The European Union Monitoring Desk Islamabad by Editor Tazeen Akhtar
The European Union’s attempt to penalize foreign ports and banks that Russia uses to illicitly sell oil is running into opposition, threatening to weaken the bloc’s latest sanctions package.
Several capitals are wary of proposals to hit ports in Georgia and Indonesia, according to people familiar with the matter. Italy and Hungary have specifically raised concerns about the Kulevi port in Georgia, while Greece and Malta have also expressed hesitation about a port in Indonesia.
Separately, Italy and Spain are taking issue with proposed penalties on a bank in Cuba, added the people, who spoke on condition of anonymity to discuss private deliberations.
The authors Alberto Nardelli, Andrea Palasciano, and Donato Paolo Mancini have filed this report for Bloomberg while other media outlets including TASS of Russia have shared parts of these developments.
The skepticism comes as Greece and Malta also voice fears about a related proposal to replace the Russian oil price cap with a ban on maritime services such as insurance and transportation. That move hinges on backing from the Group of Seven nations, where the US has been non-committal.
The mounting pushback risks hollowing out the EU’s latest sanctions package, the people said. The proposals — which the European Commission, the EU’s executive arm, unveiled earlier this month — are meant to further drain Russia’s oil revenue as officials try to pressure Moscow to end its war against Ukraine.
EU envoys discussed the measures on Monday. The bloc is aiming to approve the package this month. Sanctions require each country’s support before they’re adopted.
Italy’s reluctance to sanction the Kulevi port is because it also brings in gas from Azerbaijan, a key energy source for Europe, according to some of the people.
And the Cuban bank is the only one working with foreign currencies on the island, servicing diplomats and EU citizens who may need assistance, the people added. Other proposed penalties on foreign banks have not faced resistance. Italy declined to comment on the sanctions talks.
A Greek spokesperson previously declined to comment on the maritime services ban, and didn’t immediately respond to a request for comment on Tuesday. A Maltese spokesperson in Brussels said last week that the island nation was engaging in technical discussions to ensure that the eventual outcome will be implementable.
Hungary has long opposed measures it says limit its energy supplies. The European Commission and Spanish government didn’t immediately respond to requests for comment.
Elsewhere, the commission is pushing to ban the export of machine tools and certain radio equipment to Kyrgyzstan, arguing the products may be helping Russia’s war effort.
KYRGYZSTAN RUSSIA
EU exports to the Central Asian country of sanctioned technologies that can be used for weapons-making have risen eight-fold since Russia’s full-scale war began in 2022. In parallel, shipments of those products from Kyrgyzstan to Russia grew 1,000%, one of the people said.
The Kyrgyzstan authorities have done little to stop the flow, the person added.
Daniyar Amangeldiev, first deputy chairman of Kyrgyzstan’s cabinet of ministers, told Bloomberg over the weekend that the EU proposal is unfairly targeting his country, arguing the trade increases were due to starting from a base of virtually zero.
Amangeldiev said Kyrgyzstan is prepared to intervene if the EU provides evidence of malfeasance.
“It’s the actions of the private companies, some private individuals, and we’re trying to stop it,” he said on the sidelines of the Munich Security Conference. “It’s not unified intentional policies of the state agencies. If we get proof of wrongdoings, the companies will be punished and restricted.”
Officials from the bloc’s executive arm are due to meet with the Kyrgyzstan government later this month, he said.
CHINA
The EU’s latest package also includes proposals to sanction several companies in China and elsewhere that are allegedly supplying Russia’s war machine.
Additionally, it would blacklist more shadow fleet vessels and impose fresh trade restrictions, while hitting cryptocurrency operators and foreign banks the EU claims are helping Moscow evade sanctions.
In Munich, Ukrainian President Volodymyr Zelenskiy called on the EU and other allies to keep imposing stringent sanctions on Russia to make President Vladimir Putin take peace negotiations seriously.
