The twenty-seven member states of the European Union reached an agreement today on an eighteenth package of sanctions against Russia over its war in Ukraine, after the package was blocked for weeks by Slovakia.
The sanctions are aimed at further hitting Russia's oil and energy industries. Reuters reviews the measures included in the package.
Oil price ceiling
Central to the package is a lower price cap on Russian oil, a measure that aims to reduce Moscow's energy revenue without disrupting world markets by completely cutting off Russian supplies.
The EU will impose a floating price cap on Russian crude that will be 15 percent below its average market price, EU diplomats said.
That would mean a cap of around $47.60 a barrel at present, well below the $60 maximum that the Group of Seven (G7) major economies have been trying to impose since December 2022. since.
The measure aims to ban trade in Russian crude oil purchased at a higher price by prohibiting shipping, insurance and reinsurance companies from handling tankers carrying such crude.
The European Union and Britain have been pushing the G7 to lower the cap, as the fall in oil futures has made the $60 cap largely ineffective.
However, the United States is opposed, leaving the EU to proceed on its own, with Brussels having only limited powers to enforce the measure as oil is mostly traded in dollars, the clearing of which is controlled by US banks.
Shadow fleet and energy trading also restricted
The EU will no longer import any petroleum products made from Russian crude, although the ban will not apply to imports from Norway, the UK, the US, Canada and Switzerland, EU diplomats said.
Another 105 vessels are banned from accessing EU ports and locks or transferring oil from ship to ship - an attempt to stop the so-called "shadow fleet" of old tankers used to transport Russian oil and circumvent sanctions.
In total, the EU has already imposed sanctions on more than 400 ships in the shadow fleet.
The measure targets non-EU tankers that are part of Vladimir Putin's shadow fleet that circumvents the mechanism to limit oil prices, that support Russia's energy sector or that carry military equipment for Russia or stolen Ukrainian grain.
"Nord Stream"
The EU is also imposing a complete ban on activities on "Nord Stream" 1 and 2, including for the provision of goods or services, thereby preventing the completion, maintenance, operation and any future use of the Nord Stream 1 and 2 gas pipelines.
Financial sector
The EU is upgrading the existing ban on the provision of EU-based specialised financial messaging services to certain Russian banks to a full ban on transactions. Thus, 22 more Russian banks, in addition to the 23 already subject to the ban, will be excluded from the SWIFT financial communication system.
In addition, Brussels lowers the threshold for imposing sanctions on financial and credit institutions and cryptocurrency service providers from third countries that thwart sanctions measures against Russia, support Russia's aggressive war or are linked to the Financial Messaging Transfer System (FMTS) - the Russian alternative financial messaging service developed by the Central Bank of Russia and used to shield Russian banks from the impact of EU sanctions.
The measure aims to further restrict Russia's access to international financial markets and foreign exchange.
The EU countries also agreed to lower the threshold for imposing additional sanctions on foreign financial and credit institutions that undermine sanctions or support Russia's military efforts - for example by circumventing the price limit on oil.
Export ban, new blacklist entries
The EU will blacklist 26 new entities for circumventing sanctions, including seven from China, three in Hong Kong and four in Turkey, diplomats said.
Military industry
In order to limit Russia's military potential, the EU is imposing additional full-scale sanctions on suppliers of the Russian military-industrial complex, including three China-based entities that sell battlefield goods. These measures aim to further restrict Russia's access to goods and technology. The package also covers eight companies operating in the Belarusian military-industrial complex that supports Russia's military efforts.
26 new entities will be subject to stricter export restrictions on dual-use goods and technology, including those that could contribute to the technological advancement of Russia's defence and security sector. Eleven of them are located in third countries other than Russia (seven in China and Hong Kong and four in Turkey) and have been involved in circumventing export restrictions, including on unmanned aerial vehicles (UAVs).
The EU has also negotiated additional export bans worth over €2.5 billion. The list of restricted goods contributing to the technological advancement of the Russian defense and security sector will now include goods for the development and production of Russian military systems, such as numerically controlled machines and chemicals that make up fuels. In addition, the existing ban on transit through Russia is being expanded to cover the transport of selected economically important goods used in construction and transport.
Delayed adoption of sanctions
The package of sanctions against Russia is the 18th for the EU since Moscow's full-scale invasion of Ukraine in 2022. But with each successive round of sanctions, it is increasingly difficult to reach agreement, as the measures targeting Russia damage the economies of the 27 member states.
The approval was delayed for weeks due to repeated vetoes by Slovakia and Malta.
Slovakia was held back by concerns about proposals to cut off Russian gas supplies, on which it relies. The country only lifted its veto after Prime Minister Robert Fico said he had achieved the maximum that could be achieved at this stage.