EU blacklists Abramovich, targets energy, luxury sectors with new Russia sanctions

The European Union on Tuesday launched a new barrage of sanctions against Russia for its invasion of Ukraine, including bans on Russian energy sector investments, luxury goods exports to Moscow and imports of steel products from Russia.

The sanctions also freeze the assets of more business leaders who support the Russian state, including Chelsea football club owner Roman Abramovich and the head of Russian state TV Channel One Konstantin Ernst, who were added to a blacklist that already includes dozens of wealthy Russians.

The latest sanctions follow three rounds of punitive measures which included freezing of assets of the Russian central bank, the exclusion from the SWIFT banking system of some Russian and Belarusian banks, and the freeze of assets of oligarchs and top politicians, including Russia’s President Vladimir Putin and foreign minister Sergey Lavrov.

The European Commission said the sanctions included “a far-reaching ban on new investment across the Russian energy sector”.

The measures will hit Russia’s oil majors Rosneft, Transneft and Gazprom Neft, who will be subjected to a transactions ban, but EU members will be still able to buy oil and gas from them.

Investment in energy projects within Russia run by other Russian companies, including gas giant Gazprom, will also be banned.

The investment ban applies to the whole energy sector, excluding nuclear energy, because some EU countries still rely on technology provided by Moscow for Russian reactors on their soil, the official said. Russia’s exports of several raw minerals, including fossil fuels and palladium, remain possible.

There will also be a total ban on transactions with some Russian state-owned enterprises linked to the Kremlin’s military-industrial complex.

No more caviar

The bloc reached a preliminary agreement on the new sanctions on Monday.

Under the sanctions, the assets of Abramovich and other oligarchs are to be frozen, but decisions on how to apply this measure rested on EU governments.

The impact on companies owned by blacklisted businessmen remained unclear because there are no precise rules at EU level on how to identify control or ownership, an EU official said.

The EU is trying to bolster exchange of information among EU states to facilitate seizures, as some members have limited staff and may also lack the political will.

The ban on Russian steel imports is estimated to affect 3.3 billion euros ($3.6 billion) worth of products.

EU companies will also be no longer allowed to export to Russia any luxury goods worth more than 300 euros, including precious stones, crystal, caviar, wine, handbags, leather products, shoes and coats. Exports of cars costing more than 50,000 euros will also be banned.

This was meant to impact on the lifestyle of Russia’s elites, an EU official said.

The package also prohibits credit rating agencies based in the EU from issuing ratings for Russia and Russian companies.

One EU official said the EU was in advanced talks with Washington for the adoption of similar measures by the U.S. which is home to the world’s top agencies, “otherwise the measure will have very little effect.”

The EU also agreed to strip Russia of its “most-favoured nation” trade status, opening the door to punitive tariffs on Russian goods or outright import bans.

[Reuters]