The European Union (EU) has revealed that its latest sanctions package against Russia will cost an estimated €12.7 billion ($13.4 billion). The sanctions are a response to Moscow’s military activities in Ukraine, and were implemented on the one-year anniversary of Russia’s military operation in the country. This is the tenth round of sanctions imposed by the EU against Russia since 2014.
The new sanctions package is aimed at prohibiting exports of dual-use goods, including electronics, specialized vehicles, machine parts, spare parts for trucks and jet engines, and goods for the construction sector, worth €11.4 billion ($12 billion). This figure accounts for almost half (49%) of the EU’s exports in 2021. The package also includes a ban on Russian exports to the EU worth €1.3 billion ($1.37 billion) and accounts for 58% of the EU’s 2021 imports, including high-revenue goods such as bitumen, synthetic rubber, and carbon black. Synthetic rubber imports will be allowed in limited quantities until mid-2024, following lobbying by Italy, home to leading tire manufacturer Pirelli.
In addition to these measures, the new package broadens the scope of restrictions on Russia’s banking sector, with three large private lenders – Alfa-bank, Tinkoff, and Rosbank – being blacklisted. Russian residents are also banned from holding top positions at critical European infrastructure companies, and restrictions are placed on the provision of gas storage capacity to Russian entities, excluding liquefied natural gas (LNG).
Furthermore, the package requires European banks to report on funds belonging to Russia’s central bank and those linked to sanctioned Russian individuals and companies. These measures come amid ongoing tensions between the EU and Russia, with Moscow having annexed Crimea and been involved in the conflict in eastern Ukraine.
The latest EU sanctions package is aimed at targeting individuals and entities deemed to have played a role in the Ukraine crisis, rather than the Russian people as a whole. However, critics have argued that sanctions harm ordinary citizens and businesses, as well as the wider global economy. Russia has responded to the sanctions by imposing its own counter-sanctions on the EU, including banning certain imports and restricting foreign investment in some sectors.
The US has also imposed sanctions on Russia over the poisoning of opposition leader Alexei Navalny and alleged interference in the 2020 US presidential election. While both the EU and the US have imposed sanctions on Russia, their approaches have differed in some areas, such as the Nord Stream 2 gas pipeline from Russia to Germany, which the US opposes but the EU supports.
The latest EU sanctions package against Russia represents a significant increase in pressure on Moscow, with the measures targeting key areas such as exports of dual-use goods, banking, and infrastructure. However, the impact of sanctions on both sides remains controversial, and it remains to be seen whether they will lead to a resolution of the ongoing tensions between the EU and Russia.