Key facts
- EU ambassadors are meeting in Brussels to discuss new sanctions against Russia and trade with Israeli settlements.
- The 21st package of EU sanctions against Russia is facing significant delays and has been extensively pared back.
- Proposed measures like an import ban on Russian fish and a ban on Russian ex-combatants entering the Schengen zone have been scrapped or significantly weakened.
- Disagreements over an oil price cap for Russian crude and exemptions for Greek LNG shipments are holding up the sanctions package.
- Austria is demanding compensation for its Raiffeisen bank's Russian operations before approving the sanctions.
- The EU is considering three options to restrict trade with Israeli settlements, with a full ban facing opposition from Germany and the Czech Republic.
European Union ambassadors are struggling to reach an agreement on a new package of sanctions against Russia and potential trade restrictions with Israeli settlements, with potential holiday delays looming. The 21st sanctions package against Russia, proposed in early June, has been significantly weakened due to demands for exemptions and opposition from various member states.
Initially, ambitious measures such as an import ban on Russian fish and a ban on Russian ex-combatants entering the Schengen zone were proposed. However, countries like Germany, Poland, and Portugal sought exemptions for fish processing, leading to the scrapping of the fish ban. Similarly, Mediterranean countries were hesitant to curb tourism from Russia, resulting in a commitment to seek changes to the Schengen visa code rather than an immediate ban on former combatants.
Significant debate also surrounds an oil price cap on Russian crude, with the cap's duration being reduced and entangled with Greece's demand for an open-ended exemption to a ban on EU shipments of Russian liquefied natural gas (LNG) to non-EU states, set to take effect in 2027. Greece argues that allowing its companies to continue these shipments would be more beneficial than shifting the business to non-EU companies.
Austria has also stalled approval, demanding compensation for its Raiffeisen bank, which claims losses of €2.5 billion ($2.9 billion) due to the expropriation of its Russian operations. Vienna argues that proceeds from seized Russian assets could fund Ukraine's reconstruction, but other member states fear this could encourage Moscow to target other European companies in Russia.
Despite the dilutions, the package is expected to include more blacklistings of Russian banks and vessels involved in the 'shadow fleet' used to evade sanctions, along with visa bans and asset freezes for over 250 Russian individuals and firms. However, even this list has been diluted, with Bulgaria vetoing the inclusion of Patriarch Kirill, Vagit Alekperov, and Iskandar Makhmudov due to their companies' business ties in Bulgaria.
Separately, the EU is considering three options to restrict trade with Israeli settlements, but Germany and the Czech Republic are opposing a full trade ban.