Officials and members of the European Parliament in Brussels (AFP Photo)
EU adopts new sanctions against Russia to come into force in ‘next few days’
A new package of sanctions against Russia has been adopted by the EU. Previous reports said the “further restrictive measures” were aimed at targeting three major oil companies, as well as the defense sector.
According to a Monday statement by the president of the European Council, Herman Van Rompuy, the new package was adopted through written procedure, “deepening the targeted measures of 31 July.”
“The sanctions aim at promoting a change of course in Russia’s actions destabilizing eastern Ukraine,” the statement reads.
Although it was previously reported that the new sanctions could come into force by Tuesday, the final EU decision did not specify the date when they will be applied, only saying it “will take place in the next few days,” leaving time “for an assessment of the implementation of the cease-fire agreement [in Ukraine].”
“Depending on the situation on the ground, the EU stands ready to review the agreed sanctions in whole or in part,”Van Rompuy’sstatement reads.
Over the weekend, some EU diplomats told Reuters that the sanctions could be lifted if the ceasefire between the Ukrainian government and militia forces holds. The truce was agreed last week.
“A ceasefire must hold for sanctions to be lifted,” the agency quoted a senior EU diplomat as saying.
According to some EU representatives, the sanctions could “even get ridden off entirely.”
Despite some shooting over the weekend, “overall the ceasefire held,” an OSCE security watchdog said on Monday, adding that “it is still shaky.”
The new package of sanctions is reportedly aimed at Russian state-owned oil companies, particularly Rosneft, Transneft, and Gazpromneft.
On Monday, Prime Minster Dmitry Medvedev warned that Russia may shut its air corridors to Western airlines if the next round of European sanctions hits Russia’s energy sector.
In order to be approved, the restrictive documents needed to be signed by all 28 member states of the European Union. There were reports that the decision did not go through at once, and an EU ambassadors emergency meeting had to be called, as some governments had second thoughts on the new ‘punishment’ for Moscow.
“The ceasefire is an enormous step forward and with that comes the possibility of a political solution…There is quite a strong appetite across Europe for saying we want a political solution here, we don’t want a ramping up of the economic pressure,” British opposition MP and peace campaigner Jeremy Corbyn told RT.
If new EU sanctions hit energy sector, Russia may close airspace – Medvedev
Prime Minister Dmitry Medvedev has warned Russia may shut its air corridors to Western airlines if the next round of European sanctions hit Russian energy companies.
“If there are sanctions related to the energy sector, or further restrictions on Russia’s financial sector, we will have to respond asymmetrically,” Medvedev said in an interview with the Vedomosti newspaper, published on Monday.
EU ministers will gather on Monday to discuss new sanctions against Russia and are rumored to be introduced on Tuesday. The prime minister promised a strong retaliation if the West slaps Russia with more sanctions.
“We could impose transport restrictions,” Medvedev said, adding, “We believe we have friendly relations with our partners, and foreign airlines of friendly countries are permitted to fly over Russia. However, we’ll have to respond to any restrictions imposed on us,” the prime minister said.
After sanctions hit Aeroflot’s low-cost subsidiary Dobrolet in late July, Medvedev discussed with ministers the possibility of limiting, of even completely blocking, European flights to Asia that overfly Russia.
“If Western carriers have to bypass our airspace, this could drive many struggling airlines into bankruptcy. This is not the way to go. We just hope our partners realize this at some point,” he told Vedomosti.
Flying over Russian airspace saves Western airlines headed to Asia at least 4 hours of flight time, which adds up to about $30,000 per flight.
Lufthansa said it could potentially lose more than €1 billion in three months if it does not use Russian airspace. Lufthansa, along with British Airways and Air France, are the largest EU airlines. US airlines currently don’t operate over Siberian airspace.
Many low-cost airlines have decided not to launch new routes to Russia, with the threat of sanctions possibly a factor. Last week Ryanair ditched plans to establish a Dublin-St. Petersburg route, and easyJet, another European-based airline, dropped its plans to develop a London-St. Petersburg service.
Medvedev didn’t specify whether the blocked airspace would also apply to cargo and delivery companies, such as UPS and FedEx.
Oil at stake
EU sanctions, which will reportedly be introduced on Tuesday, will ban Russia’s three main oil companies- Rosneft, Gazprom Neft, and Transneft – from raising long-term (longer than 30 days) debt on European capital markets, according to the Wall Street Journal and the Financial Times.
Rosneft – Russia’s largest oil producer – was added to the US sanctions list on July 16 and was put on the EU list on July 29. Russia’s largest independent natural gas producer, Novatek, also was added to the blacklist in July, along with a ban on the export of hi-tech oil equipment needed in Arctic, deep sea, and shale extraction projects to Russia.
Gazprom Neft is the oil subsidiary of Russian gas giant Gazprom.
Transneft is Russia’s state-owned oil pipeline company that exports all of Rosneft’s crude oil, and 56 percent of Russia’s crude exports.
Sanctions likely won’t apply to privately-owned Russian oil groups such as Lukoil and Surgutneftegaz.
The EU will also reportedly follow America’s lead on banning goods that can have dual military and civilian use from Russian companies that also supply the Russian military, the WSJ reported Sunday. On July 16, the US blacklisted several defense sector companies include Almaz-Antey Corporation, the Kalashnikov Concern and Instrument Design Bureau, as well as companies such as Izhmash, Basalt, and Uralvagonzavod.
“Sanctions are always a double-edged sword. Ultimately they end up backfiring and end up hurting those who are first to impose restrictions,” Medvedev said.
The EU has agreed on the new sanctions but said they could be delayed or even cancelled if Russia shows willingness to resolve the conflict in Ukraine.
On Friday Kiev introduced a ceasefire to calm fighting between the Ukrainian army and anti-government forces, but fighting and shelling continued in the country’s east.