The EU is to implement a price cap on Russian oil and widen the range of products covered by export bans as part of new measures designed to inflict more pain on the Kremlin for escalating the war in Ukraine.
Brussels’ eighth package of sanctions against Moscow will also include a ban on EU individuals serving on boards of Russian state-owned enterprises and new measures targeting individuals involved in the war, European Commission president Ursula von der Leyen said on Wednesday.
Brussels will also extend legal grounds for asset freeze and export bans by adding sanctions evasion to the list of reasons for penalising individuals.
Von der Leyen said the Commission estimated the package would reduce Russian revenues by €7bn annually.
The measures follow Vladimir Putin’s partial mobilisation and sham referendums in Russian-occupied territories in southeastern Ukraine, widely seen as heralding their formal annexation by Moscow.
“We are determined to make the Kremlin pay for this further escalation,” Von der Leyen said.
The commission president denounced Putin’s threats to use nuclear weapons and his decision to back referendums hastily arranged by Moscow supporters in four Russian-occupied Ukrainian regions, saying he had escalated the invasion “to a new level”.
The key part of the new penalties — which need to be unanimously agreed by the 27 member states — is the EU’s first official step towards a price cap on seaborne Russian oil, which has been agreed in principle at a G7 level.
Von der Leyen said the EU would outline the “legal basis” for the oil price cap, which would bar insurance for shipments of Russian crude sold above a certain price. However people familiar with the sanctions said the mechanism setting the level of the oil price cap still needs to be determined by the G7, and that the EU legislation would leave that issue unresolved.
As well as a proposed ban on the export of semiconductors the sanctions will aim to ban sales of dishwashers, washing machines and fridges, according to people familiar with the proposals. This comes after warnings that the Russians have been removing microchips from white goods for use in missiles and other weapons.
Restrictions on aircraft would be extended to parts such as tyres and brake pads, after evidence that Russia had been able to keep their jets flying by using imported spare parts.
EU members would also be explicitly banned from exporting riot control gear such as tasers, tear gas and protective equipment.
The new sanctions will also add more individuals to a list of EU asset freezes and travel bans. Those targeted include people involved in Russia’s occupation and expected annexations, including proxy authorities, said Josep Borrell, the EU’s high representative for foreign affairs.
Others affected will include high-ranking officials involved in Russian defence and those who support Russian troops by providing weapons and aircraft, as well as people accused of spreading disinformation about the war and funding its dissemination.
Oleg Ustenko, economic adviser to the Ukrainian president, told the Financial Times that the first rounds of sanctions had been “pretty effective” but “what would change the picture overall is everything to do with [Russian] energy” given Moscow’s economic dependence on fossil fuel exports.
Ukraine has called for sanctions on all Russian fuel exports, including nuclear. It has pushed for setting a price cap on Russian oil at a level just above the cost of its production.
Ustenko said that given the renewed push from Russia in the conflict, there was “no time to wait and see” what mechanism for an oil price cap should be used and that it should cover insurance, financing and shipping of stocks. It should also include so-called Latvian blend — the adding of Russian oil to barrels of non-Russian supplies, he added.
Kyiv has been pushing hard to maintain momentum for further sanctions but was disappointed by the EU’s announcement that it would relax some restrictions on trade of Russian coal on the same day that Putin announced the further mobilisation of Russian forces, which Ustenko described as “unacceptable”.
A price cap on Russian gas is also being discussed as part of a wider effort to curb energy prices despite opposition from several member states, including Greece and Austria which fear that it could result in a cut-off of any remaining supplies.
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