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| 11th package of sanctions against Russia: Europe admits the truth, speaks 'bitterly' about the goal of internal rectification. (Source: Pemedianetwork) |
High Representative of the European Union (EU) for Foreign Affairs and Security Policy and Vice President of the European Commission (EC) Josep Borrell clarified the scope of sanctions against Russia and the EU's objectives, including mentioning the subjects to whom restrictive measures should be implemented.
Not "sanctions"
“Russia is at the heart of our containment strategy, aimed at putting pressure on them to end their military campaign in Ukraine,” Josep Borrell affirmed, clarifying that the term “European sanctions against Russia” is not the correct term, but rather “restrictive measures.”
Accordingly, the EU’s restrictive measures against Russia do not have an extraterritorial effect, meaning they only apply to European entities. But the reality is that these restrictions are being “broken” and undermined not only by external actors. And so, the current debate within the EU on the 11th package of sanctions against Russia is about what measures Europe should continue to take in the meantime.
“As an EU member, we do not want to buy Russian energy exports, because we do not want to finance Moscow’s military campaign in Ukraine. We also do not want to sell Russia the technology and components that Russia needs for its military operations,” Borrell said, adding that the restrictions are intended to bind economic operators within the EU.
Of course, on a broader scale, “even if we wanted other countries to do the same, we could not force them, because our ‘sanctions’ do not have an extra-EU scope,” the EC Vice President said of the desire.
Mr Josep did not mean to accuse, but he did warn non-EU entities that their attempts to circumvent the restrictive measures against Russia were a delicate matter. Europe has been careful to avoid antagonising countries that are not covered by European law.
In fact, the European restrictions have had a general effect. For example, the EU has virtually stopped buying oil and gas directly from Russia, gradually ending its energy dependence. And the EU has also stopped exporting many important goods and materials to Russia.
However, recent months have seen an unusual increase in third-country imports of goods currently banned by the EU, including high-tech goods. For example, EU car exports to Russia are reported to have fallen by 78% in 2022, while EU exports to Kazakhstan have increased by 268%.
EU member states are currently discussing the 11th package of sanctions against Russia, essentially to plug loopholes, to find the best way to eliminate circumvention and diversion of trade in banned products.
The proposals under discussion would be among other deterrent measures that would allow action against entities that deliberately circumvent EU measures, said Josep Borrell, but the bloc would still maintain its principle of not imposing sanctions on entities outside its borders.
For example, the EU has also discussed a specific case, which is that India is buying more oil from Russia, but at the same time is also exporting more petroleum products to the EU, in which refined products are very likely to be produced from cheap Russian oil.
In fact, India, like China, is importing larger volumes of Russian oil than ever before since the G7 introduced a price cap at the end of 2022. They have the right to do so because the discount is quite “fat”.
The figures show that India’s oil imports from Russia increased from 1.7 million barrels per month in January 2022 to 63.3 million barrels per month in April 2023. In other words, before Russia launched its military campaign in Ukraine, the share of Russian oil in India’s total oil imports was 0.2%, but that share increased to 36.4%, as recorded last month.
On this, EC Vice President Josep Borrell pointed out frankly, this is certainly a notable increase, but we must be clear. “One cannot blame or question India’s right to do so, because Indian buyers are not subject to European law,” Josep said.
Looking at the issue more optimistically, Mr. Borrell said that the G7 energy price cap is aimed at reducing Russia’s oil revenues and, with it, limiting the Kremlin’s financial means to finance its military campaign. “But as I said, it is normal for India to buy oil from Russia. And if, thanks to our energy restrictions, India can buy oil at a much cheaper price, then Russia’s revenues will also be significantly reduced.”
Internal "rectification" goal?
The issue being debated now is more about what needs to be done next and by whom?
Another undeniable fact is that India is increasingly exporting refined petroleum products, based on Russian oil. The EU wants to prevent the import of such products.
Here again the numbers are clear, exports of refined products such as jet fuel or diesel from India to the EU have increased from 1.1 million barrels in January 2022 to 7.4 million barrels in April 2023. Logically, the EU is worried about this.
Previously, Mr. Oleg Ustenko, economic advisor to Ukrainian President Volodymyr Zelenskyy, was also right when he said that they have enough evidence to show that some international companies are buying refined oil products originating from Russian oil and reselling them to Europe...
But, again, it is not India that is to blame. Once the oil is refined, the final products are no longer considered Russian, but Indian. We cannot prevent Indian refineries from selling them to an EU operator or to an intermediary. That is perfectly legal.
It is clear that in practical terms this undermines the effectiveness of our restrictive measures. We in the EU do not buy Russian oil, but we buy diesel refined from Russian oil and from another partner. “This breaks the EU sanctions. Member states should fully implement the sanctions against Russia to achieve their objectives,” Josep Borrell said.
But in the end, who will be responsible for this – the seller or the buyer?
"When I raise the issue of India exporting refined products based on cheaper Russian oil, it is not to criticize India but to say that we cannot turn a blind eye to the way EU companies circumvent sanctions - buying refined oil from India," the EC Vice President stressed.
Finally, according to Josep Borrell, this real-life story shows that we must first look specifically at what economic operators within the EU are doing. "If Indian refineries are selling, it is because European companies are buying, directly or through intermediaries. We should be aware of how complicated real life is and try to find solutions on that basis."
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