EU Sanctions Against Russia: Update, June 2022

Since the beginning of Russian incursions in eastern Ukraine and annexation of Crimea in 2014, over 200 people and entities have been targeted by EU sanctions. However, in response to Russia’s recognition of the non-government controlled areas in eastern Ukraine on Monday, 21 February, the EU adopted a package of sanctions on Wednesday, 23 February. 

These sanctions targeted people and entities “who have played a role in undermining or threatening the territorial integrity and independence of Ukraine.” The measures included the freezing of assets and an EU travel ban. 

Those targeted included 351 members of the State Duma of Russia, the 450-seat lower house of the Federal Assembly of Russia. A further 27 high-profile individuals and entities were also targeted, including members of the Russian government, businesspeople, military officials and those involved in disinformation. Notable examples included Sergei Shoigu, Minister of Defence since 2012 and Nikolay Yevmenov, Commander-in-Chief of the Russian Navy since 2019. 

Additionally, the Russian Government and Central Bank of Russia was restricted in accessing the EU’s capital and financial markets and services. 

In the early morning of Thursday, 24 February, Russia launched an invasion of Ukraine. On the following day the EU responded with a second package of sanctions against over 140 additional individuals and entities in Russia. 

These included the freezing of assets of individuals such as President of Russia, Vladimir Putin, who first entered office in 1999, Sergey Lavrov, Minister of Foreign Affairs since 2004, other members of the State Duma and members of the National Security Council of Russia. 

The EU agreed to cut Russian access to EU capital markets, impacting some 70% of the Russian banking market. The sanctions aimed to significantly limit the financial inflows from Russia to the EU, with deposits from Russian clients limited to €100,000. 

An EU export ban on goods and technologies to Russia was also included. This related to defence, security, oil refining, aviation, and space in addition to the provision of insurance, financial services and assistance to these sectors. 

The EU also stripped Russian diplomats, officials and businesspeople of a visa facilitation process that allowed them privileged access to the EU. This decision does not impact ordinary Russian citizens. 

The third set of sanctions involved a further 27 individuals and entities being targeted with asset freezes and an EU travel ban imposed. This included members of the Russian military, members of the government, politicians, political officials, businesspeople, individuals in Russian media and those who spread disinformation. 

The EU agreed to freeze all financial assets of the Central Bank of Russia and ban EU transactions with it., severely limiting the Central Bank’s ability to access its international reserves of about €570 billion. 

The EU also banned from its airspace any aircraft operated by Russian air carriers, Russian-registered aircrafts, and non-Russian-registered aircrafts that are owned or chartered, or otherwise controlled by a Russian individual or entity. 

On Wednesday, 2 March the EU agreed to exclude seven Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Established in 1973, SWIFT is the dominant messaging system that underpins global financial transactions for over 11,000 financial institutions. 

Russia’s second-largest bank VTB, Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank and VEB had until Saturday, 12 March to wind-down their SWIFT operations. This decision has prevented these banks from carrying out financial transactions worldwide. 

The EU banned participation in the Russian Direct Investment Fund and the selling, supplying, transferring, or exporting of euro denominated banknotes to Russian entities such as the government or the Central Bank of Russia. 

The EU suspended the distribution of specific Russian state-owned news organisations in the EU, specifically Russia Today and Sputnik. It said that “In order to justify and support its aggression against Ukraine, the Russian Federation has engaged in continuous and concerted propaganda actions […] gravely distorting and manipulating facts.” The sanctions relate to distribution through cable, satellite, Internet Protocol Television, platforms, websites, and apps. 

On Tuesday 15 March, a fourth set of restrictive measures were adopted. These included a ban on any transactions with certain Russia state-owned enterprise, a ban on importing Russian steel products worth around €3.3 billion, a “far-reaching ban on new investments” across Russia’s energy sector and an EU export ban of luxury goods, such as pure-bred breeding of animals, clothing, jewellery, antiques, cars to yachts. 

Over 20 more “oligarchs and business elites linked to the Kremlin, as well as companies active in military and defence areas, which are logistically and materially supporting the invasion” were also targeted. These included Roman Abramovich, the former owner of Chelsea Football Club, Konstantin Ernst, CEO of Channel One Russia, and companies such as Russian Helicopters, United Aircraft Corporation, United Shipbuilding Corporation and the Zelenodolsk Shipyard. 

The fifth set of sanctions of 8 April targeted Russian banks, prominent oligarchs, business individuals and high-ranking Russian officials. 

The targeted banks include VTB Bank, Bank Otkritie, Sovcombank and Novikombank.  

Over 200 individuals and entitles targeted include Oleg Dobrodeev, the Director General of the All-Russian State Television and Radio Broadcasting Company (VGTRK); Maria Vladimirovna Vorontsova, the eldest daughter of President Vladimir Putin; Anton Valerevich Kuprin, Captain of the frigate “Admiral Essen” of the Russian Black Sea fleet; Aleksandr Aleksandrovich Shulgin, CEO of Ozon, Russia’s leading multi-category e-commerce platform. 

The fifth packaged also banned the purchase, import, or transfer, directly or indirectly, of Russian coal and other such solid fossil fuel into the EU from August 2022. According to the European Commission, “this will result in around €8 billion loss of revenue per year for Russia.”  

According to the Central Statistics Office, between 2011 – 2020, Russian coal accounted for on average 7% (€9.9m) of all Irish coal imports. However, in 2021 Russian coal accounted for 67% (€140m) of all coal imports. This reflects efforts in recent years to away from using Columbian-sourced coal for the Moneypoint Power Station to using Russian coal. 

This set of sanctions also introduced further EU export bans worth €10 billion including jet fuel, quantum computers, advanced semiconductors, high-end electronics, software, sensitive machinery and transportation equipment.  

Further EU import bans apply to chemicals such as hydrogen, nitrogen, oxygen and silicon, in addition to goods and technology suited for use in oil refining, equipment for oil production and oil exploration, liquefaction of natural gas, aviation or the space industry. 

EU import bans on products worth €5.5 billion to the EU include: wood, cement, fertilisers, seafood and liquor. Further, several individuals related to Acron Group, one of Russia’s largest fertilizer producers, were added to the EU sanctions list in the fifth package of sanctions.  

As part of this new sanctions package, a ban will be imposed on Russian or Belarusian commercial transport freight movements by road across the EU. 

A wind-down period exists for these new measures between 9 April – 10 July 2022. 

The fifth package of sanctions also introduced a ban of any Russian registered flagged vessels from accessing EU ports after 16 April 2022, except in the case of emergency. This ban also applies to vessels that have changed their flag or registered with any other state after 24 February 2022. 

A key element of the sixth set of sanctions, was the outcome of the European Council in Brussels at the end of May. An agreement was reached to ban importing Russian oil into the EU, resulting in around 90% of EU imports of Russian oil being cut by the end of 2022.  

The EU accounts for 45% of all Russian oil exports, according to the International Energy Agency. According to the Central Statistics Office, between 2014 – 2021, Russia accounted for 3% (€119m) of oil imports into Ireland, where in 2021 it accounted for 6% (€230m). 

The ban relates to Russian oil that is moved via shipping only, while oil moved through pipelines is unaffected. This was to meet concerns from several landlocked EU Member States. 

The pipeline in question is the Soviet-era built Druzhba pipeline, which began bringing Russian oil to many countries in Eastern Europe from the early 1960s. The 5,500km network of pipelines brings Russian oil directly to refiners in Czechia, Germany, Hungary, Poland and Slovakia. 

Both Germany and Poland are on the northern Druzhba pipeline, and source 31% and 66% of their oil from Russia respectfully. They gave verbal assurances at the European Council that they will implement this ban by the end of 2022. 

With Czechia, Hungary and Slovakia sourcing 48%, 100% and 68%, respectfully, of their oil from Russia on the southern Druzhba pipeline, they were allowed more time to adopt.  Speaking after the European Council, European Commission President Ursula von der Leyen said, “This is a topic we will have to come back to and we’ll still have to work on. But this was a big step today.” 

Other elements of this package of sanctions include cutting Russia’s biggest bank, Sberbank, from the SWIFT messaging system, banning several Russian broadcasters from the EU, and adding more people to a list whose assets are frozen. 

To date, over 1,000 individuals and over 80 entities and organisations relating to both Russia and Belarus have been targeted by EU sanctions. A timeline of EU measures against Russia by the EU can be found here.