Eu deadlocked on sweeping Russia sanctions package

Yesterday 16:50

By: Dakir Madiha

Eu deadlocked on sweeping Russia sanctions package

European Union governments are struggling to seal agreement on a landmark twentieth package of sanctions against Russia, with a far‑reaching ban on maritime services for Russian oil tankers at the heart of the dispute as the anniversary of Moscow’s full‑scale invasion of Ukraine approaches on 24 February. EU ambassadors meeting in Brussels on Friday again failed to bridge differences over the scope and timing of the measures, casting doubt on plans to have the package formally endorsed by foreign ministers ahead of the symbolic deadline. Despite the impasse, senior officials insist a deal remains within reach and are preparing further negotiating sessions over the weekend in an attempt to break the deadlock.

At issue is a proposal to scrap the current G7 price‑cap regime on Russian crude and instead bar EU companies from providing services such as insurance, shipping, financing and other support to vessels transporting Russian oil, gas or coal from Russian ports, a step that would hit a substantial share of Moscow’s seaborne energy exports. The measure would apply broadly to tankers, including those in Russia’s so‑called “shadow fleet”, and is intended to cut off access to Western maritime, financial and technical services that still underpin much of the trade in Russian hydrocarbons. Greece and Malta, both major shipping nations, have warned that an outright services ban could damage their maritime sectors, push business to non‑EU competitors and raise energy costs, and have demanded clearer rules on how the restrictions would affect foreign ports and ship sales.

The proposed package, unveiled by European Commission President Ursula von der Leyen in early February, is framed as an effort to tighten energy, financial and trade pressure on the Kremlin and to close loopholes that have allowed sanctioned goods to reach Russia. It would add 43 tankers to the EU’s blacklist of vessels linked to Russia’s shadow fleet, bringing the total to around 640, and expand bans on maintenance and other services for LNG tankers and icebreakers to curb Russian gas export projects. On the financial side, the draft includes listing 20 additional Russian regional banks and measures targeting crypto‑asset firms and intermediary institutions in third countries suspected of facilitating sanctions evasion. New export controls worth more than €360 million would cover goods and services ranging from rubber and tractors to cybersecurity tools, alongside fresh import bans on metals, chemicals and critical minerals estimated at over €570 million and a quota to cap ammonia imports.

The package would also activate, for the first time, the EU’s anti‑circumvention instrument against a third country, by restricting exports of sensitive machine tools, radio equipment and other dual‑use items to Kyrgyzstan amid concerns that such goods are being re‑exported to Russia in violation of existing sanctions. Officials argue that tightening enforcement and closing these backdoors is now as important as adding new names to blacklists or broadening sectoral bans, as Russia has adapted to earlier measures by rerouting trade through neighbouring states and relying on opaque shipping networks. The Commission has presented the move as a test case that could be extended to other jurisdictions if evidence of systematic circumvention emerges.

Political resistance is not limited to maritime states worried about their shipping industries. Hungary and Slovakia have raised concerns about maintaining access to Russian oil via the Druzhba pipeline and routes through Croatia, and Budapest has reportedly pushed to remove certain Russian individuals from existing sanctions lists as part of the negotiations. Several other governments have also voiced reservations about aspects of the draft energy measures, including possible restrictions on ammonia and steel, underlining how consensus‑based decision‑making can slow the bloc’s response even as the conflict grinds on. EU foreign policy chief Kaja Kallas and Economy Commissioner Valdis Dombrovskis have both stressed that Brussels is prepared to press ahead with the maritime ban even without full G7 alignment, arguing that the effectiveness of sanctions now depends on the EU’s willingness to move first and force others to follow.

In public remarks, Kallas has framed the package as part of a broader strategy to raise the cost of war for Moscow by steadily eroding its energy revenues and limiting its access to critical technologies and financing. She and other senior officials contend that Russian forces are suffering heavy losses on the battlefield and that the economy is under mounting strain, but that President Vladimir Putin will only reconsider his course if the balance of costs and benefits shifts decisively. With the fourth anniversary of the invasion looming, EU leaders are keen to demonstrate continued resolve and solidarity with Ukraine, even as internal divisions over how far and how fast to escalate economic pressure on Russia become more visible.