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EU nations push for sanctions on global financial institutions over Russia – Reuters

France and the Netherlands have reportedly proposed a transactions ban on any entity that supplies dual-use goods to Moscow’s military

France and the Netherlands have been advocating for the EU to impose sanctions on any financial institution globally that helps Russia’s military pay for goods or technology that can be used for making weapons, Reuters has reported.

The EU already has a ban in place on selling to Russia certain dual-use goods and technologies that have both a civilian and military application.

According to Reuters, citing the French and Dutch proposal, it is suggested that EU individuals and entities could be banned from doing business with any financial institution in the world that is identified by the bloc as directly or indirectly helping Russia’s military obtain forbidden dual-use goods and technologies.

Ambassadors of EU governments will reportedly discuss the proposal on Wednesday as part of a 14th package of sanctions against Russia now being prepared by the bloc.

“The Netherlands and France propose to introduce a legal basis … providing for a transaction ban with financial institutions in Russia or other third countries when the Council has determined these entities to be involved in transactions that significantly support Russia’s military by facilitating exports towards Russia of essential goods for the war effort …” the proposal reportedly reads.

According to Reuters, the ban could be a “powerful incentive” for financial institutions in the Middle East, Türkiye, or even China not to engage in deals to supply EU-sanctioned dual-use goods to Russia as they could be stripped of the ability to do business in the EU and lose access to the bloc’s financial markets.

EU officials reportedly said the European Commission would be likely to coordinate any such sanctions on financial institutions with the US.

The report indicated that Hungary, which has maintained friendly ties with Russia, may oppose the proposal, as may Germany in light of its close business ties with China.

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EU criminalizes sanctions busting by member states

In February, Brussels adopted its 13th package of sanctions against Moscow ahead of the second anniversary of the beginning of the Ukraine conflict. The measures restrict trade in dual-use goods, as well as technologies and electronic components that could be used by Russia’s defense industry.

Previous rounds of sanctions targeted a broad range of sectors and included trade embargoes, travel bans, and individual sanctions against Russian businessmen and public officials.

Many reports have indicated that EU sanctions on Russia are being “massively circumvented” via nations that are friendly to Moscow, which are reportedly re-exporting high-priority items to Russia.

The EU expects to have the new sanctions package, which has to be approved by all 27 member states, ready in June.

May 16, 2024 at 01:14AM

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