This week the EU Commission announced (click here) the high-level scope of its proposed 19th package of sanctions against Russia.
The EU Commission plans to further tighten its sanctions on Russia given its ongoing escalation of hostilities in Ukraine as well as several incidents of the Russian military violating EU airspace. The proposals primarily target Russia’s energy sector but also aim at several banks and on the technology and hardware sectors that are useful to the Russian military, particularly drone technology. The tightening of sanctions comes hot on the heels of the 18th package passed in July which saw, amongst other things, the Oil Price Cap tightened (click here). Many of the details of the Commission’s latest announcement are contained in this statement from the High Representative/Vice-President Kallas.
Regarding the energy sector sanctions, the Commission builds on its June proposal (click here) to halt all Russian gas imports into the EU. It plans a full prohibition of Russian LNG imports by January 2027. It also proposes adding an additional 118 vessels to the banned shadow fleet list bringing the total vessels falling under the EU ban to 560. Further, the Commission's proposal calls for the lifting of all remaining sanctions exemptions on Rosneft and Gazprom Neft, meaning a total ban on any and all transactions with them. They also plan on bringing other companies under an asset freeze including refineries, oil traders and petrochemical companies in third countries, including China.
For the remaining sectors, the Commission proposes a full transaction ban on Russian banks and financial institutions, including those operating in third countries. This includes restrictive measures on payments and crypto platforms, and the prohibition of transactions in cryptocurrencies. They propose adding 45 large economic operators across Russia and third countries involved in the circumvention of sanctions, revenue generation and support for the Russian military industry, as well as the Russian credit card system and fast payments system. In addition, it proposes a ban on investments in Russian Special Economic Zones linked to the Ukrainian war and further measures on Chinese entities supporting Russia's military industry.
The proposed sanctions will need unanimous approval from EU member states to pass into effect. Neither of the announcements has indicated a clear timetable although the 18th package took approximately five weeks to pass through the legislative process.