Friday, April 29, 2022

Von der Leyen says EU working ‘intensively’ on new Russia sanctions

‘The sixth package of sanctions will come in due time,’ says Commission president.


Von der Leyen said the EU is working "intensively" on a new package of sanctions to hit Putin's regime | John MacDougall/AFP via Getty Images


European Commission President Ursula von der Leyen said the EU is working hard on a plan to hit Vladimir Putin's regime with a new package of sanctions, as the bloc seeks to end its reliance on Russian fossil fuels.

The EU is planning action against Russia's oil sector and banks, and proposals are expected to be drafted for diplomats to consider within days, according to envoys who met with the Commission on Wednesday.

"The sixth package of sanctions will come in due time. We're working intensively on it," von der Leyen told reporters in Brussels. "We are working hard not only to get rid of the coal, as we have done already, but also we are working on the topic of oil. And you have seen today the question of gas dependency on Russia."

She was speaking after the Kremlin announced it is cutting off gas supplies to Bulgaria and Poland, a move she described as "blackmail."

Von der Leyen said Poland and Bulgaria are receiving gas supplies from their immediate EU neighbors, adding that the bloc will continue to build up storage capacity and work to secure alternative supplies from other parts of the world.

The EU has imposed five rounds of sanctions against Moscow in response to Putin's invasion of Ukraine, which is now two months old. But so far there has been no agreement on a sweeping plan to hit Russia's lucrative oil and gas sectors, income from which is financing the Kremlin war machine.

EU countries have agreed to phase out imports of Russian coal over coming months, but the impact will be far easier for Putin to absorb than an embargo on oil or gas. The question now is how tough any sanctions on oil will prove to be when the next package is unveiled.

The Commission on Wednesday told EU ambassadors they will hold meetings over the weekend to discuss the new sanctions proposals. Depending on these talks, the package could then be presented to EU ambassadors next week.

The discussions will be crucial in determining how far the sanctions will go on Russia's oil sector, and how long any transition period will be before the measures come into force.

Be smart

During Wednesday's discussions with the Commission, several EU ambassadors warned about the potential global impact of hitting Russian oil imports, diplomats said afterwards. However, one EU diplomat stressed Putin’s decision to cut off gas supplies to Bulgaria and Poland had helped build a consensus on moving ahead with targeting oil.

“The Commission stressed any measure on Russian oil imports has to be ‘smart’ as it has to hit Putin without undermining the global oil market,” said another EU diplomat.

Several diplomats also said they expect the next package to sanction more Russian banks and individuals. The measures could include further export restrictions, the first diplomat said, following Wednesday's meeting.

Large Russian banks such as Gazprombank and Sberbank have so far been excluded from the sanctions, as they are involved in energy transactions.

Targeting Russia's fossil fuel exports is not straightforward for the EU.

Germany and Hungary are among the countries that have been reluctant to endorse a sweeping plan to block Russian oil imports, amid fears such a move would deliver a severe blow to their economies. However, on Tuesday, Germany's climate and economy minister Robert Habeck suggested the country could end its oil dependence on Russia within days.

Sanctioning Putin's gas industry will be more difficult for Germany, which is heavily reliant on supplies from Russia for its energy needs.

In retaliation against sanctions, Putin has ordered that all "unfriendly" countries buying Russian gas would have to make payments in rubles.

Von der Leyen warned on Wednesday that companies paying in rubles for gas may be breaching EU sanctions. Her warning came after a Bloomberg report cited a person close to Gazprom as saying some European companies were taking steps that would allow them to comply with Putin's demands.

"If this is not foreseen in the contract, to pay in rubles is a breach of our sanctions," von der Leyen said. "Companies with such contracts should not accede to the Russian demands. This would be a breach of the sanctions, so a high risk for the companies.”

America Hernandez and Paola Tamma contributed reporting.

https://www.politico.eu/article/eu-working-intensively-on-new-russia-sanctions-von-der-leyen/ 

Russia is waging a cruel, ruthless war, also against Ukraine’s civilian population. We need to sustain utmost pressure at this critical point. So today we are proposing a 5th package of sanctions.


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