EU Must Intensify Sanctions on Russia to Cripple War Machine

After two years of Russian aggression and the ongoing escalation in Ukraine, it is time to increase further the cost of continuing the war with the Kremlin. When sanctions are applied properly and major loopholes are closed, their effectiveness increases. Since sanctions policy is a “moving target,” the EU and other Western partners must learn to be faster and more persistent in tightening controls, identifying loopholes and closing them immediately, and increasing investigations and fines in case of violations.

Russia is constantly looking for new tactics and schemes to evade sanctions. Thus, the latest EU sanctions packages include measures to combat circumvention and strengthen the implementation of existing sanctions.

The priority is ensuring compliance with the oil price cap and fighting against the Russian “shadow fleet”. The new energy measures in the EU’s 12th package require 1) close monitoring of tanker sales to third countries, including notification of all tanker sales by EU operators; and 2) more detailed attestation requirements, such as the exchange of information on insurance and transportation costs to verify compliance with the price cap. At the same time, the recent US investigations and sanctions against shipping companies and tankers operating outside the price cap have had tangible consequences, leading to the shutdown of these tankers and disruptions in oil flows. The EU is expected to take the same step in sanctioning these tankers.

Additional actions are needed to maintain the credibility of the EU sanctions policy:

  1. You are effectively addressing sanctions evasion and export controls for critical components of Russian military production, including close cooperation in implementing enhanced due diligence and supply chain controls for EU industry, using an anti-circumvention mechanism in case of systemic third-party circumvention, and using financial institution methodologies to track and identify potential violations.
  2. Strengthening regulatory requirements and compliance with the oil price cap, preventing further expansion of the shadow fleet by Russia, and further reducing the price cap on Russian crude oil and petroleum products.
  3. Strengthening the capacity of law enforcement and export control agencies is important, as export controls and sanctions are expected to play an important role in the current geopolitical context.
  4. New sectoral restrictions, including sanctions on Russia’s nuclear and liquefied natural gas (LNG) industries, iron ore, non-ferrous metals, etc.

While the sanctions policy is only one element of the EU’s response to Russia’s illegal aggression against Ukraine, it is vital to weakening the Kremlin’s ability to wage war.

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