Page 12 - bne magazine February 2024_20240206

12 I Companies & Markets bne February 2024
EU imposes twelfth sanctions package on Russia, including a ban on diamond imports but not tanker sales
Ben Aris in Berlin
European Union countries have collectively endorsed the implementation of the 12th sanctions package against Russia, which encompasses a range of measures, notably the prohibition of Russian diamond imports. The decision, effective from January 1, underscores the EU's ongoing commitment to address geopolitical concerns.
"The European Council welcomes the adoption of the twelfth package of sanctions," stated the official announcement, highlighting the unity of EU nations in implementing these restrictive measures.
At the same summit the EU cleared the way to release €10bn of funds to Hungary that was blackmailing Brussels by threatening to block signing off on the formal start to Ukraine EU accession talks.
But almost immediately Hungarian Prime Minister Viktor Orban came up with a new threat to block a separate vote to approve a four-year €50bn aid package, adding the deal should be for less money and last only one year.
Orban is holding out for the release of a larger €30bn of
EU funds that were frozen by the European Commission executive last year over fears the government in Budapest was undermining the independence of country’s judiciary and claims of rampant corruption in Orban’s administration.
The EC executive remains committed to supporting Ukraine and bringing it into the European club at the earliest opportunity. European Council President Charles Michel announced the landmark decision to start the accession process, stressing the bloc's commitment to engaging in accession negotiations with both Ukraine and Moldova, which will also start accession talks.
Sanctions enforcement
The new sanctions package is mainly focused on enforcing the existing sanctions more effectively. As bne IntelliNews has reported, the oil sanctions have failed and are largely a spent cannon, while the technology sanctions have also largely failed to cut Russia off from Western technology.
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After torturous debate, the EU imposed its twelfth sanctions package, which bans the import of Russian diamonds, but not the sale of oil tankers to Russia. / bne IntelliNews
The key component of the sanctions involves a comprehensive ban on the import of Russian diamonds, with additional measures scheduled to unfold in a phased manner. Starting in March, a phased ban on diamond imports from third countries will be enforced, aligning with the stance of the G7 nations.
In addition to the diamond embargo, the sanctions package introduces measures to enhance the scrutiny of companies claiming adherence to the G7 Russian oil price cap sanctions. This move aims to ensure that companies dealing with certain products prevent their partners from reselling goods to Russia, particularly in the context of dual-use technologies.
Following the failure to make Western control of the international maritime insurance business to enforce the oil price cap sanctions, the West has been drawn into a game of whack-a-mole where it has been imposing secondary sanctions on individual tankers and shipping companies without much effect. Russia’s many friendly countries
in places such as Turkey and Central Asia have also been complicit in helping reroute Western technology to Russia in order to avoid sanctions.
“The key component of the sanctions involves a comprehensive ban on the import of Russian diamonds, with additional measures scheduled to unfold in a phased manner”
One notable aspect of the sanctions is the effort to impede Russia from accessing dual-use technologies. Amongst the proposals is a tracking system that follows the goods from the producer to their final destination in order prevent the on-shipping ruses. Companies dealing with such products will be obligated to ensure that their partners sign contracts explicitly preventing the resale of these goods to Russia.