Poland seeks new EU sanctions against Russian Gazprombank in the 11th package

In upcoming penalties, Poland is aiming for an EU hitting on Russia’s major gas bank, oil pipeline, and diamonds.

According to a joint proposal from Poland and the Baltic states, “the de-SWIFTing of Gazprombank is of priority and symbolic importance given the bank’s role in the Russian establishment’s scheme to embezzle state money and the Kremlin’s use of the bank to advance political interests”, as reported by EUObserver.

Excluding Gazprombank from SWIFT will impact Russia’s gas exports

Third-largest lender in Russia, Gazprombank, manages foreign payments for gas exports. 

Despite the war, the EU purchased 22 bcm of liquid gas and 61 bcm of Russian pipeline gas last year.

EU nations would have to reroute payments through alternate operators, such as SPFS (operated by the Russian central bank) or CIPS (managed by China) if Gazprombank were excluded from SWIFT.

Poland and the Baltic states stated that if that was “unacceptable,” then “as a minimum option, the freezing of the bank’s assets should therefore be considered.”

And looking ahead, “a logical step is to introduce sanctions on gas imports from Russia, notably in liquefied form,” they continued.

Out of the 50 or so Russian banks that make up its significant lenders, the EU has already de-SWIFTEed ten of them, including its two largest, Sberbank and VTB Bank.

The proposal stated that “in addition to shutting down SWIFT, the EU should freeze the assets of as many Russian banks, financial institutions, and their affiliates as possible.”

“Failure to freeze the funds of banks and financial institutions implies that even if banks are completely cut off from SWIFT, it will be possible to transact with them by other means,” they said.

The proposal includes an EU ban on Druzhba oil pipeline and Russian diamond

The proposal for the 11th package of sanctions against Russia for its war in Ukraine listed the blocking of the Druzhba oil pipeline and diamond exports to Belgium as “priorities”.

Russia continues to use Druzhba to pump oil to the Czech Republic, Germany, Hungary, and Slovakia. The proposal stated that anybody impacted by an EU ban on Druzhba could receive “compensatory mechanisms”.

The Kremlin receives upwards of 4 billion in revenue from diamond sales every year, mainly from India, the UAE, and Belgium. Given that the EU gets 41% of all Russian diamond exports, such sanctions would likely significantly impact Russia.

Talks on the 11th round of EU sanctions against Russia

Although talks on the 11th round of sanctions against Russia are already underway in Brussels, a decision will have yet to be made by the time EU foreign ministers gather in Luxembourg the following week.

Since the outbreak of the Russia-Ukraine war, Poland and the Baltic States have had a more significant say in how the EU interacts with Russia. However, it is too early in the negotiations to predict whether those who would be directly impacted by their ideas, like Belgium and Hungary, will renounce their concerns.

Over 1,600 Russian people and organizations have had their assets frozen and their visas banned due to their invasion of Ukraine, according to the EU.

For the Poles and Balts, however, the legal reach of the measures ought to be expanded to address the other side of the conflict, which is Russian President Vladimir Putin’s “growing war authoritarianism and unprecedented crackdown on any form of opposition” in Russia.

The joint proposal was made public the day after Russia’s politically driven court condemned crippled dissident Vladimir Kara-Murza to 25 years of hard labor in a prison camp. Vladimir Kara-Murza will now serve a prison sentence for his anti-war and pro-truth activity in Russia.