Why EU is delaying approval of the 21st sanctions package and how the restrictions are hurting Russia
We are now in the final stretch of negotiations on the EU’s 21st sanctions package against Russia. It focuses on energy, financial services, cryptocurrency and trade. The package expands the blacklist of vessels belonging to Russia’s shadow fleet, targets dozens of banks and crypto companies in third countries that help Russians circumvent restrictions and blocks the export of substances and components used by Russia’s defence industry.
The overwhelming majority of the provisions of the 21st package have been fully agreed upon.
Read more about the final and most difficult obstacle on the way to approving the EU’s next sanctions package, as well as how Western sanctions are damaging the Russian economy, in the column by Vladyslav Vlasiuk, Ukraine’s Commissioner for Sanctions Policy: The 21st blow to Russia’s economy: how EU sanctions work and why they are so difficult to adopt.
The author points out that the most problematic element of the 21st sanctions package is the provision restricting the transportation of Russian liquefied natural gas (LNG) to third countries.
"This provision directly affects the interests of major shipping companies, which own large tanker fleets and earn money from transporting Russian energy resources," Vlasiuk explains.
According to him, Greece is trying to protect its commercial interests by negotiating for exemptions, transition periods or softer wording.
In response to this position, many other countries are asking a fair question: why should you be allowed to make money while we are not?
"Brussels is currently considering what to do. Not adopting the 21st package would be a catastrophe. Adopting it while satisfying Athens’ demands regarding the transportation of Russian LNG would cause dissatisfaction among almost everyone else," the columnist writes.
At the same time, Kyiv has a simple argument: the Kremlin’s oil and gas revenues are not abstract macroeconomic indicators or jobs – they are a direct conversion of European money into Russian missiles, drones and ammunition.
"There can be no other position than refusing to buy or transport Russian energy resources. This is the same fair approach for everyone," emphasises Ukraine’s Commissioner for Sanctions Policy.
According to the latest information, Vlasiuk adds, a compromise version of restrictions concerning Russian energy resources has been developed for the 21st sanctions package.
Regarding Russian LNG, this could involve allowing its transportation to third countries by a company if a three-party contract was signed before 2022. A six-month freeze on the maximum price for Russian oil is also being considered.
The author also reminds sceptics that sanctions pressure works like a chronic illness – the effect builds up gradually, but inevitably destroys the organism from within.
According to him, the situation in Russia’s domestic financial market has become so critical that the Russian Finance Ministry has been unable to hold federal bond auctions for four weeks in a row: investors are simply refusing to lend money to the aggressor state under current conditions.
In addition, Vlasiuk says that claims that pressure tools have been exhausted and that the West has reached the limit of its capabilities are a myth. There is still enormous room for further action. Work on the 22nd sanctions package has begun.