New EU sanctions target 90 companies, including those from China – European Commission

President of the European Commission Ursula von der Leyen said that the new EU sanctions package against Russia contains restrictions against several foreign companies that help Moscow evade sanctions.

Ursula von der Leyen said this in an interview with the German broadcaster ZDF.

The President of the European Commission emphasized that the EU is serious about ending sanctions evasion by Russia.

“And that is why in the eleventh package of sanctions, we have more than 90 companies around the world for which we have clear evidence that they are violating sanctions, that is, supplying sanctioned goods directly to Russia from the European Union, bypassing third countries,” she said.

According to von der Leyen, “about eight” of these companies are registered in China.

“This does not mean that they have to be Chinese companies. These are companies that exist partly on paper and have owners who come from other countries. But they are registered in China, and we will be clear here,” Ursula von der Leyen explained.

As part of the draft of the new, eleventh package of sanctions, the EU, for the first time, proposed a new mechanism with third countries that are considered involved in circumventing sanctions against Russia by helping it import dual-use goods.

China’s Ministry of Foreign Affairs has previously opposed any sanctions that use Beijing’s relations with Moscow as a pretext to harm trade cooperation.

New EU sanctions will target states that help Russia evade them

The European Union is discussing the creation of a new system of sanctions against third parties that do not do enough to stop Russia from evading the existing sanctions, particularly those that are unable to explain the sudden rise in trade in essential products or technologies.

The sudden rise in trade in essential products or technologies might include, for example, microchips purchased in the West and transferred to Russia by entities in Armenia and Kazakhstan, which were caught in one of the latest investigations.

The primary objectives of the new instrument are to discourage nations from helping Russia and to block economic routes that Moscow may utilize.

If any nation fails to block shipments to Russia, the EU will have the chance to impose specific limits on significant goods as a next step.

The EU also wants to prohibit the transit of several products through Russia and broaden the scope of some existing export restrictions.

The most recent 11th package of EU sanctions against Russia unveiled in February, will focus on filling in the gaps in the existing measures and enhancing the bloc’s capacity to enact its limitations. This is in response to the fact that Moscow has thus far been successful in supplying several items for its war industry that are prohibited through third nations.

Instead, Russia keeps getting around sanctions to purchase vital materials for warfare.

The new system will grant the EU member states the power to compile two lists: one of the prohibited items and one of the third nations.

According to sources, member states will vote unanimously to decide which nations and products to add to the list if national governments accept the procedure.

These actions will mainly target Central Asian nations and Russia’s immediate neighbours, and they are unlikely to strike China at all.

Without it, the suggested package would make it simpler to apply sanctions on corporations operating in third countries while evading EU sanctions.

Additionally, the EU wants to broaden existing restrictions on automobiles, high-tech products, industrial goods, iron, steel, and processed goods made with prohibited metals. Intellectual property rights and licenses granted for the manufacture of certain products may also be subject to bans.

The new set of measures will also impose new restrictions on trailers to avoid Russian trucks attaching their cargo to EU trucks when they reach the bloc’s borders.

Along with guidelines on ship-to-ship transfers, the EU is also likely to clarify the rules governing the current prohibitions on entry into EU ports and bans on using port services.

The next EU sanctions package is expected to include sanctions against dozens more people and organizations. However, Rosatom, Russia’s state-owned nuclear energy industry, and nuclear fuel are not likely to be included due to a lack of agreement among the EU member states.

Read also: US warns European nations about Russian efforts to circumvent sanctions