EU's New Russia Sanctions Package Lowers Price Cap, Targets Sanctions Evaders
The latest EU sanctions package against Russia, adopted last week, lowers the price cap on Russian oil, introduces more import and export restrictions and designates a range of vessels and companies helping Russia move energy products and evade sanctions.
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The package notably lowers the price cap on Russian crude oil to $47.60 more than two years after the Group of Seven nations and other countries originally agreed to a $60 cap (see 2212050014). The EU also introduced a new “automatic and dynamic mechanism” to allow the bloc to continually review the cap, which will help ensure it’s “always 15% lower than the average market price for Urals crude in the previous period of six months, resulting in both predictability for operators and downward pressure on Russian energy revenues.”
The EU sanctioned an additional 105 vessels for being part of the shadow fleet helping Moscow circumvent sanctions, along with a host of Russian and international companies managing those vessels and trading in Russian oil, including an Indian refinery that the EU said is a “major customer” of Russian oil. An import ban will apply to refined oil products “derived from Russian crude,” including those that are processed abroad before being delivered to the EU.
The bloc also removed sanctions on three liquified natural gas tankers after they committed to no longer transport Russian energy.
The package includes a range of other financial and trade restrictions, including the designation of 22 Russian banks and a “full transaction ban” on carrying out “specialised financial messaging services” with certain Russian banks. EU companies are also banned from carrying out transactions with third-country financial operators, including crypto firms, that help Russia evade sanctions or that are “connected to Russia's financial messaging service.”
In addition, the EU announced a new transaction ban against the Russian Direct Investment Fund and its subsidiaries or any financial institutions supporting them; a ban on the provision of certain banking software to the Russian government and Russian companies; and new export restrictions on “advanced technologies" that it said represented nearly $2.5 billion worth of exports last year.
The bloc sanctioned 26 entities for supporting Russia's military-industrial complex or evading sanctions, including 15 in Russia, seven in mainland China and Hong Kong, and four in Turkey. The EU also announced a new “catch-all provision to address the risk of circumvention via third countries of exports of advanced technology items. This will provide Member States with an additional tool to stop and investigate suspicious shipments and prevent the circumvention of sanctions.”
The package includes 55 other designations against entities with ties to Russian military supply chains, including companies in China supplying Russia with battlefield goods, as well as eight companies operating in the Belarusian military industrial complex. The EU is also banning arms procurement from Belarus, adding a Belarus-related catch-all provision for advanced technology items, and more.