Brussels remains divided over sanctions against Russia

Brussels. Another round of sanctions against Russia, another impasse and another attempt to avert the worst. Yesterday, the ambassadors of the 27 EU member states were unable to agree on extending the targeted sanctions against individuals and entities involved in the war of aggression against Ukraine. Slovakia is opposed because it is demanding that two oligarchs, Mikhail Fridman and Alisher Usmanov, be removed from the blacklist. It unexpectedly found support from France regarding Usmanov. The deadline was today. A failure to reach an agreement could have resulted in over 2,500 individuals and entities being removed from the EU’s blacklist. The only solution found was to extend the sanctions regime by just one week, rather than six months or a year. It will remain in place until midnight on 22 September.

Nothing really new. The Slovak Prime Minister, Robert Fico, had already tried this in the past, but without success. On Friday 11 September, a compromise seemed possible: Slovakia would have had to withdraw its request regarding Fridman and Usmanov and, in return, the sanctions would remain in place for six months. It was at that point that France announced its support for removing Usmanov from the blacklist. French officials justified the move on grounds of national security and at the request of an international partner, without going into detail. The Financial Times revealed yesterday that the move is reportedly part of a prisoner exchange with Azerbaijan. Italy and Croatia have said they are willing to lift the sanctions against Usmanov as a compromise to preserve the entire sanctions regime. Yesterday, Luxembourg insisted on removing Friedman’s name as well; he has brought a €15 billion lawsuit against the Grand Duchy over the freezing of his assets. The other member states opposed this. “Consultations will continue” until 22 September, said a spokesperson for the Irish Presidency of the Council of the EU: “The renewal of the lists is essential to continue undermining the Russian war machine and to maintain pressure on those individuals and entities that support, facilitate and benefit from it.”

The extension of the individual sanctions regime linked to Ukraine’s territorial integrity should be a formality, even more so following Viktor Orbán’s departure from the scene. On one occasion, the former Hungarian prime minister managed to have some relatives of oligarchs removed from the EU’s blacklist. However, the 2,600 individuals and entities affected by EU sanctions represent a cornerstone of the strategy to weaken Vladimir Putin and his war effort. The blacklists include not only Russian military personnel and oligarchs, but also companies from third countries that supply weapons and technology. The sanctions include a ban on entry into the EU, an asset freeze and a prohibition on financial transactions with the blacklisted individuals or entities. But approving new sanctions or extending existing ones is becoming increasingly difficult. Ukraine and its most staunch supporters in the EU had hoped that Orbán’s departure would make things easier. Instead, other countries have been hiding behind the Hungarian Prime Minister’s vetoes to secure concessions.

In July, the EU made a fool of itself over the 21st package of sanctions against Russia. Germany and Portugal managed to have the embargo on Russian cod (crucial for the German frozen food industry and Portuguese bacalhau) lifted. France and Italy blocked the adoption of a ban on granting visas to former Russian combatants (for fear of losing tourists). Greece nearly caused the price cap on Russian oil to be breached (until it secured permission to continue transporting gas from Russia to third countries). In that instance too, a short extension was needed to avert the worst.

Faced with difficulties in approving new sector-specific packages, the High Representative, Kaja Kallas, had announced a change in strategy regarding sanctions: to focus solely on blacklists, to be updated once a month, with the addition of new names. In September, Kallas had indicated her intention to sanction more than 1,600 individuals and entities. However, this approach risks proving counterproductive if, even when it comes to renewals, Member States turn it into a major bargaining exercise.