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Why The EU Is Hesitant To Implement Its New Sanctions Framework

  • The EU has set up an anti-circumvention framework, theoretically enabling it to sanction third countries that facilitate trade with sanctioned nations like Russia, a move similar to the U.S.'s "secondary sanctions".
  • Despite evidence of some third countries aiding Russia, EU officials indicate that the framework is more of a last resort or a threat for diplomatic purposes, as the bloc does not want to push these countries closer to Russia and China.
  • The implementation of this framework faces hurdles such as Germany's and Italy's resistance and the necessity for unanimous agreement among all 27 EU member states, which seems difficult to achieve currently.
EU

When EU member states finally approved the bloc's latest sanctions package against Russia on June 23, perhaps the most interesting feature was a new anti-circumvention framework aimed at third countries. Although this framework for the moment very much remains an empty canvas, it has now given Brussels the legal tools to do two things: Draw up a list of products made in the bloc that it believes are being sent to Russia via third countries, and another register in which third countries can be named and hence will no longer be able to import things from the EU.

This move will, in theory, bring the EU closer to the "secondary sanctions" that the United States is already applying around the globe -- a framework designed to prevent or restrict third countries from trading with countries subject to U.S. sanctions. And there is little doubt that the new EU tool might come in handy going forward.

Estonia, Latvia, Lithuania, and Poland have all pointed out that, in 2022, exports of potential dual-use goods -- items that can be used for both civilian and military purposes -- to Kazakhstan, Kyrgyzstan, and Uzbekistan grew more than 62 percent, 83 percent, and 30 percent, respectively, compared to the previous year.

The EU’s sanctions implementation envoy, David O'Sullivan, has in recent months traveled extensively to both Central Asia and places such as Armenia and Georgia to hammer home the message that items, or parts of them, imported from the EU to other countries have been found in Russian military equipment and weapons used in its war against Ukraine. A senior EU official with knowledge of the matter, speaking under the condition of anonymity, noted that “we are seeing circumvention. Look at the envoy and where he is traveling. There is evidence that something is happening.”

Deep Background: The big question, however, is if the EU will ever use this instrument. The smart money is that it won’t, and that the lists will remain empty. Pretty much all of the EU officials I have spoken to essentially say the same thing: It is a last-resort measure, only to be used when all other things have failed -- notably, more intense diplomacy.

I hear that this is a tool designed for O’Sullivan to threaten the countries he travels to with, but nothing more. And people familiar with the topic also explain to me that Brussels isn’t at all keen to push countries into the arms of Russia and China. This is the sort of tool that would accomplish exactly that.

As evidence, they point to countries like Serbia and Georgia that, despite their refusal to align with EU sanctions on Moscow -- even to the point of allowing Russian flights to land on their soil -- still haven’t faced any negative consequences from Brussels for their actions.

Finally, there is the issue of unanimity, which is needed for any listing under this new framework. Right now, it is hard to see all 27 EU member states seeing eye to eye on this.

Drilling Down

  • One of the reasons for the skepticism is that Germany, backed notably by Italy, worked very hard to make the sanctions text on this issue longer and more complicated. Several EU officials familiar with the matter told me that Germany was even keen to remove the possibility of listing specific third countries, but that this was resisted by most other EU member states.
  • When the sanctions package with this proposal was first presented by the European Commission in early May, there were hopes in Brussels that it would be agreed on rather quickly, as it wasn’t the most comprehensive measures ever proposed by the EU. Yet it took nearly two months to reach an agreement, largely due to Berlin continuously insisting on various clarifications of the anti-circumvention language.
  • Having seen both the original text, as proposed by the European Commission, and the final version agreed by member states, it is clear just how difficult it will be to do anything with this anti-circumvention instrument. And it is obvious that the EU will first exhaust all diplomatic tools available before any restrictive measures are proposed.
  • Both documents spell out that “the [EU] recognizes the efforts made by national authorities in many third countries to stem the flow of goods, technology, and services that are covered by the restrictive measures adopted by the [EU] in response to Russia’s war of aggression against Ukraine. The [EU] should further support third countries in that endeavor” -- interestingly, the final agreed text adds “with all available means” at the end.
  • The adopted text also outlines other steps that first must be taken before a third country is targeted, which includes that the EU's foreign policy chief and the European Commission must brief the member states on all technical details and outreach actions taken before any proposal for sanctioning is to be submitted.
  • It is also stated that such info must include “available trade data demonstrating that the alternative measures taken have been ineffective, as well as information about the efforts carried out by the [EU] to address the matter with the third country in question, and a clear indication that such efforts were not successful.”
  • But that’s not all. Before a decision is taken, Brussels must also “inform and actively seek the views of the government of that third country on the basis of the preliminary findings set out in the technical analysis by the [European] Commission and the [EU's] intended remedial action.”
  • Finally, it is clearly stated that the EU member states should be “informed of all steps of the engagement and of the outcome” and that a final decision only can be taken unanimously “after the final outreach to that third country has been concluded.”

By RFE/RL

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Leave a comment
  • Mamdouh Salameh on July 03 2023 said:
    If all the unprecedented Western sanctions against Russia, bans on its oil exports and a price cap to boot have failed miserably, what chance does an EU’s new anti-circumvention sanctions framework have?

    Despite all these measures which are aimed at crippling the Russian economy, Russia’s economy is on the whole in better shape than the United States’ and the EU’s.

    Russia’s GDP is projected to grow by 1.2% in 2023 compared with 1.2% for the United States and 0.8% for the EU with Russian unemployment remaining at a record low of 3.5%.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert
  • DoRight Deikins on July 04 2023 said:
    Can anyone say 'appeasement' or 'Neville Chamberlain' or 'paper tiger'? It's not their sons who are dying. Turn Georgia or Kazakhstan, Kyrgyzstan, and Uzbekistan into the arms of Putin? I don't understand much about politics, but I do know that the power brokers of those countries understand power and are quite pragmatic about keeping it.

    Unfortunately those power brokers through the ages haven't understood the true source of their power.

Leave a comment




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