Brussels economy: The 22nd EU package will be aimed at combating circumvention of sanctions

The next package of European restrictions will not contain new directions, its main goal is to counter circumvention of already imposed sanctions, Izvestia found out. The European Commission is currently preparing the draft, and it is planned to approve it by the meeting of the Council on Foreign Affairs on October 12, the source said. Bloomberg previously announced the blacklisting of 1.6 thousand companies. The effect of such measures will be limited, and Russian businesses will adapt within a month and a half, experts say. Brussels is facing growing discontent over restrictions, but Ireland holds the presidency of the EU Council, which supports tougher sanctions, said Russian Ambassador to Dublin Yuri Filatov.

What will be included in the next package of sanctions

The European Union has begun discussing the 22nd package of sanctions against Russia. According to a European diplomatic source, the new measures will focus primarily on combating circumvention of existing restrictions, so there will most likely be no large-scale bans in the document.

— He will focus on combating circumvention of sanctions and blacklisting organizations that act as intermediaries in circumvention schemes. Experience has shown that instead of agreeing on complex EU packages, it is better to target specific infringing companies around the world," the source told Izvestia.

Photo: IZVESTIA/Konstantin Kokoshkin

The editorial board also sent a request to the European Commission.

Another Izvestia source clarified that the European Commission is currently preparing a draft of the next restrictions. The document has not yet been submitted for consideration by the EU Council, which must approve it.

— [It is planned] to complete all procedures by the meeting of the Council on Foreign Affairs on October 12. However, it is possible that this will happen earlier," the source said.

Tightening the screws: what will the new round of sanctions against Russia lead to?

The United States has imposed import duties, and the Pentagon has expanded the list of organizations that allegedly pose a threat to national security.

Earlier, Bloomberg reported that the European Commission is proposing to expand the sanctions lists by another 1.6 thousand companies. Today, more than 3.1 thousand individuals and legal entities are already under EU restrictions.

Izvestia previously wrote that the 21st package may become the last large-scale complex of European restrictions. Previous restrictions covered all new sectors of the Russian economy, as well as bans on the import of goods. For example, the last list was originally planned to include the cessation of imports of cod and other fish products from the Russian Federation, but later this idea had to be abandoned.

Photo: IZVESTIA/Pavel Volkov

The new restrictions will continue to be called packages, but this is due only to legal reasons — we are talking about package amendments to existing documents, said Egor Sergeev, senior researcher at the MGIMO Institute of the Ministry of Foreign Affairs of Russia. The range of bans will only narrow, the expert believes: sanctions will become targeted and will affect specific companies, banks and individuals.

Brussels has focused on improving the effectiveness of measures already introduced, since there are no more opportunities to expand sectoral sanctions, Ekaterina Arapova, head of the MGIMO research program at the Russian Foreign Ministry, told Izvestia. According to her, the new restrictions will affect both Russian and foreign organizations acting as intermediaries. For example, the EU has already included 15 companies from China and 11 more structures from five other countries in the 21st package.

Photo: Global Look Press/Michael Kappeler

At the same time, the effect of the next restrictions is likely to be short-term, and adaptation to them will take about a month and a half, says Arapova. Since 2022, the business of the Russian Federation and partner countries has fully adapted to the sanctions pressure and is able to respond promptly to the blocking of certain intermediary structures.

The Forbidden Code: which EU sanctions are included in the stripped-down 21st package

Brussels has abandoned some of the restrictive measures due to extensive internal disagreements.

Disagreements in the EU over restrictions

The coordination of the proposed measures remains a difficult task for the EU leadership. Earlier, Western media warned that the possibilities for increasing sanctions pressure on the Russian Federation have been exhausted, as more and more states are opposed to new restrictions. At least six EU countries — Austria, Germany, Greece, Italy, Portugal and France — blocked certain points within the framework of the 21st package. It was possible to approve it only after large-scale concessions: for example, Athens obtained permission to continue transporting Russian LNG to third countries.

The Chairman of the Council of the European Union is responsible for resolving disagreements when approving new restrictions. Since July 1, these functions have been transferred to Ireland, which advocates tougher anti-Russian sanctions, Russian Ambassador to Dublin Yuri Filatov told Izvestia.

"Dublin expects to use the presidency to strengthen its anti—Russian reputation and simultaneously score political points on the current European Russophobia," the diplomat said.

Photo: Global Look Press/Michael Kappeler

The hardliners also include the Baltic States and Scandinavia. For example, earlier they proposed to completely ban the import of Russian energy resources and luxury goods. Such initiatives are not supported in Southern Europe. During the discussion of the 21st package, Italy and France demanded to change the wording of the ban on entry to the EU for the participants of the SVR, as they feared a complete cessation of tourism from the Russian Federation. As a result, this measure was never adopted, despite the tough position of EC President Ursula von der Leyen.

Greece and Malta are concerned about measures against trade in Russian raw materials, as they play a key role in maritime transportation. Previously, these states have already opposed restrictions on third-country seaports, and it is possible that they will have claims this time. There may also be opposition from other European capitals: for example, when discussing the 21st package, Germany and Portugal opposed the ban on the import of certain types of fish from the Russian Federation. Egor Sergeev emphasizes that the high sensitivity of sanctions for national economies is increasingly forcing even those countries that previously unconditionally supported the course of Brussels to argue with them.

Photo: RIA Novosti/Alexander Polegenko

The completion of the 22nd package of sanctions shows that Brussels' previous policy towards Moscow has reached an impasse. Economic ties between the Russian Federation and the EU have actually been severed, but these measures have not affected Russia's position. The current situation opens up opportunities for European supporters of a peaceful settlement of the Ukrainian conflict, who are calling for the restoration of dialogue with Moscow. However, so far Brussels has demonstrated that it does not intend to turn off the previous path. European officials probably expect to coordinate actions with the "hawks" in the United States, who are now trying to pass a bill on new American sanctions against the Russian Federation.