The head of European diplomacy, Josep Borrell, believes that the consequences of sanctions against Russia may not be very noticeable at the moment, but they will prove their effect in the long run, so Europe must show “strategic patience” until “Ukraine can completely re-establish its sovereignty.”
“We have no choice. To let Russia take the lead would be to allow it to destroy our democracies and the foundation of an international rules-based world order,” he said.
Borrell noted that the restrictions imposed affect the order 1200 peopleabout 100 Russian enterprises and various sectors of the Russian economy.
“Sanctions adopted by the EU and like-minded partners are already hitting hard” [президенту РФ] Borrell said that Vladimir Putin and his accomplices and their influence on the Russian economy will increase even more.
However, he noted that it may take a long time to achieve the desired effect.
“Now as the war drags on and the cost of energy rises, people in Europe and elsewhere are wondering if these sanctions are working and how big are the side effects,” the politician said.
According to him, the ban on the supply of semiconductors to Russia limits the production of high-precision missiles in the country, which is of decisive importance in the war in Ukraine. Borrell believes that in the medium term, Russia will find itself in scientific, economic and technological isolation.
The head of EU diplomacy described the cessation of Russian oil purchases by the end of the year as the main restrictive measure.
Yes, Russia can sell its oil to other markets, but this advantage is limited by Russia having to give high discounts per barrel (Russian oil is sold for about $30 less than the world average),” he said.
Borrell noted that the effectiveness of the restrictions has increased as “more than forty countries, including traditionally neutral ones” join the restrictions.
Gaps in European sanctions
Politico writes that the new sanctions package, which is being developed against Moscow in the European Union and whose main purpose is thought to be an embargo on the purchase of Russian gold, will not apply to jewellery. European Commission.
In the document quoted by Politico, it was stated that “The direct purchase, import or transfer of gold products listed in the Annex will be prohibited if they are exported from Russia or exported to the European Union through a third country”.
Citing the project, the publication claims that the EU will only ban powdered gold, raw gold, empty gold, as well as gold coins and waste or gold scrap.
“The project does not specify gold in the form of jewelry such as gold chains or gold rings. This could leave gaps in the Kremlin vault that could help money flow,” writes Politico.
In addition, as the authors of the article stated, approximately 90% of gold exports from the Russian Federation in 2019 came from the UK, which left the European Union.
Russia is one of the largest suppliers of this metal. It exports several billion euros worth of gold every year. According to the Ministry of Finance and the Federal Customs Service, in 2021 Russian enterprises produced 346.4 tons of gold, exporting 87% of production, bringing in $ 17.4 billion.
In addition, the Russian gold market Buyers from India, UAE and China, Seligdar gold mining conglomerate told Interfax. The company said that the main buyers in the gold market are India, which consumes about 800-900 tons of gold per year, and China – about 1,000 tons. “There were arguments as we focused on Asian region countries, in principle the main buyers, gold markets,” the holding representative said.
What’s in the new sanctions package?
The ban on buying Russian gold is only part of the seventh package of restrictions.
The new restrictions will include stricter reporting requirements for asset freezes for people on the sanctions list and tighten controls on exports of dual-use products and advanced technologies.
Thus, the EU plans to ban the export of tear gas, police helmets and shields, fingerprint ink and water cannons “that could be used against people” to Russia.
The document also provides for certain exceptions: countries can allow the use of frozen assets when they aim to prevent events that “could have a serious and significant impact on human health and safety or the environment.”
A similar EU exemption could apply to imports and shipments of agricultural and food products such as wheat and fertilizers.
“EU sanctions are in no way intended to restrict Russia’s trade in agricultural products with other countries,” said Ursula von der Leyen, President of the European Commission.
According to Reuters, the new package will include personal sanctions against individuals and organizations close to the Kremlin.
Earlier, Bloomberg, citing sources, said the EU could lift personal sanctions against some Russians. According to the agency, Alisher Usmanov, Alexei Mordashov, Andrei Melnichenko and his wife Alexandra Melnichenko are objecting to the sanctions.
The European Commission stressed that the new package “links EU sanctions more closely with the sanctions of its partners”, notably the G7 countries that agreed on an embargo on Russian gold in June. On July 8, Canada banned the import of some gold products from Russia.
The decision to introduce new restrictions must be approved by the European Council. This is expected to happen before the end of July. A source from the EU foreign policy service told TASS that the new sanctions package will be discussed at the meeting of EU foreign ministers on July 18, which will discuss additional military aid to Kiev.