Page 10 - RusRPTJul22

2.0 Politics
2.1 Oil embargo, SWIFT, Yandex CEO and National
Depository part of EU’s sixth sanction package
The European Council has officially adopted the EU sixth sanction package for Russia’s military invasion of Ukraine, according to the June 3 announcement and the official EU journal entry.
As followed by bne IntelliNews, the EU leaders have agreed in principle to cut 90% of Russian oil imports by the end of 2022, resolving the weeks-long stalemate over the sixth sanction package.
Oil embargo As far as the oil embargo is concerned, the phasing out of Russian oil will take from six months for crude oil to eight months for other refined petroleum products. The latest EU oil ban proposal allows a temporary exemption for pipeline supplies, the key demand of Hungary, which was blocking the adoption of the sanction package.
“A temporary exception is foreseen for imports of crude oil by pipeline into those EU member states that, due to their geographic situation, suffer from a specific dependence on Russian supplies and have no viable alternative options,” the EC commented.
Bulgaria and Croatia will also benefit from temporary derogations concerning the import of Russian seaborne crude oil and vacuum gas oil respectively.
In 2021 the EU improted €71bn worth of Russian oil and oil products in 2021, out of which €65bn would be phased out by the end of 2022 under the sixth sanction package, RBC business portal estimated.
As analysed by bne IntelliNews, even more damaging than the oil embargo itself would be a ban on insuring and reinsuring tankers carrying Russian oil that was also being prepared by the EU. The formulation on the insurance of tankers remains vague, however.
The official EU journal states that it is "appropriate to prohibit the insurance and reinsurance of maritime transport of such goods to third countries" but that the "appropriate transitional periods should be provided for". The sixth sanction package also prohibits the "insurance and reinsurance of maritime transport" of "crude oil and certain petroleum products, which originate in Russia or are exported from Russia" to third countries.
SWIFT cuts In addition to the oil embargo, the EU will disconnect three Russian banks Sberbank (Sber, Russia’s largest state-controlled bank), Credit Bank of Moscow and the Russian Agricultural Bank from the specialised financial messaging service (SWIFT). The Belarusian Bank for Development and Reconstruction will also be cut off SWIFT.
10 RUSSIA Country Report October 2020 www.intellinews.com