On June 21, European Union (EU) countries officially approved the 11th package of sanctions against Russia, determined to prevent previously imposed sanctions from being "ignored" by third countries.
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| 11th package of sanctions against Moscow: EU officially 'declares war' on a third party, determined to block the lifeline of the Russian economy? (Source: Ukrinform) |
EU's last resort?
Accordingly, the new sanctions set limits on the import of goods if there is suspicion that vessels are transporting Russian crude oil or derivatives purchased above the maximum price agreed by Australia, Canada, Japan, the United Kingdom and the United States.
"I welcome the political agreement on our 11th package of sanctions," European Commission President Ursula von der Leyen said, adding that the new sanctions would deal "a new blow" to the Russian economy's revenue. She also made clear that the EU's "anti-circumvention" tool would prevent Russia from obtaining sanctioned goods by imposing tighter restrictions on exports.
To mitigate the risk of sanctions evasion, the 11th package includes prohibitions on the transit of goods and technology through Russian territory that could contribute to Moscow's technological and military advancement or the development of its defense and security sectors. Furthermore, the new package includes the possibility of new special measures as a "last resort" to prevent the sale, supply, transfer or export of sensitive dual-use goods and technology to third countries that are at risk of continued exploitation and/or sanctions evasion."
The 11th package of EU sanctions also extends the suspension of broadcasting licenses in the EU to five Russian media outlets. Another agreed measure is to ban ships from engaging in transit when authorities have “reasonable grounds” to suspect they are violating the ban on imports of Russian crude oil and petroleum products into the EU.
The 11th package of sanctions also expands the “black list”, adding new criteria, this time including 71 Russian individuals and 33 organizations. Assets held by these individuals and organizations in the EU will be frozen.
New difference, more difference?
Scholar Norma Masci, a political research expert at geopolitica.info , said that, if placed next to the sanctions imposed on Russia by the US, Brussels' latest move seems milder than the hypothesis of a complete embargo put forward by the administration of President Joe Biden.
The US has placed restrictions on a number of companies, mostly Chinese, involved in “triangular relationships” that allow Russia to obtain a supply of potential Western technologies that can have both civilian and military uses.
The 11th round of sanctions is expected to expand the list of entities to include companies, mostly Chinese, that supply Russia with dual-use technology and materials. The measures being considered by European institutions follow those already adopted by the US administration and target a number of Chinese-based semiconductor companies such as 3Hc Semiconductors, King-Pai Technology, Sinno Electronics and Sigma Technology. The basic accusation against these companies is that they have continued to supply Russia with electronic components necessary for its military operations.
However, it is not only Chinese companies that have fallen into the crosshairs of Washington and Brussels, but also some Western technology importers based in third countries that have re-exported a significant portion of those goods to Russia.
The increased trade interactions between some EU countries and some non-EU countries such as Serbia, Armenia... together with the simultaneous increase in exports of dual-use technology to Russia from the above-mentioned countries, have led the EU to hypothesize the existence of systematic trade activities aimed at circumventing sanctions.
Several Central Asian countries that were once part of the Soviet Union, such as Kazakhstan or Kyrgyzstan, are also involved in these “triangles,” according to European officials. Similarly, EU countries have imported large amounts of refined petroleum products over the past year from China, the United Arab Emirates (UAE) and India.
The idea of sanctions against economic actors suspected of evading Western sanctions is a subject of wide debate, as member states and regulators differ on the timing and method of implementation. While on the one hand countries such as Poland and the Baltic republics are pushing for swift new sanctions against those who circumvent existing trade with Moscow, on the other hand some Western European countries are advocating a more cautious approach.
If sanctions are imposed aggressively, there will be serious economic and strategic consequences, especially for EU countries, which could face a range of Chinese sanctions that could impact their value chains and impact EU industries.
On the US side, concrete measures such as the Inflation Reduction Act (IRA) have begun to secure the country’s strategic industries, helping to reduce its dependence on Chinese materials and components. This reorganization is taking place in parallel with economic and strategic cooperation initiatives implemented by the White House to direct US investments to countries with geostrategic positions that are considered to balance the US and China.
Among the politically motivated trade initiatives promoted by the US in recent years are the "Indo-Pacific Economic Framework for Prosperity" launched in 2022 by Washington with 12 countries of the Indo-Pacific region and open to other members, the Build Back Better World (B3W) strategy, focusing on strategic infrastructure and launched in 2021 as a US response to China's "Belt and Road" initiative (BRI).
The Free and Open Indo-Pacific strategy, on the other hand, has a different dimension, clearly focused on protecting and securing the Indo-Pacific trade routes, allowing Western industries to operate on a global scale.
Faced with an increasingly cohesive Sino-Russian bloc with a common interest in challenging Euro-American hegemony, Washington and Brussels appear increasingly inclined to deploy the “weapon” of economic coercion.
However, clear differences between the two sides of the Atlantic remain, with the US intent on increasing pressure on the Sino-Russian bloc, but Europe still fearful of the uncertain effects of such sanctions.
Ultimately, neither the sanctions imposed so far, nor those under discussion, have formally targeted products such as fertilizers or diamonds, and the EU appears to have been “powerless” to stop the refined oil “triangles” that still flow through China and India – which are one of Russia’s most important sources of revenue.
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