Council Takes the First Step to Make Violation of EU Sanctions an EU Crime: On 28 June 2022, the Council reached an agreement at technical level on the Commission’s proposal to make violation of EU sanctions an EU crime. This would allow the Commission to propose a directive defining the scope and the criminal penalties for the violation of sanctions across Member States in a consistent manner. The Council’s Permanent Representative Committee still has to officially endorse the agreement and to request the consent of the European Parliament before the final adoption of the text. (https://data.consilium.europa.eu/doc/document/ST-10556-2022-INIT/en/pdf).
EU Nears Compromise Deal to Defuse Standoff with Russia: According to two sources familiar with the matter, trade through Lithuania to the Russian exclave of Kaliningrad could return to normal within two days. European officials are edging towards a compromise deal with the Baltic state to defuse a row with Moscow. European officials are in talks about exempting the territory from sanctions, paving the way for a deal in early July if EU member Lithuania drops its reservations. (https://www.reuters.com/world/europe/exclusive-kaliningrad-row-eu-nears-compromise-deal-defuse-standoff-with-russia-2022-06-29/).
German Chancellor Says NATO Will Support Ukraine for as Long as Necessary: German Chancellor Olaf Scholz said that NATO allies will continue to help Ukraine defend itself against Russia for “as long and as intensively as it is necessary.” German Defense Minister Christine Lambrecht said Berlin would provide division of 15,000 troops, with 65 planes and 20 ships, to NATO’s high-readiness forces. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-06-29-22/h_099c28e86d5e3396be04bad228fd5d4c).
NATO Formally Invites Finland and Sweden to Alliance: NATO formalized its invitation to Finland and Sweden to the alliance, according to a statement from NATO Heads of State and Government on Wednesday. The statement added, “The accession of Finland and Sweden will make them safer, NATO stronger, and the Euro-Atlantic area more secure.” (https://www.cnn.com/2022/06/29/politics/joe-biden-nato-day-2/index.html).
Bulgaria Expels 70 Russian Diplomats: Bulgaria expelled 70 Russian diplomats over espionage concerns, more than half of Russia’s diplomatic presence in the country. The Foreign Ministry said the decision was designed to bring down the size of Moscow’s mission to that of the Bulgarian representation in Moscow. (https://www.reuters.com/world/europe/bulgaria-expels-70-russian-diplomatic-staff-over-espionage-concerns-2022-06-28/).
Decathlon Temporarily Closes Stores in Russia: Sport equipment company Decathlon announced it would be closing its Russian stores and online shop temporarily due to supply problems. Decathlon imports almost all its product from abroad. Unlike many western companies, Decathlon decided not to pull out of Russia following the invasion of Ukraine. (https://www.retaildetail.eu/news/leisure/empty-shelves-force-decathlon-to-close-in-russia/).
European Steelmakers Continue to Purchase Russian Steelmaking Components: On Tuesday, The Wall Street Journal reported that Russian exports of ferrotitanium, a metallic alloy used to strengthen steel, to Europe increased by 30 percent in March from the previous month, despite industry statements that they would avoid Russian-sourced raw materials. Buyers are attracted by the steep discounts, and as long as the alloy is not sanctioned, they likely will keep buying. (https://www.wsj.com/articles/steelmakers-avoid-russian-components-but-bargain-hunters-swoop-in-11656402338?mod=hp_lista_pos5).
Lithuania’s President Vows To Stick To Kaliningrad Restrictions: Lithuanian President Gitanas Nauseda has stressed that his Baltic country “must” and “will” enforce EU sanctions on Russian goods amid harsh rhetoric from Moscow over Vilnius’s recent restrictions affecting the Russian exclave of Kaliningrad. He called for an “urgent” start to consultations with the European Commission to protect Lithuania’s interests and international obligations in the shadow of sanctions against Ukraine’s “aggressor.” (https://www.rferl.org/a/lithuania-kaliningrad-eu-sanctions-enforce-russia/31915719.html).
Russian Hackers Temporarily Disable Lithuanian Government Websites: On Monday, the websites for the Lithuanian State Tax Inspectorate and the Migration Department were temporarily disabled as a result of a distributed denial of service (“DDOS”) attack. A pro-Moscow hacking group, Killnet, has claimed responsibility for the actions. Russia repeatedly warned Lithuania that the country would “retaliate” in response to Lithuania’s decision to disrupt transportation to the Russian enclave of Kaliningrad. (https://www.nbcnews.com/tech/security/cyberattack-hits-lithuania-sanctions-feud-russia-rcna35488).
Lithuanian PM: Russia Knew About Transit Sanctions and Was Preparing for Them: Russia has known about the sanctions imposed on the transit of goods to the Kaliningrad region since March and has been preparing for them, Lithuanian Prime Minister Ingrida Simonyte says, adding that Moscow’s propaganda attacks are part of an information war. (https://www.baltictimes.com/lithuanian_pm__russia_knew_about_transit_sanctions_and_was_preparing_for_them/).
EU Commission Answers Parliamentary Question of Circumvention: Commissioner McGuinness answered a parliamentary question seeking clarification on how the European Union plans to prevent Russia circumventing sanctions through illegal transactions using dummy companies. The Commission notably recalls that it will conduct a review of practices that circumvent and undermine sanctions which will inform possible legislative proposals or implementation guidelines. (https://www.europarl.europa.eu/doceo/document/E-9-2022-001491-ASW_EN.pdf).
Mandatory Gas Storage Legislation Passes Final Step: The Council has definitively adopted a regulation that provides that underground gas storage on member states’ territory must be filled to at least 80% of their capacity before the winter of 2022/2023 and to 90% before the following winter periods. The text will enter into force the day after its publication in the Official Journal. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/27/council-adopts-regulation-gas-storage/).
France Pushes for Cap on Oil Prices Worldwide: While G7 leaders have been debating a price-cap plan targeting Russian oil exports, the services of the French president confirmed that France is pushing for a cap on oil prices “not only on Russian oil” but that “take[s] into account all market players”. (https://www.politico.eu/article/france-wants-worldwide-cap-on-oil-prices/).
EU Extends Broadcasting Prohibition: The Council of the EU adopted Council Decision (CFSP) 2022/995 and Implementing Regulation (EU) 2022/994 extending the broadcasting prohibitions to three additional entities: Rossiya RTR / RTR Planeta, Rossiya 24 / Russia 24, and TV Centre International. (https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.LI.2022.167.01.0003.01.ENG&toc=OJ%3AL%3A2022%3A167I%3ATOC and https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv%3AOJ.LI.2022.167.01.0001.01.ENG&toc=OJ%3AL%3A2022%3A167I%3ATOC).
Remarks by President Charles Michel before the G7 Summit in Schloss Elmau, Germany: On June 26, 2022, at the opening of the G7 summit in Germany, European Council President Michel stated that G7 discussions will focus on the situation in Ukraine. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/26/remarks-by-president-charles-michel-before-the-g7-summit-in-schloss-elmau-germany/).
Putin’s War Is Forcing Italy to Rethink Its Historic Ties to Russia: The invasion of Ukraine is exposing a fissure over attitudes to Moscow that runs through Italian business, politics and society at large. (https://www.bloomberg.com/news/articles/2022-06-25/putin-s-war-is-forcing-italy-to-rethink-its-historic-ties-to-russia).
Hungary Will Not Discuss Ban on Russian Oil With EU: Speaking over Facebook, Hungarian Foreign Minister Peter Szijjarto said on Monday that “Hungary doesn’t want to hold talks on a gas embargo… That would practically incapacitate our economy and the entire country…” (https://tass.com/economy/1472149)
EU Updates Consolidated FAQ: On June 24, 2022, the European Commission published an updated consolidated version of the frequently asked questions concerning sanctions adopted following Russia’s military aggression against Ukraine. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-consolidated_en.pdf).
EU Publishes First FAQs on Business Services and Trust Services: On June 24, the European Commission published the first version of the FAQs on business services (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-business-services_en.pdf) and trust services (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-trusts-services_en.pdf).
EU Updates FAQs on Oil Imports, Imports and Purchase of Goods, and Road Transport: On June 24, the European Commission published updated versions of the FAQs on oil imports(https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-oil-imports_en.pdf),imports and purchase of goods (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-imports-purchase-goods_en.pdf), and road transport(https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-road-transport_en.pdf).
EU Sanctions Do Not Restrict EU and Third Countries’ Trade in Agrifood Products: The European External Action service published a fact-sheet stating that the EU sanctions do not restrict EU and third countries’ trade in agrifood products. (https://www.eeas.europa.eu/sites/default/files/documents/Food%20security%20fact-sheet_2.pdf).
Germany Considering Nationalizing Nord Stream II Pipeline: On Friday, reports emerged that Germany is considering nationalizing part of the Nord Stream II Pipeline. This would allow the pipeline to connect to a floating LNG terminal that is already connected to Germany’s gas transmission system. German analysts are still working through the legal and political consequences of the action. (https://news.yahoo.com/germany-could-nationalize-part-nord-162000632.html).
Russia Sanctions vs. Recession Risk in Europe: EU States Look to Stem Rising Inflation: Since Russia invaded Ukraine four months ago, the cost of living crisis has become a global issue. Prices have gone up around the world. In Europe, the countries that use the euro saw an average of 8.1 percent inflation in May. Pressure on prices, combined with stuttering economic growth, has sparked fears of a recession. These concerns could still come into play regarding the EU’s response to the Russian invasion of Ukraine. In this program, we’re joined by two MEPs to discuss how the EU should balance sanctions against Russia with the risk of recession. (https://www.france24.com/en/tv-shows/talking-europe/20220624-russia-sanctions-vs-recession-risk-in-europe-eu-states-look-to-stem-rising-inflation).
EU Updates Guidance on Gas and Oil Imports, State-Owned Enterprises, Insurance and Reinsurance, Agricultural Products from Russia and Agricultural Products from Ukraine: On June 22 and 23, 2022, the European Commission updated 5 different FAQs on Russian Sanctions. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#oil).
EU Publishes First Consolidated Guidance of Russian FAQs: On June 23, 2022, the European Commission published a consolidated version of the frequently asked questions concerning sanctions adopted following Russia’s military aggression against Ukraine. This is the first time that all the FAQs are gathered in a single document. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-consolidated_en.pdf).
Uncertainties Regarding the Application of Sanctions to Kaliningrad: Following the decision of Lithuania to ban the transit of goods under EU sanctions from mainland Russia to Kaliningrad, the Commission is said to be working on new guidance that makes clear that Lithuanian customs authorities have to check the goods to avoid sanctions evasion, but can allow onward transport of metals if they are destined for Russia’s internal market. Lithuanian Prime Minister Ingrida Šimonytė insists, however, that the transit ban on steel and ferrous metal through the EU is part of the bloc’s sanctions, as agreed by all 27 members. (https://www.politico.eu/newsletter/brussels-playbook/kaliningrad-simmers-enlargement-hypocrisies-renew-and-bulgaria/).
EU Grants Ukraine, Moldova Candidate Status: On Thursday, the EU announced that it had granted Ukraine and Moldova candidate status for the Union. Ukraine has long sought this status, and the EU’s decision to approve its candidate status is likely in part due to the Russian invasion. (https://www.reuters.com/world/europe/wind-change-europe-path-eu-opens-ukraine-2022-06-23/).
Hungary Pushes for Ceasefire, No Additional Sanctions: Speaking on the sidelines of an EU summit on Thursday, Balazs Orban, a senior aide to Hungarian Prime Minister Viktor Orban stated that the bloc should not seek any more sanctions on Russia, and instead push for Russia and Ukraine to organize a ceasefire and conduct negotiations. He stated, “At the end of the day Europe will be on the losing side of this war because of the economic problems. Our recommendation would be that we should stop the sanction process.” (https://www.reuters.com/world/europe/no-more-eu-sanctions-russia-needed-negotiations-better-option-hungary-2022-06-23/).
12 EU Countries Facing Gas Disruptions: On Thursday, EU Climate Policy Chief Frans Timmermans said that 12 EU countries have been impacted by Russian gas supply cuts through the Nord Stream pipeline. Russia slashed capacity in the pipeline last week, citing difficulties in sourcing equipment due to international sanctions. (https://www.reuters.com/business/energy/russian-gas-cuts-have-hit-12-countries-eu-climate-chief-says-2022-06-23/).
Germany Moves to Gas “Alert Level”: On Thursday, Germany announced that it had moved to its so-called “alert level” of its emergency gas plan. The move means that Germany now seeks a high risk of long-term gas supply shortages. The shift can come when there is “disruption of gas supply or exceptionally high gas demand which results in significant deterioration of the gas supply situation occurs but the market is still able to manage that disruption or demand without the need to resort to non-market-based measures.” (https://www.cnbc.com/2022/06/23/germany-triggers-alert-level-of-emergency-gas-plan-sees-high-risk-of-long-term-supply-shortages.html).
Council of the EU Adopts Conclusions on a Framework for Coordinated EU Response to Hybrid Campaigns: The Council of the EU adopted its non-binding conclusions on a framework for coordinated EU response to hybrid campaigns. While recalling that primary responsibility for countering hybrid threats lies within Member States, the Council identified the main principle that should guide coordinated EU response. The Council notably calls on Member States to develop an efficient monitoring mechanism and to collect relevant early signals and exchange information. Priority should be given to measures aiming to mitigate and terminate the impact of a detected campaign, as well as to prevent its further expansion and escalation. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/21/council-conclusions-on-a-framework-for-a-coordinated-eu-response-to-hybrid-campaigns/).
Ireland Froze 1.72 Billion Euros of Russian Assets: The Department of Foreign Affairs of Ireland announced that Ireland has frozen €1.72 billion of assets linked to sanctioned Russian individuals and entities. This is almost double the €839 million that was contained in an EU document in early April. (https://www.irishtimes.com/business/economy/2022/06/21/ireland-freezes-172bn-of-russian-assets-following-rounds-of-sanctions/).
Council of the EU to Remove Russian Lobbies from Transparency Register: The French presidency of the Council informed national diplomats last week of its intention to have representatives of Russian interests suspended from the EU’s transparency register. Inclusion in the register is a requirement for access to the European Commission, Parliament and Council premises. The European Parliament already banned lobbyists for Russia-based entities earlier this month. (https://www.politico.eu/article/eu-russia-lobbyist-ban/).
Japan Asks EU to “Avert Impact” of Russian Shipping Insurance Ban on Sakhalin Oil: Japan’s Ministry of Economy, Trade and Industry has requested the EU “avert the impact” of Sakhalin equity oil liftings from the EU’s ban on insuring and financing seaborne transport of Russian oil to third countries. (https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/062222-japan-asks-eu-to-avert-impact-of-russian-shipping-insurance-ban-on-sakhalin-oil).
EU to Temporarily Return to Coal Power: On Wednesday, the EU announced a temporary shift back to coal power in response to the sudden decrease in gas flow from the Russian Nord Stream pipeline. Gazprom cut supplies the line by sixty percent over the past week. The head of the International Energy Agency warned that “Europe needs to prepare immediately for the eventuality of Russia turning off all gas exports to the region this winter.” (https://www.reuters.com/business/energy/russian-gas-flows-europe-via-nord-stream-ukraine-unchanged-2022-06-22/; https://www.theguardian.com/business/2022/jun/22/what-if-russia-cuts-europe-gas-exports-winter).
EU to Discuss Gold as New Target of Sanctions: Ahead of the European Council Summit on June 23-24, Reuters reports that gold is a possible new target of EU sanctions against Russia. The European Council is currently split between Member States wanting to push for a 7th package of sanctions and those wanting to focus on implementation of current measures. (https://www.reuters.com/world/europe/eu-leaders-keep-sanction-pressure-russia-gold-flagged-new-target-2022-06-21/).
Russia to Summon EU Ambassador Over Kaliningrad Transit: The Governor of Kaliningrad mentioned that the Russian foreign ministry will summon European Union ambassador to Moscow on Tuesday. This summon follows the decision of Lithuania to ban the transit of goods under EU sanctions from mainland Russia to Kaliningrad. (https://www.reuters.com/world/moscow-summon-eu-ambassador-russia-over-kaliningrad-transit-kaliningrad-governor-2022-06-20/).
African Union Calls on the EU to Ease Food Payments to Russia: Senegalese President Macky Sall, Chair of the African Union called the EU to provide some scope for African states to pay for imported agricultural products. The African Union mainly points to the consequences of the SWIFT ban and request a mechanism as for gas and oil. (https://www.politico.eu/article/african-union-chief-urges-eu-to-ease-food-payments-to-russia/).
Top Advisor to German Chancellor Suggests Focusing on Long-Term Relationship with Russia: German Chancellor Olaf Scholz’s top foreign policy aide suggested Europe should focus more on preserving long-term relations with Russia and less on the specifics of German tank shipments to Ukraine. He also called for a softer approach toward China and argued that Ukraine should not be granted any “rebates” on its bid to become an EU member. (https://www.politico.eu/article/plotner-unplugged-top-germany-adviser-controversy-russia-comments/).
Airbus Calls on International Community to Spare Russian Titanium from Sanctions: On Tuesday, major European aerospace manufacturer Airbus urged the international community to avoid imposing sanctions on Russian titanium, as the company is heavily reliant on the product in its operations and approving new suppliers is difficult. Though Airbus is not the only importer of Russian titanium, American companies Boeing and Raytheon have publicly announced their intent to cease partnerships with Russian titanium providers. (https://www.wsj.com/articles/airbus-calls-on-west-to-avoid-sanctions-on-russian-titanium-11655817028).
German Exports to Russia Drop by Half: Germany’s exports to Russia slumped 50 percent in May compared to the same month last year, as a result of the war and sanctions. Russia was ranked 10th among the most important destinations for German exports outside the EU in May. (https://www.politico.eu/article/german-exports-to-russia-drop-by-half-in-may/).
EU Commission President Calls to End Unanimity in Foreign Policy Decisions: EU Commission President Von der Leyen said to Politico that “In foreign affairs, we really have to move to qualified majority voting”. Van der Leyen acknowledges, however, that such a major shift in EU’s decision-making would be difficult to achieve. (https://www.politico.eu/article/commission-president-ursula-von-der-leyen-end-unanimity-eu-foreign-policy/).
EU Extends Crimea and Sevastopol Sanctions by One Year: On Monday, the Council of the EU extended the sanctions relating to the illegal annexation of Crimea and Sevastopol by one year. These sanctions include restrictions relating to imports of certain products, infrastructure or financial investments and tourism services, and on the exports of certain goods and technologies. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/20/crimea-and-the-city-of-sevastopol-eu-extends-sanctions-over-russia-s-illegal-annexation-by-one-year/).
Council of the EU Adopts Conclusions on Global Food Insecurity: The EU Council adopted non-binding conclusions on global food insecurity, calling for a Team Europe response to the global food insecurity. The conclusions reiterate that there are no EU sanctions on Russian exports of food to global markets. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/20/global-food-insecurity-council-approves-conclusions-on-the-team-europe-response/).
Member States Push for Seventh Sanctions Package, Funds for Ukraine: Reuters reported on Monday that “about one-third of the 27 EU governments, mostly Nordic and eastern states, want the EU Commission to begin work on a seventh round of sanctions.” Draft copies of conclusions obtained by Reuters do not currently indicate new sanctions are coming, but the draft may be revised. In addition, Sweden and Poland are also calling for additional funds to Ukraine through the European Peace Facility. (https://www.reuters.com/world/europe/eu-nations-push-new-russia-sanctions-more-military-aid-ukraine-2022-06-20/).
Top EU Diplomat calls Russian Blockade a “Real War Crime”: Josep Borrell, the EU’s High Representative, called Russia’s blockade of key grain exports from Ukraine a “real war crime” on arrival at a EU foreign ministers meeting in Luxembourg, adding that Moscow would have to be held “accountable” for its actions. (https://www.dw.com/en/ukraine-eu-condemns-real-war-crime-of-russian-grain-blockade/a-62187109).
Germany Conducts First Seizure of Sanctioned Real Estate: Prosecutors in Munich seized three private apartments and a bank account owned by a member of the Russian Duma and his wife on Monday. It is believed to be the first seizure of real estate assets of an individual sanctioned under the new Russia sanctions regime in Germany. The tenants currently occupying the apartments will continue living in the flats, but will pay rent directly to the Munich district court. (https://www.dw.com/en/germany-seizes-first-russian-owned-property-under-sanctions/a-62191796).
Russian Gas Cuts Impact Summer Filling Season: On Monday, The Wall Street Journal looked at the impact recent gas cuts had on European energy companies, noting that the summer months are typically the “filling season,” where energy companies stock up on gas supplies for the winter while demand for heat is low. Given the reduction in Russian gas exports, this filling campaign is going slower than usual, which has led some countries, like Germany, to unveil mitigation strategies even while demand is low. (https://www.wsj.com/articles/less-russian-gas-puts-europes-winter-fuel-supply-in-jeopardy-11655725207?mod=hp_lead_pos10).
Polish Official Calls for Tougher Sanctions on Russia: In a Saturday interview with German newspaper Welt am Sonntag, Poland’s Deputy Foreign Minister Marcin Przydacz said that the sixth EU sanctions package “was not enough to weaken Putin and his military machine sufficiently.” His proposals for a seventh EU sanctions package include a total ban on the export of EU dual use goods to Russia. Polish negotiators are expected to push for a seventh EU package during an EU foreign minister’s meeting on Monday in Luxembourg. (https://www.thefirstnews.com/article/poland-calls-for-tougher-sanctions-on-russia-31142).
Lithuania Bans Transit Through its Territory to Kaliningrad: Lithuania’s national rail service announced on Saturday that it had banned transit through its territory of goods bound for the Russian enclave of Kaliningrad. The Governor of Kaliningrad estimated that the ban, which entered into force on Saturday, would cover 40 to 50 percent of the items Kaliningrad imports from and exports to Russia, and, if it remains in place for a long time, the Governor promised to work with the Russian government to get more ferries to move items from mainland Russia to the enclave. (https://www.aljazeera.com/news/2022/6/18/lithuania-enforces-eu-sanctions-on-goods-to-russias-kaliningrad).
Germany Announces Efforts to Reduce Gas Consumption: As Russia reduces gas shipments to countries across the EU, Germany announced measures to reduce natural gas consumption on Sunday. The country will restart coal-fired power plants and offer incentives for companies to reduce gas consumption. (https://www.wsj.com/articles/germany-steps-up-measures-to-conserve-gas-as-russia-slows-supply-to-europe-11655642717).
Italy Receives Reduced Gas Volumes from Gazprom: On Sunday, Italian energy company Eni announced that it was receiving gas from Gazprom, though at approximately 50 to 65 percent of its requested volumes. (https://tass.com/economy/1468153).
Commission Recommends EU Council to Confirm Ukraine’s EU Candidate Status: On Friday June 17, 2022, the European Commissions issued its recommendation regarding Ukraine’s EU candidate status, and recommended the EU Council to grant Ukraine EU candidate status. A similar opinion was issued regarding Moldova and Georgia. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3790).
EU Updates Guidance on State-Owned-Enterprises: On June 16, 2022, the European Commission updated the FAQ on State-Owned-Enterprises. The Commission added one question on the provision of legal services.https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-state-owned-enterprises_en.pdf).
EU Updates Guidance on Central Securities Depositories: On June 16, 2022, the European Commission updated the FAQ on Central Securities Depositories. The Commission added one question on the Russian National Securities Depository (NSD). (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-central-securities-depositories_en.pdf).
Germany Urges Citizens to Reduce Gas as Gazprom Cuts Supply: On Wednesday, Germany urged its citizens to reduce gas consumption as Russia curbs gas exports through the Nord Stream pipeline due to alleged technical problems. Gazprom also announced that it was experiencing problems with gas supplies to Italy, Slovakia, and Austria. European nations claim these curbs are not due to technical problems, but rather political motivations. (https://www.ft.com/content/9cdd8457-0e5a-4452-af3e-9df7107fd128).
Ukraine Contemplates Suing Russia for Environmental Crimes: Ukraine is gathering evidence and contemplating options to sue the Russian military for environmental crimes committed during the invasion as a potential source to finance reconstruction. Total damage is estimated at 6.6 billion euros. Ukraine could bring the case before its national courts, options before international courts are limited. (https://www.politico.eu/article/how-ukraine-want-make-russia-pay-for-war-environmental-damage/).
French, German, Italian Leaders visit Ukraine: French President, German Chancellor and Italian Council President visited Kyiv and Irpin today. The visit takes place ahead of a meeting of EU leaders next week, to decide whether to grant Ukraine candidate status to join the EU. (https://www.politico.eu/article/macron-scholz-draghi-kyiv-visit-zelenskyy-ukraine/).
Russia Reduces Gas Exports to Germany and Italy: Gazprom announced it was reducing capacity on the NordStream1 pipeline to 60 percent. Italian company ENI also announced on Wednesday that Gazprom had also cut supplies to Italy by 15 percent. (https://www.ft.com/content/1e972cf5-f42b-4ed8-b81b-6969dd91ccfd).
Dutch Court Rules on Termination of Contracts in Russia: A Dutch Court has established that there are legal grounds for Western contractors with outstanding contracts in Russia to terminate their commitments and exit the country, thus offering a defense against future compensation claims by former Russian clients. In a judgement published on June 9 the Rechtbank district court in Amsterdam rejected an appeal from Dutch-registered Saren — acting on behalf of Russian operator Arctic LNG 2 — seeking payment of €39.5 million ($41.2 million). (https://www.upstreamonline.com/lng/dutch-court-paves-way-for-western-contractors-to-exit-russian-lng-projects/2-1-1238544).
Russian Oligarchs Flew Jets in EU Airspace, Despite Ban: On Wednesday, German newspaper Welt am Sonntagreported that at least 30 private jets and helicopters owned by Russian oligarchs have used EU airspace, despite the bloc’s ban on Russian aircraft in its airspace beginning on February 27. Aircraft belonging to Eugene Shvidler, Alexander Zanadvorov, Alisher Usmanov, Albert Avdolyan, Viktor Vekselberg, and Roman Abramovich were found in EU airspace in the research. (https://www.businessinsider.com/russian-oligarch-jets-helicopters-fly-eu-airspace-sanctions-ukraine-war-2022-6).
EU Signs Gas Deal With Israel and Egypt: The EU, Israel and Egypt signed a tripartite natural gas export deal allowing “significant” exports of Israeli gas to Europe. Israeli gas will be brought via a pipeline to Egypt’s LNG terminal on the Mediterranean, where some will be liquefied and transported on tankers to European shores. In January, the EU and Israel already signed a deal for construction of an undersea electricity cable that will link the power grids of Israel, Cyprus and Greece. (EU signs gas deal with Israel, Egypt in bid to ditch Russia | Oil and Gas News | Al Jazeera).
Latvia Reports Over 400 Attempts at Sanctions Evasion: On Wednesday, Ieva Jaunzeme, head of the Latvian State Revenue Service, reported that the country has seen over 400 attempts at sanctions evasion since the start of Russia’s invasion of Ukraine. She said that most of the instances involved falsified contracts to allow otherwise embargoed goods to enter the country. She added that the Service has opened over a dozen criminal cases already based on the information obtained. (https://bnn-news.com/latvian-vid-uncover-more-than-400-attempts-to-breach-sanctions-against-russia-and-belarus-235494).
Ikea Announces Closure of Russia Business: On Wednesday, Swedish furniture company Ikea announced that it would sell factories, close offices, and reduce its workforce in Russia amid restrictions and supply chain issues, although it will pay its employees through August. Ingka Group, which owned IKEA stores in Russia, will keep its separately branded “MEGA” malls open. (https://www.reuters.com/business/retail-consumer/ikea-further-scale-down-operations-russia-2022-06-15/).
EU Updates Guidance on Imports and Purchase of Goods: On June 14, 2022, the European Commission updates the FAQ on imports purchase of goods. The Commission added three questions on goods not transiting through the EU and goods already released for free circulation in the EU. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-gas-imports_en.pdf).
Germany Struggles Over Schwedt Refinery: The German government is considering temporarily handing control of the Schwedt refinery’s day-to-day operations to British oil major Shell or handing operations to Polish refinery PKN Orlen. Schwedt provides most of Berlin’s fuel and is majority owned by Russian oil giant Rosneft. (https://www.reuters.com/business/energy/exclusive-germanys-refinery-dilemma-tests-russian-oil-ban-resolve-2022-06-14/).
Germany to Lend up to $10.4 billion to Rescue Ex-Gazprom Unit: Bloomberg reported Tuesday that the German government will lend as much as 10 billion euros ($10.4 billion) to rescue a former arm of Gazprom PJSC, which was brought under the control of the German energy regulator in April. The plan includes a loan from state-owned KfW Group, which could eventually be converted into a direct stake under a new form of trusteeship. The name of the company will change to Securing Energy for Europe GmbH. (https://www.bloomberg.com/news/articles/2022-06-14/germany-to-lend-up-to-10-4-billion-to-rescue-ex-gazprom-unit?srnd=premium).
Natural Gas Surges in Europe Amid Lower Russian Supply and U.S. LNG Delay: Benchmark futures jumped as much as 21% Tuesday when Gazprom announced it would reduce the flow of natural gas through the Nord Stream pipeline by 40%. After a fire broke out at the Freeport LNG terminal in Texas last week, the operator is now reporting that it may take 90 days for the facility to partially restart. Full capacity won’t return until late 2022, exacerbating concerns in Europe over the fragile energy market. (https://www.bloomberg.com/news/articles/2022-06-14/european-gas-prices-rise-as-fluctuating-flows-stoke-supply-fears?srnd=premium).
EU Seeks Expanded Energy Partnership with Israel: EU Commission President con der Leyen and Italian Prime Minister Draghi met with Israeli officials Tuesday as they sought to strengthen energy ties and reduce Europe’s reliance on Russian gas. The parties discussed two major energy projects with Israel: a power cable connecting Israel with Cyprus and Greece, and a pipeline for natural gas and hydrogen in the eastern Mediterranean. (https://www.bloomberg.com/news/articles/2022-06-14/european-union-working-to-forge-gas-and-power-ties-with-israel?srnd=politics-vp).
EU Issues Guidance on Execution of Prior Contracts: On June 13, 2022, the European Commission issued an FAQ on the execution of prior contract exemption under the Russian sanctions schemes. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-execution-prior-contracts_en.pdf).
Italy Is Considering the Nationalization of Lukoil Refinery: Lukoil’s refinery in Sicily could be severely impacted by the EU’s oil ban. Italian Ecological Transition Minister Roberto Cingolani said that “there are several options under study, one is something like nationalisation…another one is that an external buyer intervenes, for example.” (https://www.euractiv.com/section/energy/news/italy-minister-says-nationalisation-an-option-for-lukoil-refinery/).
EU Court Expected to Give Interim Ruling on EU Sanctions Against Alisher Usmanov: The Guardian reports that the Court of Justice of the European Union will render an interim decision on whether to suspend sanctions against Russian Oligarch Alisher Usmanov within the next two weeks. A final ruling that is likely to be made by the end of the year. (https://www.theguardian.com/business/2022/jun/08/eu-sanctions-alisher-usmanov-sisters-could-be-lifted-ecj-putin).
French, Italian, German Leaders Planning to Visit Ukraine This Week: On Sunday, sources within their respective governments stated that French President Emmanuel Macron, German Chancellor Olaf Scholz and Italian Prime Minister Mario Draghi were planning to visit Kyiv on Thursday, though they stressed that plans may change. The trip would be the first to Ukraine since the beginning of the war for the three Western leaders. (https://www.wsj.com/articles/russia-shells-chemical-plant-sheltering-civilians-ukraine-says-11655031115).
Lithuania Opens Cultural Center for Displaced Ukrainians: On Sunday, The New York Times reported that Lithuania has opened a “cultural center” for displaced Ukrainians living in the country. The center will offer education, career and psychological services, as well as recreation and child care. (https://www.nytimes.com/live/2022/06/12/world/russia-ukraine-war-news/a-new-cultural-center-in-lithuania-for-ukrainians-seeks-to-preserve-the-nations-vitality?smid=url-share).
Hungary says Russian Gas Ban Not in Next Sanction Package: Hungarian Foreign Minister Peter Szijjarto ruled out the possibility of including a Russian gas ban in the new package of sanctions of the EU, saying it would be “impossible.” (https://www.cnbc.com/2022/06/10/russian-gas-ban-hungary-says-eu-cant-impose-a-gas-ban-on-russia.html).
Clearstream Stops Russian Share Conversions: Clearing company Clearstream (part of the Deutsche Boerse) halted requests to convert Russian firms’ depository receipts into Moscow listed shares as a result of EU sanctions. Customers will not see any instructions, either new or already pending, related to Russian depository receipt conversions processed. (https://finance.yahoo.com/news/clearstream-halts-russian-share-conversions-112105150.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAA8BuIKKTLiDdrfE40tcd4gjxTxAZE4Ddfd5GyriPQRRKU8wKcLpwFnax4tlo_9t_Ok087VONKXjU1bmwHBUBG2Y7q3g2070t3kfHMvYv_veRJg5PEa_rnQt6wHFIRyAxBnrgSYBfu7K1awJU6SwzznLcx2OFJdJ25BdC7Glz93e).
Serbian President Does not Believe EU Sanctions are Efficient: Responding to calls implement EU sanctions, Serbian President Aleksandar Vucic said he did not believe sanctions to be “efficient.” German Chancellor Olaf Scholz visited Serbia on Friday, where he pressured the country, which is currently a candidate for EU membership, to implement sanctions on Russia similar to those in place in the EU. (https://www.reuters.com/world/europe/scholz-heads-western-balkans-help-eu-membership-bid-2022-06-10/).
President Von Der Leyen Visits Kyiv: On Saturday, European Commission President Ursula Von Der Leyen visited Kyiv. In joint press availability with Ukrainian President Volodymyr Zelenskyy, she focused on the EU’s commitment to rebuilding Ukraine, but the underlying purpose of the visit was to discuss Ukraine’s bid for EU membership. (https://ec.europa.eu/commission/presscorner/detail/en/statement_22_3622; https://www.politico.eu/article/ursula-von-der-leyen-ukraine-europe-membership-russia-war/).
European Parliament Adopts Foreign Strategy Following the War in Ukraine: The European Parliament adopted a non-binding recommendation on the EU’s Foreign, Security and Defence Policy after the Russian war of aggression against Ukraine. Members of the European Parliament (MEPs) notably recommend introducing qualified majority voting for the adoption of EU personal sanctions regimes. MEPS also recommend to bring the UK into a framework for common cooperation on defence and foreign policy matters. (https://interfax.com.ua/news/general/837995.html).
EU Announces €205 Million in Humanitarian Aid: Today, the EU announced another €205 million in humanitarian assistance for Ukraine. The announcement came while the Commissioner for Crisis Management, Janez Lenarčič, was visiting Ukraine. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3549).
EU Sets Up €20 Million Support Fund for Ukrainian Start-Ups: The European Commission launched a €20 million action to support Ukrainian start-ups through an amendment of the 2022 European Innovation Council (EIC) work program. The new initiative will support at least 200 Ukrainian deep tech start-ups with up to €60,000 each. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3533).
Committee Defers Decision on Russian Credit Default Swaps: The EMEA Credit Derivatives Determinations Committee said Thursday that it would defer its decision on how to hold a potential auction on Russian credit default swaps following an update on U.S. sanctions by the Treasury Department earlier this week with the goal of allowing “credit derivatives market participants time to assess the implications that the updated OFAC (Office of Foreign Assets Control) FAQs may have on the ability of market participants to participate in an auction.” (https://wtvbam.com/2022/06/09/committee-defers-decision-on-russia-cds-auction-after-u-s-sanctions-update/).
Luxembourg froze 4.2 Billion Euros in Russian Assets: Luxembourg Minister of Finance announced that the country froze 4.2 billion euros in Russian assets. According to the Grand-Duchy, 90 people and 1,100 legal entities were identified and sanctioned by Luxembourg. (https://www.law360.com/corporate-crime-uk/articles/1500682).
Freeze and Seize Task Force will Investigate Tax Fraud: The Commission announced the establishment of a group within the Freeze and Seize Task Force to help discover possible tax crimes and recover unpaid taxes as part of the effort to sanction Russia and Belarus. (https://www.law360.com/tax-authority/articles/1500722/eu-sets-up-group-to-audit-sanctioned-russians).
President of European Council Reports to Parliament after Addressing the UN Security Council: European Council President Charles Michel addressed the plenary session of the European Parliament after his speech before the UN Security Council. The President addressed the food crisis and reiterated that the EU did not impose sanctions on agricultural products. Charles Michel also mentioned the financing needs of Ukraine and said that Russia should pay to rebuild the country and said the EU is looking into the possibility of confiscating assets of sanctioned Russian individuals and entities. Finally, President Michel stated that the Commission is considering the possibility of trying to lower the gas price by capping it. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/08/report-by-president-charles-michel-to-the-european-parliament-plenary-session/).
EU Updates Russia Sanctions Guidance on State-Owned-Enterprises: On June 8, 2022, the European Commission updated its Russian Sanctions Guidance on state-owned enterprises. The Commission added a question relating to the application of the wind down period. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-state-owned-enterprises_en.pdf).
EU Commits 7.25 Million Euros to Support ICC Investigations: The European Commission launched a new project to support the investigating capacities of the International Criminal Court with 7.25 million euros to help the ICC respond to the ongoing investigations into war crimes committed by Russia in Ukraine. (https://ec.europa.eu/commission/presscorner/detail/en/MEX_22_3542).
Uncertainties on the Violation of the Blocking Statute After Greece Seized Russian Vessel:Legal uncertainties arise following the decision of the Greek authorities to seize a Russian ship transporting Iranian oil. The ship was released following a change in ownership, but Greek courts granted a request from the U.S. Department of Justice to transship the oil to an American ship in application of U.S. sanctions. Euractiv wonders if this amounts to a violation of the Blocking Statute. The EU Commission stated it does not have enough information to take position. (https://www.euractiv.com/section/politics/short_news/commission-greece-lost-in-translation-over-seizure-of-russian-ship-transferring-iranian-oil/).
EU Commission Answers Parliamentary Question on SME Support: The European Commission replied to a question from a Member of the European Parliament regarding the support to SMEs affected by the Ukrainian crisis. Commissioner Breton recalled the existence of the Temporary Crisis Framework adopted in March 2022 and of the Recovery and Resilience Facility. There are no plans for additional financial support for businesses affected by this crisis from other EU programs, he stated. (https://www.europarl.europa.eu/doceo/document/E-9-2022-000826_EN.html).
Two Actions for Annulment of Belarussian Sanctions Brought Before EU Courts: Alexander Evgenevich Shartov and company Synesis TAA, both of which are sanctioned under EU restrictive measures against Belarus, lodged actions for annulment before the General Court of the European Union. (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62022TN0215&from=EN).
Commission Answers Parliamentary Question on Media Ban: The European Commission confirmed that only companies mentioned in Annex XV to Regulation 833/2014 will see their license suspended. However, transactions with companies associated with sanctioned individuals such as Yandex can be affected and operators need to exert appropriate due diligence when dealing with them. (https://www.europarl.europa.eu/doceo/document/E-9-2022-001234_EN.html).
EU High Representative Answers Question on Russia Arm Embargo: EU High Representative Josep Borell, on behalf of the Commission, clarified that the exemption for pre-2014 contracts from the arm embargo was deleted by the Council and that arms exports, beyond the arms embargo in place, are subject to the Common Position of December 8, 2008. (https://www.europarl.europa.eu/doceo/document/E-9-2022-001537-ASW_EN.pdf).
Serbia Stops Receiving Russian Oil: Following the EU’s import ban on Russian oil, Serbian oil company NIS will no longer receive Russian oil from the Adriatic oil pipeline supplied by tanker via a Croatian harbor. (https://www.euractiv.com/section/energy-environment/news/eu-sanctions-fallout-serbia-to-stop-receiving-russian-oil-via-adriatic-pipeline/).
France Turns to UAE for Russian Oil Alternatives: French Finance Minister said that France is in discussions with the UAE regarding the supply of oil and diesel as an alternative to Russian oil. (https://www.politico.eu/article/le-maire-france-oil-russia-embargo-inflation/).
Deutsche Bank Offers to Relocate Russian Employees to Berlin: The Wall Street Journal reported Tuesday that Deutsche Bank had offered nearly 1500 employees from its technology center in Russia the opportunity to move with their families to Berlin. According to the report, about half of those given the offer accepted it. Deutsche Bank has not said publicly what it plans to do with the Russian center and the staff who will stay there, but it did note in March that it would be winding its Russian operations down. (https://www.wsj.com/articles/deutsche-bank-moves-hundreds-of-employees-from-russia-to-berlin-11654599210).
Cypriot Services Sector Struggling to Understand EU Sanctions Exemptions: The services sector, as well as the Ministry of Finance, in Cyprus are reportedly working to understand the EU’s sixth tranche of sanctions on Russia, including the prohibition on the provision of auditing, accounting, business, administrative, and PR services to Russian entities. So far, it seems, the sanctions do not apply to the provision of services intended for the exclusive use of legal persons, entities or bodies established in Russia that are owned or controlled exclusively or jointly by a legal person, entity or body which is incorporated or constituted under the law of a Member State. The sector is trying to understand whether the exemption – a company established in Cyprus by Russians which in turn established another company in Russia – applies to Cypriot companies established by Russian entities. (https://cyprus-mail.com/2022/06/07/cypriot-services-sector-still-grappling-with-russian-sanctions-impact/).
Investigation Shows European Companies Increased Purchases of Russian Oil:According to an investigation from Global Witness, Greek, Cypriot, and Maltese shipping firms have increased their shipments of Russian oil since the invasion of Ukraine began. Investigators are skeptical that the recently announced EU ban on Russian oil will change the situation, saying that European shipping companies are still permitted to ship Russian oil to non-EU ports even with the new restrictions.(https://www.independent.co.uk/news/business/russia-ukraine-oil-sanctions-shipping-b2092658.html).
Council President Blames Russia for Food Crisis: Speaking to the UN Security Council on Monday, European Council President Charles Michel blamed Russia for the impending food crisis due to the war in Ukraine. He stressed that the EU has no sanctions on the agricultural sector, and that Russia could ship grain to non-EU nations if it wanted to. (https://www.consilium.europa.eu/en/press/press-releases/2022/06/06/address-by-president-charles-michel-at-the-un-security-council-on-peace-and-security-in-ukraine/; https://www.politico.eu/article/at-un-michel-blames-russia-for-food-crisis/).
EU Sanctions Impact “Google of Russia”: In response to EU sanctions, Arkady Volozh promptly resigned from his position as CEO and board member of Yandex NV, Russia’s most popular search engine known colloquially as the “Google of Russia.” Volozh does not own shares in Yandex directly, instead depositing his shares in a family trust after a 2019 restructuring. Though he called the sanctions “misguided,” he promised to not give directions to the trust after his designation. (https://www.bloomberg.com/news/articles/2022-06-06/the-internet-pioneer-brought-low-as-kremlin-ally-by-eu-sanctions).
Melnichenko’s Wife Plans to Contest EU Sanctions: According a statement provided to Reuters on Saturday, Aleksandra Melnichenko, wife of sanctioned Russian oligarch Andrey Melnichenko, plans to “vigorously contest the unfortunate decision” by the EU to impose sanctions on her. Aleksandra is not a Russian citizen, but the EU sanctioned her because she “takes good advantage of the fortune and benefits from the wealth of her husband.” Andrey has already sued to contest the sanctions against him in EU courts. (https://www.reuters.com/world/europe/wife-russian-billionaire-melnichenko-contests-eu-sanctions-2022-06-04/).
German Press Expects Taxpayers to Pay 5 Billion More for Gas Due to Sanctions:In a survey of industry representative, German weekly Welt am Sonntag reports that German taxpayers can expect to pay 5 billion euros more in gas payments as a result of sanctions on Russia. Though the paper reported that gas supplies were not at risk, prices would increase as the German government replaces Russian gas with gas purchased on the spot market. (https://www.reuters.com/business/energy/germany-faces-5-bln-euros-year-hit-russian-gas-sanctions-newspaper-2022-06-05/).
EU Considering Options to Reduce Energy Consumption: The Wall Street Journal on Sunday reported on European efforts to reduce energy consumption. These efforts included French subsidies to homeowners to renovate their homes in a more energy-efficient manner, and bloc-wide efforts to switch from gas heating systems to electric heating systems. Still, members of European parliament warn that these efforts will take time and require significant investment. (https://www.wsj.com/articles/ukraine-war-drives-europe-to-accelerate-energy-efficiency-11654434181).
EU Adopts 6th Sanctions Package: the EU has adopted its 6th sanctions package against Russia, which notably consists of:
o Asset freeze measures against members of the Russian armed forces, officials, media personalities, oligarchs, family members of previously designated individuals and entities involved in the industrial and technological sectors.
– Grounds for authorization have been introduced for the provision of electronic communication services under certain conditions.
o A prohibition on the purchase, import, or transfer of crude oil or petroleum products originating in or exported from Russia and the provision of related services.
– Exemptions apply for:
– One-off transactions and for contracts concluded before June 4, 2022, until December 5, 2022 for crude oil and until February 5, 2022 for petroleum products, subject to notification requirements.
– Seaborne crude oil and petroleum departing or transiting through Russia provided the origin and owner of the goods are non-Russian.
– Crude oil delivered by pipeline (restrictions are foreseen on the transfer, transport or sale of crude oil delivered by pipeline into a Member State)
– For landlocked Member States if the supply of crude oil by pipeline is interrupted for reasons outside the control of that Member State.
– If required in order to meet the essential need of the purchaser in Russia or of humanitarian projects in Russia.
– Croatia and Bulgaria have longer phase-out periods.
o A prohibition on services related to the transport to third countries of crude oil and petroleum products originating in or exported from Russia.
– Exemptions apply (i) until December 5, 2022 for contracts concluded before June 4, 2022 and (ii) for oil and petroleum products departing or transiting through Russia provided the origin and owner of the goods are non-Russian.
o Extension of the list of entities for which enhanced dual-use controls apply.
o Extension of the list of items subject to controls to cover certain electronics, chemicals, and material processing items, spirits and liqueurs and heading 2303.
o Addition of exemptions for transactions with state-owned/related entities.
o Prohibition on the provision of financial messaging services (SWIFT) to Sberbank, Credit Bank of Moscow and JSC Russian Agricultural Bank and the entities in Russia they own for more than 50%, as of June 14, 2022.
o Prohibitions on the provision of accounting, auditing, including statutory audit, bookkeeping, or tax consulting services, or business and management consulting or public relations services to the Government of Russia and entities established in Russia, subject to exemptions and derogations.
o Derogation to allow for the granting of authorizations for deposits or the provision of wallet, account or custody services intended exclusively for the payment of fees or service charges for the routine holding or maintenance of frozen funds or economic resources.
o Extension of the derogations relating to the sale of transferable securities denominated in an EU currency to EEA and Swiss nationals and residents.
o The entry into force of prohibitions affecting trusts at an earlier date.
o Extension of the broadcasting prohibition to three additional entities and the advertising of products or services.
o Enforcement provisions clarify that Member States shall have criminal penalties, as appropriate, and provide for appropriate measures of confiscation of the proceeds of sanctions infringements.
o Belarussian sanctions have been reinforced with inter alia additional individuals and entities subject to asset freeze measures, reinforced trade controls, prohibition of financial messaging services to Belinvestbanks and the entities in Belarus it owns for more than 50 percent as of June 14, 2022.
See the press release and Q&A:
https://ec.europa.eu/commission/presscorner/detail/en/IP_22_2802
https://ec.europa.eu/commission/presscorner/detail/en/qanda_22_2823
See the legal texts:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L:2022:153:TOC
EU, Israel, and Egypt Near Deal on Natural Gas: Bloomberg reports that the EU is set to sign an agreement this month with Egypt and Israel to supply the bloc with natural gas amidst its efforts to reduce its dependence of Russian supplies. The memorandum of understanding outlining the terms of the arrangement is set to be signed when EU Commission President Ursula von der Leyen visits Cairo at the end of June. The deal will include Israeli natural gas being liquefied in Egyptian processing plants with the final product being shipped to the EU. (https://www.bloomberg.com/news/articles/2022-06-03/eu-egypt-near-gas-supply-deal-in-shift-away-from-russia).
Finland Cuts Russian Power Link: Finish utility company Fortum Oyj has disconnected the interconnector between Imatra in Finland and Svetogorsk in Russia until further notice, following the failure of the Finish company to pay RAO Nordic Oy, a subsidiary of Russian energy company Inter RAO, on May 14. (https://tass.com/economy/1460299).
Luxembourg Prime Minister Criticizes Hungary’s Success in Removing Russian Orthodox Patriarch Kirill from Sanctions List: Speaking to the pan-European ALDE group on Friday, Luxembourg Prime Minister Xavier Bettel criticized Hungary’s success in the removal of Patriarch Kirill from the latest sanctions list as “not acceptable.” (https://www.reuters.com/world/europe/concessions-hungary-sanctions-not-acceptable-luxembourgs-pm-says-2022-06-03/).
Roman Abramovich and Other Russian Oligarchs Suing the EU Over Sanctions:POLITICO reported that at least 20 of Russia’s most powerful oligarchs are filing cases against the European Union to unfreeze their assets and unblock their visas, based on filings at the EU General Court. (https://www.politico.eu/article/roman-abramovich-sue-eu-sanctions-assets-visas-vladimir-putin-russia-war-ukraine-mikhail-fridman-petr-aven-alisher-usmanov/).
Hungary Blocks Sanctions Against the Head of the Russian Orthodox Church: After obtaining concessions on the Russian oil embargo, Hungary objected to the proposal to sanction the head of the Russian Orthodox Church Patriarch Kirill. The objection comes as a surprise as an agreement on sanctions was expected to be reached in Council after the EU Leaders’ summit agreed on the oil embargo. (https://www.politico.eu/article/hungary-throws-in-new-spanner-in-sanctions-discussions/).
EU Updated Russia Sanctions Guidance on Public Procurement: On June 1, 2022, the European Commission updated the Russian Sanctions Guidance on Public Procurement. The Commission updated a question on the types of public procurement covered by sanctions. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-public-procurement_en.pdf).
Dutch National Coordinator on Sanctions Presents His Report: This week the Dutch Coordinator for the implementation of sanctions Stef Blok presented his report to the Dutch Parliament. The report calls for the sharing of information between Member States on ultimate beneficial owners and for a protocol on how to deal with operating companies in Europe. The report also calls on the Commission to share information with authorities ahead of the publication of the official sanctions list to prevent the moving of funds before publication. (https://www.government.nl/documents/reports/2022/06/02/report-by-the-national-coordinator-for-sanctions-compliance-and-enforcement).
Multiples Actions Against EU Sanctions Before EU Courts: Politico reported that twenty businessmen, politicians, and other individuals connected to the Kremlin are suing the Council of the EU before the General Court of the EU after having been sanctioned following the invasion of Ukraine. It will take years before the General Court rules on the applications. (https://www.politico.eu/article/more-than-20-of-putins-allies-fight-back-against-eu-sanctions/).
Russian Lobbyists Banned from European Parliament:European Parliament President Roberta Metsola announced that Russian company representatives may not enter Parliament buildings “effective immediately.” The ban will apply to all entities that are established in the Russia Federation and that are listed in the EU transparency register as well as entities subject to EU sanctions. (https://www.politico.eu/article/european-parliament-bars-russia-backed-lobbyists/).
EU Pushes Back on Allegations that EU Sanctions Threaten Food Security: EU Commission President Ursula von der Leyen recalls that the EU has no sanctions on food and agricultural products after Macky Sall, President of Senegal and Chair of the African Union raised concerns in an address to EU leaders. The EU and the African Union agreed on a message that puts the blame for disruptions to food supply on Russian President Vladimir Putin. (https://www.euractiv.com/section/global-europe/news/eu-steps-up-efforts-to-debunk-putins-food-security-propaganda/).
Italian Oil Imports from Russia Surge: AP News reported Wednesday that Italy has become the only country in Europe to increase Russian imports, despite the imposition of an oil embargo by the EU, as a consequence of the country’s need to protect one of its largest refineries. (https://apnews.com/article/russia-ukraine-politics-economy-global-trade-b0c193007210592123112e2db1069461).
EU Working on a Ban on Russian Oil Insurance Services: The EU is said to be working with G7 members to coordinate a ban on providing the insurance services needed to ship Russian oil to any destination. Bloomberg reports that the European Commission is in talk with the UK on this issue. (https://www.bloomberg.com/news/articles/2022-06-01/europe-seeks-g-7-coordination-on-russian-oil-insurance-ban).
EU Updated Russia Sanctions Guidance on Credit Rating, Deposits, Insurance and Reinsurance and State-Owned Enterprises and Customs: On June 1, 2022, the European Commission updated the Russian Sanctions Guidance on credit rating, deposits, insurance and reinsurance and state-owned enterprises and customs. The Commission added questions for credit rating relating to scoring services, credit rating on Russian entities, rating services for third parties, and the application of credit rating provisions to persons with a temporary residence permit outside of Russia. Other questions on insurance and reinsurance relate to exemptions for subsidiaries in Switzerland and EEA countries, reinsurance of export receivables on the basis of export/insurance contracts. For state-owned enterprises, the Commission provided an interpretation of the notion of “acting on behalf or at the direction of”, and of the exception provided in Article 5aa(2) of Council Regulation (EU) 833/2014. Finally, for customs, the Commission replied to questions on the return of cultural goods, daily crossing of Russian borders, and the definition of agricultural products. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en#customs).
EU Updated Russia Sanctions Guidance on Circumvention and Due Diligence: On May 31, 2022, the European Commission updated the Russian Sanctions Guidance on circumvention and due diligence. The Commission added a question on the authority responsible for interpreting anti-circumvention provisions. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-circumvention-due-diligence_en.pdf).
Denmark Holds a Referendum on Participation to EU’s Common Defense Policy: On June 1, 2022, Danes voted on the participation of Denmark to EU’s common defense policy. Denmark currently benefits from an opt-out and does not participate in EU’s foreign policy where defense is concerned, and does not contribute troops to EU military missions. Polls suggest that a strong majority of Danes will vote in favor of joining EU’s common defense policy. (https://www.euronews.com/2022/06/01/denmark-to-vote-on-europe-common-defence-opt-out-in-wake-of-ukraine-war).
EU Opens Door to Billions in Aid to Poland: The New York Times reported Wednesday that the EU’s executive arm had endorsed a Polish plan to address the EU Commission’s concerns over the politicization of its judiciary which would in turn lead to the disbursement of $38 billion in assistance. If the plan is approved, Polish officials expect the first tranche to be paid by September. (https://www.nytimes.com/2022/06/01/world/europe/poland-eu-ukraine-coronavirus.html?).
EU Leaders Agree on Russian Oil Embargo: European leaders agreed on a Russian oil embargo with a temporary exemption for pipeline imports to help landlocked states. EU officials reported that if Hungary did not commit to a cut-off date, tariffs on oil could be imposed without requiring unanimity in Council. The exemption could be a potential source of distortion to the single market with exempted-countries enjoying cheaper oil than others. Details of the embargo still need to be discussed and adopted by the Council. (https://www.ft.com/content/065d9946-b762-448b-9ab4-f1f213896d4a).
EU Summit Adopts Conclusions on Ukraine: The highly-awaited European Council conclusions mention (i) the need to gather evidence and to investigate crimes committed in Ukraine, (ii) the upcoming oil embargo, (iii) the need to continue to support Ukraine with a view to addressing humanitarian, liquidity and reconstruction needs (iv) the commitment of the EU to continue bolstering Ukraine’s ability to defend itself. The conclusions also address the question of the economic and political support and the impact on neighboring countries. (https://www.consilium.europa.eu/en/press/press-releases/2022/05/31/european-council-conclusions-on-ukraine-30-may-2022/).
Gas Unlikely to be Part of a New Round of Russian Sanctions: While Baltic States and Poland want to phase-out Russian gas supplies, Estonian Prime Minister says she does not expect to see gas in the next set of sanctions as it would have an effect on Europeans. Austrian chancellor also made similar remarks. (https://www.theguardian.com/world/2022/may/31/eu-leaders-say-gas-unlikely-to-be-part-of-new-round-of-russia-sanctions).
Sberbank Said to be Cut from SWIFT Under 6th Sanction Package: Bloombergreported that Russia’s biggest lender Sberbank will be cut from SWIFT under the upcoming 6th sanction package. (https://www.bloomberg.com/news/articles/2022-05-31/russia-s-biggest-lender-sberbank-targeted-in-eu-sanctions-plan?srnd=premium-canada).
Russia Cuts Gas Supply to the Netherlands, Denmark and Germany: Energy company Gazprom halted gas supply to the Dutch company GasTerra, Danish company Ørsted and Shell Energy for its contract to supply Germany. The decision follows the imposition of an oil embargo by the EU and the failure of Ørsted and Shell Energy to make payment in Rubles. GasTerra already found alternative supply sources while Ørsted said that a gas cut would not immediately put the country’s gas supplies at risk. (https://www.theguardian.com/world/2022/may/31/russia-cuts-gas-supplies-dutch-state-trader-sanctions-war).
EU Power Prices Reach a New High: On Tuesday, Europe’s benchmark price for power reached its highest level for 2022. In Germany, power prices for 2023 reached their highest level ever. EU’s energy storage levels are 46% full which is also a 2022 high. (https://markets.businessinsider.com/news/commodities/european-power-prices-hit-new-highs-russia-gas-cutoff-sanctions-2022-5).
Croatian President Does Not Believe EU Sanctions are Effective: Croatian President Zoran Milanovic seems to believe that an all-out energy embargo against Russia is necessary. On sanctions he stated that “perhaps one day, they will start producing some effect. Currently, neither has the rouble depreciated nor is Russia feeling the financial effects”. (https://www.total-croatia-news.com/politics/63263-croatian-president-does-not-believe-that-eu-sanctions-have-any-effect).
France Not Ruling out More Sanctions Against Russia: French President Emmanuel Macron stated on May 31, 2022 that, following a sixth European Union package of sanctions against Russia, nothing could be ruled out in terms of additional sanctions in the coming weeks. (https://www.reuters.com/world/europe/frances-macron-says-not-excluding-anything-about-additional-eu-sanctions-against-2022-05-31/).
Abramovich Contests EU Sanctions Before EU Court: Roman Abramovich filed a lawsuit before the General Court of the European Union following his inclusion on the list of individuals subject to an asset freeze. Abramovich holds a Portuguese passport and was forced to sell Chelsea football club after being sanctioned. (https://www.washingtonpost.com/sports/soccer/sanctioned-abramovich-files-lawsuit-at-eu-general-court/2022/05/31/d060cd16-e0f8-11ec-ae64-6b23e5155b62_story.html).
EU Updated Russia Sanctions Guidance on Credit Rating: On May 31, 2022, the European Commission updated the Russian Sanctions Guidance on Credit Rating. The Commission added two new questions on intragroup credit rating. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-credit-rating_en.pdf).
EU Commission Replies to Parliamentary Question on Aid to Rail Transporters Supporting Humanitarian Work in Ukraine: On May 30, 2022, Commissioner Vălean provided a written reply to a question from a Member of the European Parliament. In its reply, the Commission notably recalls that it adopted the Temporary Crisis Framework which recognizes that the transport of refugees and humanitarian aid do not fall in principle under EU state aid rules. (https://www.europarl.europa.eu/doceo/document/P-9-2022-001120_EN.html).
EU Commission Replies to Parliamentary Question on Implementation and Enforcement of EU Sanctions Against Russia: On May 30, 2022, Commissioner McGuinness provided a written reply to a question from a Member of the European Parliament. In its reply, the Commission notably recalls that it has set up a Freeze and Seize Task Force to ensure coordination of Member States activities in enforcing EU sanctions. (https://www.europarl.europa.eu/doceo/document/P-9-2022-001348_EN.html).
EU Launches Platform for Registration of Individuals Fleeing Ukraine: The European Commission launched a platform to register individuals fleeing Ukraine so they can enjoy their rights in all Member States while addressing instances of double or multiple registrations and limiting possible abuse. (https://ec.europa.eu/commission/presscorner/detail/en/mex_22_3384).
Tourism-Heavy Countries Brace for Summer Without Russian Tourists: On Tuesday, Al Jazeera profiled the tourism industries in Greece, Cyprus, and Turkey, popular destinations for Russian tourists that are now more difficult to access due to Russian visa restrictions. Hoteliers in Greece saw a limited drop in bookings, saying that UK tourists have largely replaced Russian tourists. Turkish authorities were less optimistic, saying that reduced purchasing power by Russian tourists would lead to $3-4 billion in losses in tourism revenue. Cypriot representatives focused on secondary effects of lost tourism, noting heavy investment in the Cypriot economy by Russians. (https://www.aljazeera.com/news/2022/5/31/tourist-destinations-gear-up-for-summer-without-russian-visitors).
Deal Reached on Russian Oil Embargo and Sixth Sanctions Package: On Monday night, European Council President Charles Michel tweeted that the Council had reached a deal to ban Russian oil imports to the EU. The move will immediately cover 2/3 of Russian oil imports to the EU. He added that the new package will include a de-Swifting of Sberbank, a ban on three Russian state owned broadcasters, and sanctions on individuals responsible for war crimes in Ukraine. Though full details of the deal are not clear, Michel’s tweet likely refers to a carveout from the ban on Russian oil imports for oil transported through pipelines, which represents 30% of EU imports. Hungarian Prime Minister Viktor Orban, said the idea was “not bad,” but wants insurance from the EU in case anything happens to the pipeline delivering oil to Hungary. It is unclear if EU leaders will adopt the text as proposed during the European summit (ending on Tuesday) or leave the issue entirely to the Council of Ministers.(https://twitter.com/eucopresident/status/1531391899218608133?cxt=HHwWioCwzbK0zMAqAAAA; https://www.politico.eu/article/eu-moves-step-closer-to-deal-on-russian-oil-embargo/).
EU to Consider Ways to Bypass Russian Food Export Blockade: The European Council is said to be discussing the consequences related to the difficulties in exporting food commodities. EU diplomats mentioned to Euractiv that the Council wishes to tackle the spillover effect in the Maghreb countries and in the Middle East. EU leaders are considering all available ways including a naval mission to escort cargo ships, but the lifting of the sanctions is off of the table. (https://www.euractiv.com/section/agriculture-food/news/eu-leaders-to-consider-all-available-ways-to-bypass-russian-food-export-blockade/).
Gazprom Suspends Shipments to Dutch Trader GasTerra: On Monday, GasTerra, which buys and trades energy products on behalf of the Dutch government, and Gazprom announced that the Russian gas company will no longer ship natural gas to GasTerra beginning on May 31, because the company refuses to pay for its shipments in rubles. The Dutch government stated that it had contracted elsewhere to make up for the gap in gas supply, and Gazprom stated that the suspension will continue until GasTerra pays in rubles. (https://www.reuters.com/business/energy/gazprom-suspends-gas-deliveries-dutch-trader-gasterra-2022-05-30/).
French Foreign Minister Demands Probe into French Journalist Death in Eastern Ukraine: French Foreign Minister Catherine Colonna called for an immediate and transparent inquiry into the circumstances of the death of a French journalist in Ukraine. The newly appointed Foreign Minister was visiting Kyiv when the death of the journalist was reported. (https://www.france24.com/en/europe/20220530-live-eu-to-pledge-support-for-ukraine-but-new-russia-sanctions-not-ready-yet).
EU Sanctions Against Russia Challenged Before EU Court: An action for annulment against the Decision and Regulation imposing sanctions in respect of actions undermining or threatening the territorial integrity, sovereignty and independence of Ukraine was published in the Official Journal of the European Union by a complainant under the name “OT”. The sanctions are only challenged as far as they apply to the applicant. 7 pleas were raised before the General Court of the European Union. (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:62022TN0193&from=EN).
EU, Ukraine Foreign Ministers Hold Call Sunday: EU Foreign Policy Chief Josep Borell and Ukrainian Foreign Minister Dmytro Kuleba held a call on Sunday, including a discussion on the “urgency to advance on sanctions” and “how to support export of agricultural products from Ukraine and impact of Russian aggression on global food security.” (https://www.ukrinform.net/rubric-polytics/3495295-borrell-kuleba-discuss-expansion-of-sanctions-pressure-on-russia.html).
Deal Reached on Russian Oil Embargo and Sixth Sanctions Package: On Monday night, European Council President Charles Michel tweeted that the Council had reached a deal to ban Russian oil imports to the EU. The move will immediately cover 2/3 of Russian oil imports to the EU. He added that the new package will include a de-Swifting of Sberbank, a ban on three Russian state owned broadcasters, and sanctions on individuals responsible for war crimes in Ukraine. Though full details of the deal are not clear, Michel’s tweet likely refers to a carveout from the ban on Russian oil imports for oil transported through pipelines, which represents 30% of EU imports. Hungarian Prime Minister Viktor Orban, said the idea was “not bad,” but wants insurance from the EU in case anything happens to the pipeline delivering oil to Hungary. It is unclear if EU leaders will adopt the text as proposed during the European summit (ending on Tuesday) or leave the issue entirely to the Council of Ministers.(https://twitter.com/eucopresident/status/1531391899218608133?cxt=HHwWioCwzbK0zMAqAAAA; https://www.politico.eu/article/eu-moves-step-closer-to-deal-on-russian-oil-embargo/).
German Economy Minister Fears European Unity on Russia “Starting to Crumble”:Speaking at a news conference on Sunday, German Economy Minister Robert Habeck stated, “After Russia’s attack on Ukraine, we saw what can happen when Europe stands united. With a view to the summit tomorrow, let’s hope it continues like this. But it is already starting to crumble and crumble again.” The Minister’s remarks come as the sixth EU sanctions package has stalled over a proposed Russian oil embargo. (https://www.reuters.com/world/europe/eu-unity-russian-sanctions-starting-crumble-german-minister-says-2022-05-29/).
French, German Leaders Call Putin to Discuss Grain Exports: On Saturday, French President Emmanuel Macron and German Chancellor Olaf Scholz held a call with Russian President Vladimir Putin. Readouts from the call indicate that the Russian President proposed enabling access to the port of Odessa, including demining operations according to the French statement, for exports of grain if western sanctions on Russia were lifted. (https://www.politico.eu/article/vladimir-putin-we-could-reopen-odesa-but-we-want-sanctions-removed/).
White House Opposes Russian Proposal to Lift Sanctions in Exchange for Food Exports: During her press briefing on Thursday, White House Press Secretary Karine Jean-Pierre said that the President is a “no” on lifting sanctions on Russia in exchange for food exports in the Black Sea. Jean-Pierre emphasized that sanctions on Russia do not impact the food and fertilizer sectors, and added that Russia was at fault for the impending food shortages. (https://www.whitehouse.gov/briefing-room/press-briefings/2022/05/26/press-briefing-by-press-secretary-karine-jean-pierre-may-26-2022/).
Treasury Sanctions Russian Banks for Facilitating Payments for North Korea: On Friday, the Treasury Department added new names to the Specially Designated Nationals list in connection with new missile activity in North Korea. Two of the new designations are for the Far Eastern Bank and Bank Sputnik, two Russian banks that facilitated payments on behalf of North Korean entities. (https://home.treasury.gov/news/press-releases/jy0801).
Secretary of State Blinken Calls Ukrainian Counterpart: On Friday, Secretary of State Antony Blinken called Ukrainian Foreign Minister Dmytro Kuleba for the second time this week. The pair discussed food security issues stemming from the conflict in Ukraine, and Secretary Blinken stated that the US and its allies will continue to support Ukraine through the crisis and its consequences. (https://www.state.gov/secretary-blinkens-call-with-ukrainian-foreign-minister-kuleba-24/).
Senator Ted Cruz Lobbied to Lift Ban on Russian Ammunition Imports: On Friday, The Washington Postreported that Senator Ted Cruz (R-TX) sent a letter to the Secretary of State and Secretary of the Treasury on September 3 calling on them to lift an embargo on Russian ammunition imports, calling it “an attempt at gun control.” Other signatories of the letter included Representatives Elise Stefanik (R-NY), Marjorie Taylor Green (R-GA), and Lauren Bobert (R-CO). (https://www.salon.com/2022/05/27/this-is-an-attempt-at-control-ted-cruz-fought-russian-sanctions-over-ammo-shortage-concerns_partner/).
House Foreign Affairs Committee Chairman in Europe to Discuss Black Sea Blockade: During meetings in Europe this week, House Foreign Affairs Committee Chairman Gregory Meeks (D-NY) spoke to various officials on the issue of food security emanating from the conflict in Ukraine. He stated that the blockade and restricted food exports are contributing to starvation and increases in food prices worldwide. (https://thegrio.com/2022/05/27/white-house-sanctions-russia-grains-food-shortages/).
Council Adopts Rules to Preserve Evidence of War Crimes: The Council of the EU adopted new rules allowing Eurojust (Agency for Criminal Justice) to store and preserve evidence relating to war crimes. Eurojust is also allowed to process and analyze the evidence in cooperation with Europol and to share information with national and international judicial authorities, including the International Criminal Court. Text will be signed by Parliament and Council early next week. (https://www.consilium.europa.eu/en/press/press-releases/2022/05/25/eurojust-le-conseil-adopte-de-nouvelles-regles-permettant-a-l-agence-de-conserver-des-preuves-de-crimes-de-guerre/).
Politico Reports on Companies Paying for Gas in Rubles: Politico provides an overview of EU companies complying or refusing to comply with Russian request to pay for gas in Rubles. Among the companies rejecting payment in Rubles are Finland’s Gasum, Bulgaria’s Bulgargaz and Poland PGNiG, the latter may sue for supply reinstatement under contract. Guidance of the European Commission on whether payments in Rubles would breach EU Sanctions is still far from clear. (https://www.politico.eu/article/ruble-gas-paid-russia-eu/).
Europe Suspends Drug Trafficking Data Sharing Arrangement with Russia: On Thursday, Russian Deputy Foreign Minister Oleg Syromolotov confirmed that the EU had suspended contact and data sharing arrangements with Russia as part of the European Monitoring Center for Drugs and Drug Addiction. He warned that such a withdrawal could lead to increased trafficking activity. (https://tass.com/politics/1456431).
Political Disagreements Complicate European Energy Negotiations: As European countries try to source energy from countries other than Russia, they are running into political differences with countries in the Middle East and North Africa, according to the Wall Street Journal. Qatari representatives are hesitant to sell to Germany due to concerns over resales of Qatari natural gas, and Spanish talks with Algeria have stalled over Spain’s recognition of Western Sahara. (https://www.wsj.com/articles/europes-quest-for-alternatives-to-russian-gas-hits-obstacles-in-middle-east-11653579800?mod=livecoverage_web).
German Chancellor Says Country is Working to End Reliance on Russian Gas: Speaking before the World Economic Forum on Thursday, German Chancellor Olaf Scholz stated that Germany is working “flat out” to end its imports of Russian natural gas. The country is set to end Russian oil imports by the end of the year, and is exploring ways to reduce natural gas imports. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-26-22/h_ba7a3634e11e01a8bcfd66e63905f86d).
Council Adopts Trade Liberalization with Ukraine: The Council of the EU adopted a temporary trade liberalization with Ukraine on Wednesday. As a consequence, import duties on all Ukrainian exports to the European Union will not be due for one year. This decision also applies to anti-dumping duties and safeguard measures. (https://www.consilium.europa.eu/en/press/press-releases/2022/05/24/ukraine-council-adopts-temporary-trade-liberalisation-with-ukraine/).
EU Commission Proposes to Add Violations of Union Sanctions to the List of EU Crimes:The Commission tabled a proposal to add the violation of Union sanctions to the list of EU crimes. Such a move would allow the Commission to propose a directive defining the scope and the criminal penalties for the violation of sanctions across Member States in a consistent manner. Today violations of EU sanctions is a matter of national law. The proposal needs unanimity in Council and the consent of the European Parliament to pass. (https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_3265).
EU Commission Proposes a Directive on Asset Recovery and Confiscation: The Commission proposed a new directive on asset recovery and confiscation to allow for the tracing and identification of property derived from criminal activities on the most serious crimes in Europe. The directive would also expand the means to confiscate assets. Regarding EU Sanctions, the Commission would require Member States to trace any assets of sanctioned persons as soon as they are listed and promote cooperation in relation to the prevention, detection and investigation of attempts to evade restrictive measures. (https://ec.europa.eu/commission/presscorner/detail/en/QANDA_22_3265).
EU Ambassadors Discuss Implementation of EU Sanctions: During a business lunch with Financial Services Commissioner Mairead McGuinness, EU Ambassadors discussed the implementation of the EU’s existing sanctions. The reported goal of the meeting was to improve coordination among EU Member States. (https://www.politico.eu/newsletter/brussels-playbook/grab-em-by-the-porsche-renew-and-bulgaria-eu-vs-tiger-kings-update/).
Italy’s Ambassador Voices a Dissenting View on War in Ukraine: Ahead of the upcoming EU Summit (May 30-31), Italy’s Ambassador proposed changes to the draft conclusions saying they should refer to peace talks and set out an immediate ceasefire as one of the EU’s first goals. This proposal is reported to be supported by Hungary and Cyprus. This departs from the usual hard line of the European Union on the Ukrainian topic. (https://www.euractiv.com/section/global-europe/news/eu-cracks-over-ukraine-widen-ahead-of-summit-as-italy-hungary-urge-truce/).
EU Announces Russia Asset Freeze Figures: On Wednesday, EU officials announced that, as a result of EU sanctions on Russia, 23 billion Euros of Russian Central Bank assets and 10 billion Euros in physical assets. Russia has reported that $300 billion of Russian Central Bank assets have been frozen worldwide; $100 billion of those restricted assets are located in the US. (https://www.reuters.com/world/europe/brussels-says-about-24-bln-russian-central-bank-assets-frozen-eu-less-than-2022-05-25/).
EU Updates Russia Sanctions Guidance on “General Questions”: On May 24, 2022, the European Commission updated its Russian Sanctions Guidance on general questions. The Commission added a question on the liquidation of financial instruments such as mutual fund shares. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-general_en.pdf).
EU Updates Russia Sanctions Guidance on Deposits: On May 23, 2022, the European Commission updated its Russian Sanctions Guidance on deposits. The Commission added a question to clarify to which Member State credit institutions shall report. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-deposits_en.pdf).
EU Updates Russia Sanctions Guidance on Sale of Securities’: On May 24, 2022, the European Commission updated its Russian Sanctions Guidance on the sale of securities. The Commission added two questions on the legal basis for refusing to approve a prospectus and the control by NCAs of indirect flow of funds to sanctioned entities arising from transactions involving an approved prospectus. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-securities-sale_en.pdf).
European Commission to Publish a Legislative Proposal to Make Seizing Assets Easier:Reuters anticipates the Commission will publish a legislative proposal on Wednesday to create a common legal framework for seizing assets. The proposal would address a weakness of EU sanctions, whereby many EU Member States lack a sufficiently robust legal framework to seize criminal assets. (https://www.reuters.com/world/europe/eu-proposes-make-seizing-assets-easier-including-sanctioned-oligarchs-document-2022-05-24/).
Mixed Signals Within EU on Russian Oil Ban (Part 1): Germany Expects Oil Embargo “In Days”: The EU’s largest Member State expects an agreement in the Council on a Russian oil embargo “within days” according to Germany’s economy minister Robert Habeck. (https://www.aljazeera.com/economy/2022/5/24/eu-oil-embargo-in-days-as-russia-flags-closer-china-ties).
Mixed Signals Within EU on Russian Oil Ban (Part 2): Commission President Does Not Expect an Agreement During Next Week’s Summit: Commission President Ursula von der Leyen said that she did not want to raise false expectations of a deal on the oil ban being struck next week during European Council. President Von der Leyen said she considers a European Council summit an inappropriate place to discuss this “very technical” issue. However, she stated that the sanctions already in force are draining the Russian “war machine” and economy. (https://www.politico.eu/article/ursula-von-der-leyen-russia-sanction-eu-summit/;https://www.businessinsider.com/sanctions-russia-draining-economy-european-commission-president-2022-5).
Mixed Signals Within EU on Russian Oil Ban (Part 3): Hungarian Prime Minister Says Oil Embargo Will Not Be Discussed at EU Summit: Hungarian Prime Minister Viktor Orbán wrote to the President of the European Council stating that he considers it very unlikely for a comprehensive deal to be found before the next European Council on May 30 and 31. Orbánstated that discussions at the level of the European Council without consensus would be counterproductive. Orbán’s main concern remains the absence of funding for landlocked Member States as they transition away from Russian oil. (https://www.euractiv.com/section/europe-s-east/news/trashed-436/).
Baltics and Slovakia Call for Confiscation of EU Frozen Assets: Reinforcing a decision leaked yesterday, Estonia, Latvia, Lithuania and Slovakia called for the use of Russian frozen assets for the reconstruction of Ukraine. The text of their written statement calls for the confiscation of both assets of sanctioned individuals and state assets, including frozen Russian central bank assets as well as the property of state-owned enterprises. The text calls for the European Commission to come forward with a proposal. Commission Executive Vice President Dombrovskis is assessing the option of using Russian central bank assets but said that individuals’ assets confiscation needs to be done on the basis of Member States’ criminal law. (https://www.politico.eu/article/baltics-and-slovakia-lets-use-russian-frozen-assets-for-ukraine-reconstruction/).
Draft European Summit Conclusions Call for EU Countries to Prepare for Russian Gas Cut: The European Council is planned for May 30 and 31, but leaked draft conclusions – likely to change – say there needs to be a coordinated European contingency plan for gas cut-offs, bilateral solidarity agreements, and a quick filling of gas storage before next winter. The text also mentions the need to increase renewable energy capacity and energy efficiency. (https://www.euractiv.com/section/enlargement/opinion/the-brief-russias-hub-in-the-heart-of-europe/).
Four EU Member States Call for Confiscation of Russian Frozen Assets to Rebuild Ukraine: Lithuania, Slovakia, Latvia and Estonia will call on Tuesday for the confiscation of Russian assets frozen by the European Union to fund the rebuilding of Ukraine after Russia’s invasion, according to Reuters. (https://www.reuters.com/world/europe/exclusive-four-eu-countries-call-use-russian-assets-rebuild-ukraine-2022-05-23/)
EU Updates Russia Sanctions Guidance on Deposits: On May 23, 2022, the European Commission updated its Russian Sanctions Guidance on deposits. The Commission added two new questions on the selling of properties by Russian nationals and the receipt (first question) and transfer (second question) of the purchase price. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-deposits_en.pdf).
EU Amends Russia Sanctions Guidance on Circumvention and Due Diligence: On May 20, 2022, the European Commission updated its Russian Sanctions Guidance on circumvention, due diligence and asset freezes. The Commission updated a question regarding secondary trading securities issued by an entity subject to an asset freeze. Other changes are not substantial. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-circumvention-due-diligence_en.pdf) and (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-assets-freezes_en.pdf).
EU Updates Russia Sanctions Guidance on Access to EU Ports: On May 19, 2022, theEuropean Commission updated its Russian Sanctions Guidance on the prohibition to access EU ports. The Commission added 4 new questions on (i) actions to be undertaken by national competent authorities (ii) denial of services for vessels already in EU ports, (iii) vessels located in the territorial sea of a Member State, (iv) collection of fees due by vessel’s owners. (https://ec.europa.eu/info/sites/default/files/business_economy_euro/banking_and_finance/documents/faqs-sanctions-russia-eu-ports_en.pdf)
EU Co-Legislators Strike Agreement on Mandatory Gas Storage: The EU Parliament and Council reached an agreement on the Commission proposal to impose mandatory gas storage for EU Member States to reinforce security of gas supply. Storage on member states’ territory should be filled to at least 80 percent of their capacity before the winter of 2022/2023 and to 90 percent before the following winter periods. As a reminder, the armed conflict in Ukraine is specifically mentioned in the Commission’s proposal as a reason that inspired the proposal. The agreement must now be confirmed by the two institutions. (https://www.consilium.europa.eu/en/press/press-releases/2022/05/19/gas-storage-council-and-parliament-reach-a-provisional-agreement/).
Poland Terminates Agreement with Russia on Yamal Gas Pipeline: On Monday, Polish Climate Minister Anna Moskwa said that Poland had decided to terminate its intergovernmental agreement with Russia regarding the Yamal Gas pipeline. (https://www.reuters.com/article/ukraine-crisis-poland-russia/poland-to-terminate-agreement-with-russia-regarding-yamal-gas-pipeline-says-minister-idUSL5N2XF162).
Lithuania Cuts Off Russian Energy Imports: On Sunday, Lithuanian Energy Minister Dainius Kreivys announced that the country had stopped imports of Russian energy products, including natural gas, oil, and electricity. The country ceased importing electricity from Russian utility company Inter RAO on Sunday, the last energy import from Russia that the country had. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-22-22/h_486a1950ccde7b50c675bc3b70a97ce9
Gazprom Confirms Gas Shutoff to Finland: On Saturday, Russian gas company Gazprom confirmed in a statement that it had cut off gas supplies to Finland as a result of the country’s refusal to pay for gas in rubles. The company stated it would not pay for gas in rubles earlier in the week and would seek arbitration. (https://tass.com/economy/1454141).
Portugal Pledges €250 Million to Ukraine:During his visit to Ukraine on Saturday, Portuguese President Antonio Costa pledged €250 million to support Ukrainian reconstruction. €100 million of the funds will be transferred through the course of this year “through an account for Ukraine in the IMF or through other channels that the EU will open for direct financing.” The remaining €150 million will be transferred to the Ukrainian State over the next three years. (https://www.portugalresident.com/costa-in-ukraine-pm-pledges-portugals-help-for-a-much-better-future/).
Germany, Italy Reportedly Receive Permission from EU to Open Ruble Accounts for Gas Payments: Reuters reported on Friday that the Italian and German governments instructed gas companies in their jurisdictions that opening a ruble account to purchase gas would not run afoul of EU sanctions. Russian requirements that obligate purchasers to pay for natural gas in rubles have caused confusion for European purchasers, and the EU has been slow to clarify how gas payments interact with the bloc’s sanctions on Russia. (https://www.reuters.com/markets/europe/germany-italy-approved-russian-gas-payments-after-nod-brussels-sources-2022-05-20/).
Finnish Gas Company Announces Russian Gas Shutoff on Saturday: Finnish state-owned natural gas company Gasum announced on Friday that Russia will cut off its flow of natural gas to Finland on Saturday. Gasum previously refused to pay for Russian gas in rubles, despite Russian decrees mandating payment in the currency. Finnish leaders said that the shutoff would not disrupt gas supply to the country, saying that it will still be able to get gas through the Balticconnector pipeline with Estonia. (https://www.aljazeera.com/news/2022/5/20/russia-to-cut-gas-flow-to-finland-saturday-gasum).
Germany Signs Energy Partnership with Qatar:In a move widely seen as an effort to distance itself from Russian gas, Germany announced on Friday that it had signed a declaration to deepen its energy partnership with Qatar, particularly in the LNG and hydrogen space. The agreement does not guarantee future long-term LNG deals between the countries; those still would need to be negotiated. (https://www.reuters.com/business/energy/germany-qatar-sign-energy-partnership-agreement-2022-05-20/).
Hungary Quietly Moving Away from Russian Oil: The Wall Street Journal reported on Friday that, despite consistent and ongoing opposition to the EU’s proposed oil embargo by the country’s Prime Minister, Hungary’s largest energy firm, MOL, has been quietly accelerating purchases of oil from non-Russian sources. Given these efforts, Hungary’s largest refinery could run on entirely non-Russian oil in as little as two years. (https://www.wsj.com/articles/hungarys-orban-keeps-eu-guessing-over-russian-oil-embargo-11653053395?mod=livecoverage_web).
EU Disburses 600 Million Euros in Assistance to Ukraine: On Friday, the European Commission disbursed 600 million euros in macro-financial assistance to Ukraine. The funds will help Ukraine address its acute financing gap. The first 600 million euros of macro-financial assistance from the EU was already disbursed in two tranches on March 11 and 18. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3183).
Russian Hackers Disable Italian Government Websites: Pro-Russian hacking group Killnet took responsibility for a cyberattack on several Italian government websites on Friday. Several Italian government sites, including the websites for the Italian Foreign Ministry and national magistrates association, were down for upwards of 12 hours as a result of the attack. (https://www.reuters.com/world/europe/pro-russian-hackers-attack-institutional-websites-italy-police-2022-05-20/).
Former German Chancellor Schröder to Leave the Supervisory Board of Rosneft: On May 20, former German Chancellor Gerhard Schröder announced that he will leave his position as chairman and member of the supervisory board of Russian oil company Rosneft. This decision follows the adoption by the European Parliament of a resolution urging the EU to sanction Europeans still on the boards of prominent Russian firms and the decision of the Germany’s governing parties to strip him of his taxpayer-funded office space in Berlin. (https://www.politico.eu/article/gerhard-schroder-to-leave-rosneft/).
European Parliament Requests All EU Sanctions Against Russia Must Apply to Belarus: Members of the European Parliament adopted a non-binding resolution calling for all EU sanctions against Russia to be strictly mirrored for Belarus “including in all future rounds of sanctions”. The text also called on Member states to actively apply the universal jurisdiction principle and prepare court cases against Belarusian officials (https://www.europarl.europa.eu/news/pt/press-room/20220517IPR29937/meps-all-eu-sanctions-against-russia-must-apply-to-belarus).
Bosnia States it Cannot Join EU Sanctions on Russia: After a meeting with European Council President Charles Michel on Friday, Bosnian Serb nationalist leader Milorad Dodik stated that Bosnia, a candidate for EU accession, could not join the EU’s sanctions program on Russia. He stated “I think it is of utmost importance for Bosnia to remain neutral. In conditions in which we exist, it would be a problem for us to impose any kind of sanctions and join the EU or global sanctions.”https://www.reuters.com/world/europe/serb-leader-tells-eu-bosnia-cannot-join-sanctions-against-russia-2022-05-20/).
Hungary Seeks Compensation in Exchange for a Positive Vote on a Russian Oil Ban: TheHungarian foreign minister on Friday called the EU to finance the necessary investments to modernize Hungary’s energy grid and compensate the country for the price rise that would result from an oil ban. The foreign minister suggested that this would cost between 15 to 18 billion. The EU High-Representative stated that talks on the oil ban could drag out for a “week or two” (https://euobserver.com/world/154958).
Former German Chancellor Draws Scrutiny for Russia Ties: On Thursday, the European Parliament introduced a non-binding resolution that promises to sanction “European members of the boards of major Russian companies and to politicians who continue to receive Russian money.” The resolution explicitly mentions former German Chancellor Gerhard Schroeder, who is on the board of Rosneft and appears to have close ties with Russian President Vladimir Putin. The German parliament also stripped Schroeder of his former Chancellor’s office, though he still will receive diplomatic security. The legislation does not state the reason for the removal, but it is believed he lost his office space due to his ties to Russia. (https://www.reuters.com/world/europe/german-ex-chancellor-schroeder-under-eu-pressure-quit-rosneft-2022-05-19/).
EU Suspends Import Duties on Ukrainian Products: On Thursday, the European Parliament voted to suspend import duties on all goods from Ukraine for one year by a vote of 515-32, with 11 abstentions. The move would suspend all import duties and antidumping duties on Ukrainian products during that period. The suspension will enter into force upon publication in the Official Journal of the EU tomorrow. (https://www.europarl.europa.eu/news/pt/press-room/20220517IPR29933/meps-approve-suspension-of-eu-duties-on-all-ukrainian-exports).
Finnish Gas Company Warns of Impending Gas Shutoff: Finnish state gas company Gasum stated on Wednesday that there is a “real risk” of natural gas supplies being shut off in the country as a result of its decision to not pay for Russian gas in rubles. The company added that it is preparing for this situation with customers and the government, and is seeking out other suppliers. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-18-22/h_857e0fb52e848339c2ee8d441ecf2616).
European Commission Releases Plan to Reduce European Dependence on Russian Energy: On Wednesday, the European Commission released its REPowerEU Plan, which is a set of policy proposals to reduce European dependence on Russian energy products. The plan contains platforms on reducing energy consumption through regulation and short term behavioral changes, diversifying suppliers, scaling up renewable energy sources, and reducing fossil fuel consumption. The plan requires an additional 210 billion euros of investment between now and 2027. (https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3131).
EU Announces 9 Billion Euros in Financial Assistance for Ukraine: On Wednesday, the European Commission proposed a 9 billion euro loan to Ukraine to prop up the country’s economy during Russia’s invasion. In announcing the assistance, Commission President Ursula Von Der Leyen added that the Commission is also organizing a larger reconstruction platform, in concert with Ukrainians, to organize longer-term reconstruction funding for the country. (https://www.usnews.com/news/world/articles/2022-05-18/eu-offers-9-billion-euro-loan-to-ukraine-prepares-reconstruction-commission).
HR Borrell Confirms No Agreement on New Sanctions Package: Speaking after the meeting of EU Foreign Affairs Ministers on Tuesday, High Representative Josep Borrell confirmed that the EU will continue imposing sanctions on Russia to make the cost of invasion unbearable for the Kremlin, despite the fact that no agreement had been reached yet on the 6th sanctions package. Discussions at the technical level are continuing. (https://www.eeas.europa.eu/eeas/foreign-affairs-council-remarks-high-representative-josep-borrell-press-conference-1_en).
New Sanctions Deal Could Be Weeks Away According to HR Borrell: High Representative Borrel has indicated it could take another two weeks for the EU to agree on the 6th sanctions package, as disagreements over a proposed oil ban persist, with diplomats questioning whether a deal will be reached at all. (https://www.politico.eu/article/eu-sanctions-deal-josep-borrell-russia-oil-industry/).
European Commission in Discussions With Hungary Over Oil Ban: The European Commission is reportedly discussing financial support to Hungary to lift its veto on the proposed ban on Russian oil, following Hungary’s Foreign Minister’s claim that the total cost for Hungary to wean itself off Russian energy would be up to 18 billion euros. (https://www.reuters.com/markets/commodities/eu-hungary-split-over-money-refineries-talks-russia-oil-ban-sources-2022-05-17/).
Difficulties in Adopting 6th Sanctions Package Cast Doubts on a Potential 7th Package: EU officials have expressed concerns that, given the difficulties in securing consensus around the 6thsanctions package, a 7th package that would cover Russian gas appears extremely difficult. (https://www.euractiv.com/section/politics/short_news/eu-diplomat-we-are-reaching-our-limits-with-sanctions-against-russia/).
European Commission’s Updated Guidance on Ruble-for-Gas Scheme: The European Commission, in a guidance circulated to Member States, has indicated that to avoid breaching sanctions, companies would need to seek additional conditions on the transactions, to confirm that their contractual obligations are complete once they deposit euros with Gazprombank – as opposed to after Russia has converted the payment into rubles. Another option could be for EU companies themselves to declare that they consider their contractual obligations to be completed when they deposit euros or dollars with Gazprombank. EU companies are allowed to open accounts with Gazprombank and engage with the bank to attempt to seek a solution. Gazprombank is not subject to EU sanctions. (https://www.reuters.com/business/energy/what-is-eus-stance-russias-roubles-gas-payment-demand-2022-04-27/).
European Commission Spokesman Claims that Opening Account in Rubles Breaches EU Sanctions: A spokesman for the European Commission said that opening accounts in rubles at a Russian bank to pay for gas would breach sanctions, despite previous guidance that EU sanctions do not prevent companies from opening an account in Russia and that companies can pay for Russian gas, provided they do so in the currency agreed in their existing contracts and declare the transaction completed when that currency is paid. (https://www.reuters.com/markets/commodities/eu-clarifies-how-companies-can-legally-pay-russian-gas-2022-05-16/).
European Parliament Considers Suspension of Import Duties on Ukrainian Goods: On Tuesday, the European Parliament’s International Trade Committee considered a regulation that would suspend all duties on imports from Ukraine. The full plenary committee of the European Parliament will vote on the regulation later in the week once it is adopted by the Committee, which is expected to occur. (http://pr.euractiv.com/pr/sds-push-lifting-import-duties-ukrainian-products-act-solidarity-233386).
Italy’s Eni to Open Ruble Accounts for Gas Payments: Eni has confirmed it will open a ruble-denominated account at Gazprombank as a precaution to ensure the next payment for Russia gas goes through, despite the European Commission’s warning that this may breach EU sanctions. According to Eni, Gazprom Export and Russian authorities have confirmed that payment obligations will be considered complete with the initial deposit in euros, and that the currency conversion will occur within 48 hours without any involvement from the sanctioned Russian Central Bank (https://www.politico.eu/article/italys-eni-to-open-ruble-accounts-for-gas-payments/).
Finland’s Gasum to Take Gazprom Export to Arbitration Over Payments: Finland’s state-owned energy provider Gasum said on Tuesday it will not pay in rubles for gas purchases and would take its dispute with Russia’s Gazprom Export to arbitration proceedings. (https://www.reuters.com/markets/commodities/finlands-gasum-take-gazprom-export-arbitration-over-payments-2022-05-17/).
France’s Engie to Pay Russia’s Gazprom in Euros This Month: French power company Engie said on Tuesday it would make the next payment to Gazprom in euros as both companies have agreed on a solution in line with European sanctions, although no details were provided. (https://www.reuters.com/markets/europe/frances-engie-agrees-deal-with-russias-gazprom-gas-payments-2022-05-17/).
European Commission Updates Russia Sanctions Guidance: On May 17, the European Commission updated its guidance on sanctions affecting deposits and central securities depositories. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
EU Fails to Reach Deal on Sixth Sanctions Package: EU Foreign Ministers failed on Monday to secure an agreement on the sixth sanctions package. The issue still is the proposed embargo on Russian oil. Lithuanian representatives said that the bloc is being “held hostage by one member-state,” presumably a reference to Hungary, which has persistently objected to the embargo due to its dependence on Russian oil and stated earlier in the day that it had not received sufficient guarantees from the EU that it would provide financial assistance to countries transitioning away from Russian oil. (https://www.reuters.com/world/europe/one-country-holding-eu-hostage-russian-oil-embargo-lithuania-says-2022-05-16/).
German Negotiators Expected Difficulty, Optimistic About Future of Package: Speaking in advance of the Foreign Minister’s meeting, German Foreign Minister Annalena Baerbock said, “As Germans, we know that this [an oil embargo] is not an easy step. Certain issues still need to be resolved, and this will not happen today… But I am confident that we will find agreement in the coming days.” (https://www.reuters.com/world/europe/eu-needs-few-more-days-next-sanctions-package-russia-germany-2022-05-16/).
Austrian Foreign Minister Expects Agreement on Sanctions Package “In the Coming Days”:Speaking in advance of the failed Monday negotiations, Austrian Foreign Minister Alexander Schallenberg said that he is “confident that we will manage to get the sixth sanctions package done in the next days.” (https://www.reuters.com/world/europe/austria-says-eu-will-find-agreement-russia-sanctions-next-days-2022-05-16/).
Germany to Stop Russian Oil Imports, Regardless of Sanctions: Speaking toBloomberg on Monday, sources within the German government said that the country plans to stop importing Russian oil by the end of the year, regardless on if the EU reaches an agreement on a Russian oil embargo. The officials did not say which countries Germany would turn to in order to replace Russian oil imports. (https://www.bloomberg.com/news/articles/2022-05-15/germany-to-stop-russian-oil-imports-regardless-of-eu-sanctions).
Greek PM Calls for EU, US to Work Together on Lowering Gas Prices: During a speech at the White House on Monday, Greek Prime Minister Kyriakos Mitsotakis called on the US and EU to work together to bring down gas prices. He noted, “the sanctions we have imposed on Russia are crushing, and rightfully so, but as we discussed, we must not lose sight of the fact that our societies are paying a heavy price in terms of energy prices.” (https://www.wsj.com/livecoverage/russia-ukraine-latest-news-2022-05-16/card/greece-s-prime-minister-calls-on-eu-u-s-to-work-toward-lowering-gas-prices-HER4U5kE6DB0Rsn6A3Kw).
Portugal Blocks Sale of Mansion Over Suspected Ties to Abramovich: Portuguese Foreign Minister Joao Cravinho announced that Portugal had blocked the sale of a 10 million euro mansion in the Quinta do Lago resort due to a “strong conviction” that it belonged to sanctioned Russian billionaire Roman Abramovich. The house was frozen, meaning it cannot be rented, sold, or mortgaged; the freeze was put in place on March 25. Abramovich has denied any connection to Millhouse Views LLC, the entity that owns the villa. (https://www.reuters.com/world/europe/portugal-blocks-sale-abramovich-mansion-publico-newspaper-says-2022-05-14/).
Commission Reduces Economic Forecast due to Ukraine Invasion: On Monday, the European Commission released its spring economic forecast for 2022 and 2023. The new forecast predicts that eurozone GDP will increase by 2.7% this year and 2.3% in 2023; the winter economic forecast said that Eurozone GDP would increase by 4% and 2.8% in the respective years. European Commissioner for the Economy Paolo Gentiloni indicated that the revision was due to the economic impact of Russia’s invasion of Ukraine. (https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/spring-2022-economic-forecast_en).
Renault Sells Stake in Russian Carmaker: On Monday, French carmaker Renault announced that it was selling its majority stake in Russian carmaker Avtovaz. Renault symbolically sold its stake for one ruble to the Central Research and Development Automobile and Engine Institute, but the sale reportedly came with conditions that gives Renault the right to buy back the stake under a six-year option. The sale also impacts its Russian subsidiary, Renault Russia, which was sold to the city of Moscow in another symbolic one-ruble transaction. (https://www.reuters.com/markets/deals/renault-sells-its-stake-russias-avtovaz-option-buy-it-back-2022-05-16/).
EU Drafts Updated Guidance for Gas Payments:Bloomberg reported on Saturday that the EU has circulated a new draft guidance regarding natural gas payments to Russia. The draft guidance indicates that companies should “make a clear statement that they consider their obligations fulfilled once they pay [for gas] in euros or dollars, in line with existing contracts” once they complete payment, and that once the initial payment is made, Russia should impose no other obligation on the company. The guidance clarifies that companies are permitted to open accounts in Euros or dollars at Gazprombank, but reportedly does not discuss the legality of opening ruble accounts at Gazprombank. (https://www.bloomberg.com/news/articles/2022-05-14/eu-drafts-plan-for-buying-russian-gas-without-breaking-sanctions).
EU Committed to Unified Action on Sanctions:In interviews with The Financial Times, EU negotiators expressed their intent to move forward as a unified bloc on future sanctions against Russia, with European Commission Vice President Maroš Šefčovič saying “We are very much determined to work with Hungary and of course with the rest of the EU member states to have European unity . . . We definitely prefer the 27 going forward together.” Each EU nation in theory could impose their own sanctions against Russia except for objectors like Hungary, but such a move would undermine EU unity and the common market, as Hungary could likely purchase energy products at reduced prices. (https://www.ft.com/content/abba000b-992a-45a3-941a-3616e335ccc5).
Finland Confirms Russian Electricity Shutoff:After Friday’s announcement that Russian state-owned electricity provider Inter RAO would cut off electricity supply to Finland due to a lack of payment, Fingrid Senior Vice President of Power System Operations Reima Päivinen confirmed that electricity supply from Russia was effectively cut at 12 a.m. CET on Saturday. He added that the Finnish electric grid is stable, even without Russian electricity. (https://www.cnn.com/europe/live-news/russia-ukraine-war-news-05-14-22/h_262d0e26d1cc51988e0fd58db9d255b4).
European Commission Updates Russia Sanctions Guidance: On May 13, the European Commission updated its guidance on sanctions affecting trading. (https://ec.europa.eu/info/business-economy-euro/banking-and-finance/international-relations/restrictive-measures-sanctions/sanctions-adopted-following-russias-military-aggression-against-ukraine_en).
EU Considers Modifying Oil Ban: Reports from the EU negotiations indicate that the bloc is considering dropping the complete ban on imports of Russian oil due to persistent Hungarian and Slovakian resistance. Negotiators are also considering modifying the oil ban in a way that Hungary could support. Either way, negotiators state that this would be a bad signal for the future of European unity on sanctions. (https://www.politico.eu/article/eu-considers-shelving-ban-on-russia-oil-as-hungary-viktor-orban/).
EU Still Optimistic About Oil Deal in May: Despite difficult negotiations with Hungary and other nations regarding the oil ban, high level sources within the EU indicate that they still intend to get an oil ban passed by the end of the month. EU sources indicate that there is flexibility in the oil ban language that will allow the deal to proceed. (https://www.reuters.com/business/energy/eu-hopeful-russian-oil-embargo-deal-may-diplomats-say-2022-05-13/).
Italian Energy Group Planning to Open Ruble Account: On Friday, Italian energy group Eni, one of the largest European importers of Russian gas, stated that it would begin the process of opening a ruble account with Gazprombank in order to pay for Russian LNG imports next week, unless instructed not to do so by the EU. The legality of the rubles for gas payment scheme through Gazprombank has been the subject of intense debate at the EU. (https://www.reuters.com/business/energy/eni-set-open-roubles-account-russia-gas-unless-told-otherwise-by-eu-2022-05-13/).
European LNG Prices Rise As Russia Cuts Off Supply: As Russia cut off LNG to Polish pipelines this week, European LNG benchmark prices jumped by 13 percent on Thursday. Traders suspect that these prices, which have been volatile in recent weeks, indicate that the market has not taken into account even a minor disruption of LNG supply, even as Europe considers further retaliatory measures against Russia. (https://www.wsj.com/articles/europes-gas-market-is-still-counting-on-russian-supplies-11652434260?mod=livecoverage_web).
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