The European Parliament drew attention to the fact that the trade between EU countries and Russia continues despite the historically harsh sanctions and listed the products imported from Russia.
After Russia’s invasion of Ukraine in February last year, the European Union (EU) adopted ten sanctions packages in a row against Russia, and began to impose its most stringent sanctions on a foreign country in history.
The EU aimed to restrict Russia’s income and access to technologies used in war equipment with sanctions. However, according to the research note published by the European Parliament, “the impact of the sanctions will not be large enough to limit Russia’s war activities against Ukraine in 2023.”
Most of the trade relations between the 27 EU countries and Russia still continue due to successful lobbying, efforts to reduce the economic impact of the EU as a result of sanctions, and concerns about the impact of sanctions on the global supply chain.
Instead of imposing new sanctions, the EU now aims to intervene harshly against individuals and institutions that violate existing sanctions. Authorities found that Turkey, United Arab Emirates (UAE), Armenia, Georgia, Kazakhstan and Kyrgyzstan were used as routes to circumvent sanctions.
The ongoing trade relations between the EU and Russia can be listed as follows:
TRADE
The EU’s executive body, the European Commission, announced that Russia was the fifth largest trading partner of the union, with 258 billion euros in trade with the EU in 2021. Fuel, wood, iron and steel and fertilizer were the main products the EU imported from Russia.
After Russia invaded Ukraine in 2022, EU imports from Russia fell by half to nearly 10 billion euros in December last year.
Between March 2022 and the end of January 2023, the EU imported 171 billion euros of products from Russia, according to data from the EU statistics office Eurostat.
The ongoing EU trade with Russia exceeds the 60 billion euros the EU has sent to Ukraine since the beginning of the invasion, which it announced last month, but the aid does not include the cost of the deal on the most recent supply of modern tanks and ammunition to Ukraine.
LIQUEFIED NATURAL GAS (LNG)
Last year, the EU began to impose sanctions on Russian coal and oil exported from Russia by sea. EU sanctions do not cover gas, but Russia has drastically reduced its pipeline gas shipments to Europe since the beginning of the invasion. The EU imported about 40 percent less Russian gas in 2022 than in previous years.
Liquefied natural gas (LNG), on the other hand, was unaffected by the sanctions. Since the beginning of the war, Russian LNG shipments to Europe have increased even more. According to the analysis of the EU, the EU’s Russian LNG imports increased from 16 billion cubic meters in 2021 to 22 billion cubic meters this year.
The EU imports more Russian LNG per year than the roughly 155 billion cubic meters of gas Russia shipped through pipelines to the EU before the war. However, the increase in LNG imports has led some countries to request EU laws to ban LNG imports.
NUCLEAR
The EU also does not impose sanctions on Russia’s nuclear sector. Hungary and Bulgaria, where the Paks power plant to be expanded by the Russian state nuclear power company Rosatom, is located, oppose the imposition of sanctions on Russia’s nuclear sector.
According to Eurostat data, the EU imported about 750 million euros of Russian nuclear industry products in 2022. The EU nuclear agency Euratom said Russia provided one-fifth of the uranium used at EU facilities in 2021, a quarter of its conversion activities and a third of its enrichment services.
Environmentalist non-governmental organization Greenpeace stated in a report published last month that France has sharply increased the amount of enriched uranium imported from Russia since the beginning of the war, while France rejected some parts of the report and announced that terminating the contracts with Russia would be more costly than maintaining the contracts.
DIAMOND
According to Eurostat data, the EU, which does not ban the import of precious stones from Russia and does not blacklist the Russian state mining company Alrosa, bought Russian diamonds worth 1.4 billion euros last year.
Belgium, where Antwerp, the world’s largest diamond trade center, is located, annoyed the tough-minded members of the EU because it did not want the EU to impose sanctions on Russian diamonds and lobbied on this issue.
The EU, US and other G7 countries are working on a tracking mechanism to remove Russian diamonds from the market. The Antwerp World Diamond Center stated that for this mechanism to work, non-G7 India must also be involved.
CHEMICALS AND RAW MATERIALS
The EU imported 2.6 billion euros of Russian fertilizers last year. This figure was 40 percent more than in 2021.
Potash imported from Russia and its ally Belarus is either heavily restricted or banned altogether by the EU. However, Sean Mackle, a member of the industry lobby, stated that other types of fertilizers, including urea, can be freely traded in the region, adding that the incoherent restrictions hinder the implementation of sanctions.
A disagreement between the EU’s 27 member states on exceptions that would allow fertilizer shipments to continue to Africa is preventing further sanctions against Belarus for its support of the war.
Among the raw materials that are not subject to sanctions is nickel, which is mostly used in the production of stainless steel. According to Eurostat data, while the EU imported 2.1 billion euros worth of nickel in 2021, this figure rose to 3.2 billion euros in 2022.
BIG NAMES AND SECONDARY SANCTIONS
The mining company Alrosa and the energy giant Rosatom have still not been added to the EU blacklist of around 1700 people and organizations. Gazprombank, the financial unit of Russia’s natural gas monopoly Gazprom, and Russia’s second largest oil producer, Lukoil, were not added to the blacklist.
Transparency International, the advocacy organization, has long called for Russia’s access to the EU lobby to be restricted and for secondary sanctions, as in the United States, to be imposed on those who assist individuals and organizations that are already subject to sanctions.
(source: REUTERS)