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“Trade with Europe will not stop”: how the 10th package of European sanctions will affect the Russian economy

Date: March 24, 2023 Time: 21:28:50

The tenth package of sanctions will not stop trade between Russia and the European Union


On Saturday night, the European Union still managed to agree on the 10th anniversary package of European sanctions. Initially, the package was blocked by Hungary and Bulgaria, and when concessions were made to them, Poland “hit”, considering the measures agreed in the end too weak. What did the anniversary package turn out to be after all the persuasion and agreement? Let’s leave the political moments, we will analyze what can have an impact on our economy.

So far, the content of the new European sanctions is only known from the EU Council statement, published on February 25. It does not contain a list of specific organizations and individuals against which prohibitions and restrictions are introduced; will be posted later. The rest are purely economic innovations.

1) A ban on the supply of a number of other technologies and goods to Russia is introduced.

These are, in particular:

-specialized vehicles, machine parts, parts for trucks and jet engines,

– goods for the construction sector, which can also be used for military purposes, such as antennas or cranes,

-new electronic components that can be used in Russian weapons systems: drones, missiles, helicopters, as well as special rare-earth materials, electronic integrated circuits and thermal cameras.

2) The import of asphalt and synthetic rubber from Russia is limited.

The explanation is as follows: these goods “bring significant income to Russia.”

3) The transit through Russia of dual-use goods and technologies traveling from somewhere to the EU is prohibited.

Everything is clear here: so that transit is not used as a cover to circumvent sanctions.

4) A ban on the provision of gas storage facilities to Russian citizens has been introduced, with the exception of some LNG (liquefied natural gas) facilities.

As specified, this decision will not allow Moscow to use gas supplies “as a weapon to manipulate the market.” (Translating: we are talking about Russian or Russia-related trading companies that do not immediately sell gas to European suppliers, but store it somewhere. And, as European officials suggest, they can inflate prices in this way. Furthermore, traders Europeans can do the same: they are only speculating, and the Russians, according to European Commission officials, are carrying out the “Moscow order”).

5) The list of organizations that “directly support the Russian military-industrial complex” has been expanded, there are 96 new members, against which stricter export restrictions have been introduced.

The list includes three Russian banks. They have not yet been named. But earlier it was assumed that these would be Alfa-Bank, Rosbank and Tinkoff. The first two are already under US sanctions. And as experts have repeatedly said, nothing will change for ordinary clients of these banks who are in Russia and transfer money through Russia.

Also on the sanctions list were seven Iranian companies. They were accused of supplying dual-use goods (drones) to Russia.

– Initially, Rosatom was on the sanctions list. It has been removed from the European list for the time being: Hungary, which is building its own nuclear power plant, had to make concessions. But if it had stayed there, it would have been the most important item in the tenth package. Of the rest, in my opinion, the damage to the Russian economy of 11 billion euros, announced by the head of the European Commission, Ursula von der Leyen, is by no means accumulating, – economist Denis Raksha commented on the new sanctions on KP .RU. – Let’s say that this package will not stop trade between Russia and the European Union. The sanctions have already been targeted, each next package contains more and more measures that clarify the previous sanctions and prevent ways to ignore them. These specific measures are directed, first of all, against assets that may have a dual purpose. The logic goes something like this: we are imposing sanctions on road-building teams, because the military needs roads too. Secondly, it is about sanctions against the circumvention of sanctions and those who help to circumvent them. Here, both European and American officials have enough work to do for many, many more packages. Therefore, with each new package, there are also new people who want, including entire countries, to earn extra money with help bypassing them. This can go on indefinitely, since all these cases of sanctions, as is already obvious, are designed for a very long term, regardless of the situation in Ukraine. I will dwell separately on sanctions against banks. Of course, the circle of those through which payments in certain currencies can normally go to certain countries will narrow a little more. But there has never been a complete bank blockade, and there still isn’t, it’s just that payments, where necessary, are more difficult and longer.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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