March 2. 2024. 2:56

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War in Europe, One Year On: Irish man upholds EU’s economic weapon against Russia

The invasion of Ukraine split the world between a bloc of wealthy and pro-Western countries that have imposed unprecedented economic sanctions in a bid to isolate Russia, and a long list of more ambivalent states that have declined to join that effort.

The man charged to be the European Union’s envoy to overseas countries and persuade them, even if they won’t join the sanctions, not to become a tool for their circumvention, is Dubliner David O’Sullivan.

How does he explain to overseas governments why this war matters so much to Europe?

“It’s relatively simple,” he says in an interview in his sparse grey office on a high floor of the European Commission’s headquarters, the Berlaymont. “For Europeans, we are far from convinced that even if Mr Putin were victorious in Ukraine, that that would be the end of his ambition.”

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War in Europe, One Year On: Irish man upholds EU’s economic weapon against Russia

War in Europe, One Year On: Irish man upholds EU’s economic weapon against Russia

“He clearly has an expansionist vision of Russia’s role in the region,” O’Sullivan continues, citing Putin’s statements over the years. “Given what he has already been willing to do in Ukraine, I think people are legitimately concerned that this might not be his last war if he were to be successful.

“This really is about putting an end to any imperialistic ambition that he may have, and demonstrating to him that that will not be accepted.”

O’Sullivan has met Vladimir Putin as part of the small EU team who would hold talks with the Russian president back when trade seemed a route to broader co-operation, in the years before his territorial expansion into Ukraine began with the annexation of the Crimean peninsula in 2014.

Outreach to regions from Africa to Asia was O’Sullivan’s brief for decades, with stints in Tokyo and as the EU’s ambassador to Washington. This experience is what led to him being prematurely called away from a comfortable late-career role heading the Dublin-based Institute of International and European Affairs – which he can’t praise enough – to last month take up the newly created role of International Special Envoy for the Implementation of EU Sanctions.

His office shares a floor with the cabinet of Ireland’s Commissioner, the EU’s financial services chief Mairead McGuinness The head of the financial services division, John Berrigan, also happens to be Irish. This part of the Berlaymont is the brains trust of the EU’s sanctions regime, and it has a decidedly green tinge.

“The kind of clustering of a number of Irish people is the subject of the odd remark,” O’Sullivan acknowledges. It goes somewhat against the balance of nationalities that EU institutions try to achieve.

“People may even have said: is that too many Irish people? I think all of us are there because, hopefully, we’re good at what we do,” he continues. “I think it’s a little bit of a coincidence that there’s quite such a collection.”

He has recently returned from a trip to the United Arab Emirates, his first since taking up the role: the US, UK and EU sanctions chiefs all travelled together. At an early breakfast meeting this week, he briefed EU ambassadors about where loopholes may lie.

We have battlefield information from the Ukrainians about how they are picking up bits and pieces ... Progressively, as we get this information, we are banning also those kinds of exports

In the year since the invasion, the EU’s trade with Russia has slumped as it banned imports of products from coal to caviar, slapped asset freezes and travel bans on some 1,386 people involved in the invasion, and sought to close off exports of anything the Kremlin could use on the battlefield.

But trade with other countries saw unusual spikes.

“Our trade with Russia has diminished considerably. But we see our tradewith some other countries has increased very quickly and very sharply,” O’Sullivan says. “Obviously, the first question is: is all of that trade going actually to those countries? Or is some of it finding its way to Russia?”

He lists Turkey, the UAE, Serbia, Kazakhstan, Kyrgyzstan and Uzbekistan as countries with similar “disturbing trade patterns, which lead us to to ask whether there might not be circumvention”.

The EU is now on sanction round 10, and has sanctioned most of what can easily be hit. He expects rolling updates to the sanctions regime, shutting off loopholes, “certainly as long as the hostilities continue”.

Unable to manufacture certain technology and now barred from importing it, the Russian military is suspected to be stripping components such as semiconductors from household appliances to reuse in weapons.

“We have battlefield information from the Ukrainians about how they are picking up bits and pieces from other more innocuous products – you cite the example of washing machines. There are other illustrations of this,” O’Sullivan says. “Progressively, as we get this information, we are banning also those kinds of exports.”

O’Sullivan’s meetings this week, and those of McGuinness with the key people working on sanctions within EU national governments, have begun the work of pooling data.

“We get some information from the member states. We get information from the private sector very often, who will say to us: we’re complying with the sanctions, but we have suspicions that other companies might not,” O’Sullivan says.

“So we’re trying to pull all this together into a sort of consolidated assessment of what’s happening, and see how we can identify where there might be circumvention happening, and how it can be stopped.”

EU nationals that work to evade sanctions outside the EU are “individually criminally liable”. Companies outside the EU that facilitate evasion by EU businesses can find themselves on the sanctions list.

But how to pressure overseas countries not to become back doors for evasion is a matter of debate within the union. Precedents exist of using visas and trade treatment as pressure points. But for now, the EU is asking nicely.

“We are very respectful of the views of third countries who don’t want to align, who have their own opinions about the nature of this conflict, who don’t share necessarily our analysis, but who equally do not want to become a party to circumvention of our sanctions,” Mr O’Sullivan says. “That’s the space where we have to work together.”

Having said that, “if we had evidence that countries were actively either passively or actively aiding sanctions circumvention, this could have consequences for our broader relations with those countries,” he warns.

Part of his message is that the sanctions are likely to stay for many years.

“Even if we were to assume, which is not self evident today, a cessation of hostilities at some point, there are going to be so many other issues to be addressed. War crimes, accountability, reparations, cost of reconstruction ...” he trails off. “We’ve been advising countries that we’re going to have to learn to live with this.”

The aim of the sanctions are to deny Russia the technology its military needs, to remove its funding for the war, and to impose a general economic cost for deciding to invade Ukraine. Will it work?

“Is this going to stop the war from one day to the next? Probably not. Mr Putin is a dictator who doesn’t respond to electoral constraints. So if he’s determined to continue, he probably can – but at huge cost to his economy,” O’Sullivan says.

But he believes the sanctions are having their intended effect.

“There’s evidence that Russia is struggling to find the funds. They have gone on to a sort of war economy footing. So they’re putting all of their money into the war effort, but this is at the cost of considerably running down their expenditure on other issues,” O’Sullivan says. “This is unlikely to be sustainable in the medium term.”

Putin may gamble that, in the absence of domestic pressure, he can outlast the West.

“But I think when you look at the impact which these sanctions are having on Russia, they are going to force people to think again in the medium term, I’m absolutely sure.”

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