EU prepares 13th sanctions package against Russia, will it include aluminum ban?

On the eve of the second anniversary of Russia’s full-scale invasion of Ukraine, the European Union is preparing new sanctions against Russia and plans to provide Ukraine with financial support.

This is the 13th sanction package against Russia for its war aggression. The sanctions package will impose restrictions on companies and individuals, but it is unlikely to include an embargo on aluminum and nuclear fuel.

The Financial Times reported this, citing sources familiar with the EU negotiations. According to the publication, the new sanctions aim to add more individuals and legal entities to the blacklist, which includes asset freezes, bans on transactions, and travel.

The package includes the 13th set of restrictions for legal entities and individuals related to Russia’s war.

The EU plan also allocates 50 billion euros to Ukraine over the next four years, with the possibility of immediate disbursement after signing. Another 5 billion euros in military aid per year and a decision to postpone profits from Russia’s frozen assets are also part of the overall support package, the FT writes.

“It’s money, weapons, and sanctions at a time when we recognize that [Ukrainians] need support,” said one EU diplomat who was involved in negotiating the package.

“But after two years, we see that there are limits to what we can do,” he acknowledged.

Ukrainian officials have expressed concern about the waning of Western support in recent months as well as the risk of economic collapse and deterioration on the frontlines if key allies do not provide additional military aid.

“EU leaders failed to agree on four-year funding for Ukraine in December, and in Washington, Congress failed to give the green light to American military and financial aid for 2024. As a result, the Ukrainian armed forces began to reduce the use of ammunition at a time when Russia has stepped up its air attacks,” the publication recalled.

The new EU sanctions will focus on adding more individuals and entities to the asset freeze and travel ban list and are unlikely to include a ban on Russian aluminum imports, as demanded by Poland and the Baltic states.

Previous attempts by some states to target Russian exports of nuclear fuel and liquefied natural gas to the EU failed due to a lack of consensus, so softening other elements may also be necessary to gain support.

Member state leaders have yet to sign the €50 billion bailout proposed last year as part of the EU’s budget update at a meeting on February 1. Hungarian Prime Minister Viktor Orban blocked the deal in December, and now the European Commission is ready to make concessions to win him over, including giving him the opportunity to review the aid in the future.

But EU diplomats have expressed confidence that the Hungarian leader will eventually give in, as he has done in previous situations.

“If Orban disrupts [the EU budget replenishment], it will look like a political withdrawal from the union,” said a senior EU diplomat.

Once the leaders and the European Parliament sign the aid package, they may advance a portion of it to Ukraine, although the exact amount is still under discussion.

Negotiations are also underway to reform the so-called European Peace Fund, the fund that financed arms supplies to Ukraine.

The talks specifically focus on gradually phasing out reimbursements to countries for weapons they sent to Ukraine and replacing them with payments for joint weapons production.

Countries with large defense industries, such as Germany, want this phase-out to happen faster than countries without such industries.

The European Union’s assistance and sanctions against Russia have been a topic of discussion. In December 2023, Hungary’s controversial Prime Minister Viktor Orban vetoed €50 billion in aid to Ukraine from the European Union.

At the same time, the head of the Slovak government noted that Slovakia would support the European Commission’s proposal to create a €50 billion Ukraine Fund to support Ukraine in 2024–2027. New Slovak Prime Minister Robert Fico is known for pro-Russian statements, so Ukraine worried about his stance on this point.

POLITICO reported that the next package of EU sanctions against Russia may include an embargo on Russian aluminum products.

Russian aluminum products are among the goods targeted for the EU’s next sanction package on Russia, the media wrote, citing the diplomats.

The aluminum smelting process requires a huge amount of electricity, and energy prices account for up to 40% of production costs. Thus, sanctions against Russian aluminum are another way of sanctioning the Russian energy sector.

According to European Aluminium, a trade organization representing EU producers and advocating for stricter import restrictions on Russian suppliers, previous rounds of sanctions have left about 85% of Russian exports of the metal to the EU untouched.