have a deal. We’ll get it done very soon.”

Others, however, have said the package needed more time, pointing to a summit of EU leaders due at the end of June.