May 24. 2024. 7:06

The Daily

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EU sets out new €11b Russia sanctions, adds Iranian entities for first time

The EU aims to sanction seven Iranian entities cooperating with the Russian military as part of the bloc’s tenth sanction package against Russia, which is set to hit Moscow with trade bans and technology export controls worth €11 billion over its invasion of Ukraine.

“For the first time we are also proposing to sanction Iranian entities including those linked to Iran’s Revolutionary Guard” because of their “supply of drones and the transfer of know-how to build production sites in Russia,” European Commission President Ursula von der Leyen told EU lawmakers in Strasbourg.

The sanctions will include seven Iranian entities, including those linked to Iran’s Revolutionary Guard, as the bloc seeks to halt Iran’s provision of drones to Russia.

It will be the first time Iranian economic operators involved in Russia’s war in Ukraine are part of the EU’s sanctions package.

EU ambassadors were set to meet later on Wednesday to discuss the details as the sanctions package has yet to be adopted by EU member states.

Frozen assets, circumvention

The EU also said it aims to force banks to report information on Russia’s central bank assets.

“We need to know where these are located and how much they are worth,” von der Leyen said in a video statement announcing the new set of measures.

Current EU estimates suggest that the Russian central bank assets frozen abroad could amount to up to $300 billion, of which up to €33.8 billion could be in EU-based deposits.

The EU has been exploring options to use frozen Russian assets following Moscow’s invasion of Ukraine, but the proposal remains controversial due to a lack of legal framework or precedent and discussions remain at a very preliminary stage.

With the tenth sanctions package, the European Commission also proposed strengthening the reporting obligations on frozen assets linked to sanctioned Russian companies and individuals, and suggested fines, according to a proposal sent to member states.

Those will amount to as much as €50,000 for individuals and 10% of annual turnover for entities, to be imposed for failure to provide the required information.

“We propose new measures to prevent circumvention (…) Our special envoy David O’Sullivan is reaching out to third countries to address circumvention of sanctions,” von der Leyen said.

Next week, the European Commission will organise a Sanctions Coordinators Forum “to strengthen enforcement”, she added.

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Trade bans

Von der Leyen said that the EU’s upcoming sanctions package would target €11 billion worth of goods via trade bans and technology controls.

The proposals will add rare-earth compounds, integrated circuits and cameras to the list of barred products, according to drafts sent to member states.

It will add electronics, specialised vehicles, machine parts, spare parts for trucks and jet engines as well as goods for the construction sector which could be directed to Russia’s military, such as antennas or cranes.

“We will further restrict the export of dual-use goods and advanced tech goods and propose controls on 47 new electronic components that can be used in Russian weapons systems, including drones, missiles, helicopters,” von der Leyen said in her video statement.

“With this, we have banned all tech products found on the battlefield and we will make sure they don’t find other ways to get there,” the Commission chief added.

“For maximum impact, we are targeting many industrial goods that Russia needs, and that it cannot get through backfiling through third countries,” she said.

Moreover, the bloc plans to extend restrictions on media outlets linked to the Kremlin.

The EU plans to adopt its tenth package of sanctions next week, ahead of the one-year mark of Russia’s invasion of Ukraine and Moscow’s anticipated spring offensive.