Page 37 - Russia OUTLOOK 2023

• Sanctions

The EU cannot confiscate the frozen $300bn in assets of the Russian
central bank because of the international principle of state immunity, The
Wall Street Journal reported on December 4. The European Commission said
this principle made confiscation impossible, but the EU might establish a fund
for management of liquid assets and allocate profit from investment in
reconstruction of Ukraine.

The Commission also said that the EU has no information on the share of
central bank's assets in various member states and on the share of liquid
assets. The EU will insist on Russia's granting part of the frozen assets to
Ukraine in the framework of a peace treaty. The EC outlined the ninth package
of sanctions in December that includes another 200 names of individuals to the
Specially Designated Nationals and Blocked Persons (SDN) list that includes
Russian armed forces, individual officers and defence companies, members of
parliament, ministers, governors and political parties, among others, European
Commission President Ursula von der Leyen said.

Three more Russian banks will also be added to the list of sanctioned banks
including the Russian Regional Development Bank.

Sanctions on products will also be expanded targeting export controls and
restrictions for dual-use goods, including chemicals, nerve agents, electronics
and IT components that could be used by the Russian war machine.

Russia does not have a chip sector of its own and relies heavily on the import
of semiconductors and microchips from the West. Its partners like China do
produce chips of their own, but only lower quality chips. The higher quality
chips they also produce are made under licence from their US intellectual
property owners and are covered by US sanctions and cannot be exported to
Russia.

EC President Ursula Von der Leyen said that the new sanctions are aimed at
cutting Russia off from technology to produce drones in particular, banning the
direct exports of drone engines to Russia and the export to any third countries,
such as Iran, which could supply drones to Russia.

Four more Russia controlled TV stations will be taken off air and blocked on
the internet.

New economic measures will also be brought against the Russian energy and
mining sector, including a ban on new mining investments in Russia. Mining
and metals have been largely excluded from the sanctions regime so far as
Russia remains deeply integrated in the international metals market.

Significant leakage to the sanctions regime remains as the year came to an
end. The ninth package contains little of substance, although the mining and
metal sanctions could be significant if implemented. The most significant
sanctions to be implemented in the fourth quarter was the oil price cap

37 Russia OUTLOOK 2022 www.intellinews.com