EU Introduces Sanctions on Russian Gas for the First Time

by Roman Cheplyk
Thursday, June 20, 2024
EU Introduces Sanctions on Russian Gas for the First Time

The European Union has approved a new package of sanctions against Russia, marking the first time that measures will target Russian gas

This significant development, reported by Bloomberg, reflects the EU's ongoing response to Russia's actions against Ukraine.

Key Sanctions and Measures

The 14th sanctions package since the onset of the full-scale Russian invasion includes a variety of stringent measures aimed at curtailing Russia's economic capabilities and preventing the circumvention of previous restrictions. The main points of this package are:

  1. Ban on Russian LNG Transshipment:

    • The EU will prohibit the transshipment of Russian liquefied natural gas (LNG) to third countries via its territory. This includes a ban on transshipment services, as well as ship-to-ship and ship-to-shore transshipments.
  2. Restrictions on New LNG Projects:

    • Investments, services, and goods for new LNG projects in Russia will be banned, aiming to stifle future energy developments.
  3. Sanctions on the "Shadow Fleet":

    • Sanctions will be imposed on a dozen vessels in Russia's so-called "shadow fleet," which are used to circumvent oil price caps and other trade measures.
  4. Ban on SPFS System Connections:

    • EU firms operating outside Russia are prohibited from directly connecting to Russia's central bank's Swift-equivalent SPFS system. Transactions with listed firms using this system to bypass sanctions will also be banned.
  5. Restrictions on Technology and Goods Trade:

    • EU operators are barred from entering agreements with listed banks facilitating the trade of technology and goods essential for weapon production.
  6. Expanded Trade Restrictions:

    • Trade restrictions will extend to dozens of new entities, including companies in China, Turkey, and India.
  7. Funding Restrictions:

    • Restrictions will be imposed on political parties, think tanks, and media providers accepting Russian funding.
  8. Enhanced Due Diligence:

    • EU companies will face stricter checks and due diligence requirements to prevent goods from being shipped to Russia via intermediaries.
  9. Export Controls:

    • New export controls will be placed on chemicals, manganese ore, plastics, electronics, and earth-moving equipment that could be used for military purposes. Additionally, there will be restrictions on helium imports.
  10. Transport and Intellectual Property Measures:

    • Measures will be strengthened regarding existing air and road transport restrictions. New controls will also be implemented on the registration of Russian intellectual property rights in the EU and the import of Ukrainian cultural values potentially looted by Russia.

Formal Adoption Process

The sanctions package now requires formal adoption by EU member states before it comes into force. The content may still change during this process as member states review and finalize the measures.

Context and Global Impact

This move comes amid increasing international pressure on Russia. Last week, the US Treasury Department announced sanctions against Russian LNG projects, targeting seven companies involved in projects such as Obsky LNG, Arctic LNG-1, and Arctic LNG-3.

The EU's new sanctions underscore the bloc's commitment to countering Russian aggression and supporting Ukraine through comprehensive economic measures. These sanctions aim to limit Russia's ability to fund its military operations and ensure compliance with international law.

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