The 14th package of EU sanctions against the Russian Federation was agreed on June 24. It is designed to limit Russian influence on Europe and protect the interests of Ukraine. What exactly are the restrictions introduced by European countries and how will they be prevented from being circumvented, Told me Andriy Klymosyuk, head of projects of the analytical center "Institute of Legislative Ideas".
The key element of the package is the ban on the provision of transshipment services of Russian liquefied natural gas intended for transportation to third countries on the territory of the EU.
The ban also applies to ancillary services. Such a step should significantly limit the Russian Federation's access to world markets, reduce its profits from the sale of energy carriers, and deprive it of sources of funding for the war against Ukraine.
The package also includes a ban on the sale or transfer of Ukrainian cultural values, aimed at preserving the cultural heritage of Ukraine and preventing the illegal circulation of historical artifacts, in particular, those stolen from the occupied territories.
A complete ban on receiving funding from the Russian Federation is established for a wide range of organizations, including political parties, foundations, alliances, non-governmental organizations, including think tanks, and media service providers in the EU.
This ban covers both direct and indirect forms of financial support from the Russian Federation with the aim of blocking the financing of "puppet organizations" that spread pro-Russian narratives in the EU.
As expected, significant attention in the new EU sanctions package is devoted to strengthening control over compliance with sanctions and prevention of their circumvention. This especially applies to the issue of re-export of sanctioned goods to the Russian Federation through third countries.
The problem of bypassing EU sanctions through third countries
A serious challenge to the effectiveness of the EU's sanctions policy was the systematic circumvention of restrictions through third countries. As a result, last year, about 30 foreign microcircuits were found in Russian missiles manufactured after the embargo on technologies and military goods, in particular, from the countries that imposed these sanctions. Thus, bypassing these prohibitions not only figuratively, but also actually leads to the deaths of Ukrainians.
During January-October 2023, the Russian Federation imported military goods worth $8,77 billion, while the import of critical components reached $22,23 billion, despite sanctions bans. This indicates the existence of complex schemes for bypassing restrictions.
Already since the beginning of the full-scale invasion and the first EU sanctions packages, there has been an abnormal increase in exports from EU countries to states that do not support restrictions and did not impose sanctions on Russia, such as Kazakhstan, Uzbekistan, Georgia, Armenia, Turkey, etc.
For example, deliveries from Great Britain to Kyrgyzstan increased by more than 4000%, which indicates the use of these countries as transit points for further re-export to the Russian Federation.
This underlines the urgent need to strengthen control over international agreements and to eliminate existing gaps in the EU's sanctions policy to ensure its effectiveness.
What solutions does the 14th EU sanctions package offer?
An important component of the new package of sanctions is the expansion of the so-called "no Russia clause", which is enshrined in Article 12g of the Regulation. The mentioned provision is aimed at countering the circumvention of sanctions through third countries.
For the first time, such a clause was introduced by the 12th package of sanctions. It obliges EU suppliers and exporters to include clauses in contracts prohibiting the re-export of goods and provide for "adequate remedies" in the event of a breach.
This includes dual-use goods, advanced technologies, goods used in Russian military systems found on the battlefield in Ukraine or critical to their development, aviation goods and weapons.
In the 14th package, there is a ban on intellectual property rights and commercial secrets, which will take effect from the end of 2024.
Now EU operators are obliged to implement due diligence mechanisms aimed at identifying, evaluating and minimizing the risks of re-exporting goods to the Russian Federation. At the same time, EU member states are implementing a complex system of monitoring the fulfillment of new requirements, supervising compliance with rules and obligations to prevent re-exports.
It is important to note that the liability of EU companies now also extends to their subsidiaries in third countries.
These sanctions restrictions reinforce the Directive adopted in April, which criminalizes sanctions evasion.
Proper control of the authorized bodies on the implementation of re-export clauses has a significant potential, especially considering the real threat of receiving a multimillion-dollar fine or even imprisonment for several years.
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