With ten consecutive rounds of sanctions imposed on Russia in the year since its invasion of Ukraine, the EU is in its worst punitive campaign against a foreign country since its creation. Brussels says the sanctions are aimed at reducing Moscow’s revenues and its access to key technologies.
However, according to the European Parliament, the impact of the sanctions “is not severe enough to limit Russia’s ability to wage war in Ukraine.”
Indeed, trade between the 27 EU member states and Russia continues as a result of intense lobbying, the EU’s reluctance to take a more serious economic hit and concerns about the impact on global supply chains.
And instead of imposing new sanctions, the EU now intends to focus on compliance with those already announced by “weak links” such as the UAE, Turkey, Armenia, Georgia, Kazakhstan and Kyrgyzstan.
Reuters summarizes the sectors in which trade between the EU and Russia more or less continues.
Trade flows
In 2021, Russia was the EU’s fifth largest trading partner, with turnover reaching 258 billion euros, according to data from the European Commission. The EU mainly imported fuels, wood, iron, steel and fertilizers.
Since the invasion of Ukraine began in February 2022, the value of Russian imports into the EU has halved to around €10 billion in December.
In total, from March 2022 to the end of January 2023, the EU imported 171 billion euros worth of goods from Russia, according to Eurostat data.
This is well above the 60 billion that the EU claims to have allocated to Ukraine during the year. However, the amount does not include the cost of modern tanks, which are already beginning to arrive in the attacked country.
Natural gas
Last year, the EU imposed sanctions on coal and oil transported by sea from Russia. Natural gas is not subject to sanctions, but Moscow itself has halted most pipeline supplies. In 2022, the EU received about 40 percent less Russian gas than in previous years.
The picture is different for liquefied natural gas. Since the start of the war, supplies of such gas from Russia to the EU have increased to 22 bcm in 2022, up from 16 bcm. m in 2021
The volumes are still significantly smaller than pipeline deliveries, which reached 155 billion cubic meters per year before the war. But their growth has forced some member states to seek legal grounds for limiting them.
Nuclear power plants
The EU has not imposed restrictions on Russia’s nuclear industry either, and Hungary, where Rosatom is about to expand the Paks nuclear power plant, and Bulgaria openly oppose such sanctions.
Imports of products of the Russian nuclear industry to the EU in 2022 amount to 750 million euros, according to Eurostat data. According to Euroatom, Russia supplied about a fifth of the uranium used in the EU in 2021.
However, France’s energy ministry disputed a recently released Greenpeace report that said Paris had sharply increased its imports of enriched uranium from Russia since the start of the war. France, however, admitted that suspending existing contracts with Moscow would be more expensive than terminating them.
Diamonds
Last year, the EU bought about 1.4 billion euros worth of diamonds from Russia, with neither the import of precious stones banned nor the state-owned company Alrosa placed under sanctions.
Belgium, home to the world’s largest diamond market, Antwerp, has openly lobbied that the EU does not need to impose sanctions on Russian diamonds on its own.
The EU, the US and the G-7 countries are currently developing a diamond tracking system to control the Russian trade in them. According to the World Diamond Trade Center in Antwerp, it must include India to be effective.
Chemicals and raw materials
Fertilizer imports from Russia to the EU last year totaled 2.6 billion euros, or 40 percent more than in 2021, as rising prices offset falling volumes, Eurostat said.
Potassium carbonate, also known as potash, from Russia and Belarus is heavily restricted or even banned in the EU, but other fertilisers, such as nitrogen compounds, are not subject to sanctions, says Sean Meckle of Fertilizers Europe. .
Among the raw materials that are not subject to sanctions is nickel, mainly used in steel production. In 2022, the EU imported Russian nickel worth a total of around 3.2 billion euros, according to Eurostat data.
Big names, secondary sanctions
“Alrosa” and “Rosatom” are missing from the EU’s blacklist, which currently includes about 1,700 companies and individuals whose access to the Community is prohibited. It also does not include Gazprombank, the financial wing of the monopoly Gazprom, as well as Russia’s second largest oil producer, Lukoil.
Transparency International has long called for Russia’s access to EU lobbying to be cut off and for secondary sanctions to be imposed on those who help those sanctioned to circumvent the restrictions. A similar measure has long been in place in the US.
(BTA, Svetoslav Stefanov)
