BRUSSELS (Parliament Politics Magazine) – In a new set of measures meant to cripple the Russian economy, the European Commission on Friday suggested including imports of Russian gold in new sanctions.
The EU executive would view the new planned limits as a “maintenance and alignment” package rather than a seventh round of sanctions, which many member states have already spoken against.
However, it would impose a new embargo on Russian gold this time.
The value of the precious metal, which is Russia’s second-largest export after energy, exceeded €18.5 billion in 2020.
The Observatory of Economic Complexity, which compiles information on global trade, reports that the majority of Russia’s gold was exported to the UK in that year with the rest €2 billion worth goes to Kazakhstan, India, Turkey and Switzerland.
The EU’s justification for the gold blockade is that it wishes to stand with its major international allies as promised during the G7 meeting that took place in Germany last month. Such a sanction has already been implemented by the UK, US, and Japan.
Given that oligarchs bought gold bullions in recent months in an effort to minimise the blow of Western sanctions on Russia, it should also cause serious harm to the Russian elite and economy.
Improving how the sanctions function
The remaining components of the suggested package are meant to plug gaps and improve adherence to the sixth round of sanctions already imposed against Moscow since it began its assault in Ukraine on February 24.
These have aimed at the import into the EU of Russian coal and other solid fossil fuels, steel and iron, wood, cement, crude oil and refined petroleum products, as well as the export to Russia of cutting-edge technology, particularly if it can also be utilised by the military.
Transit through the EU is likewise prohibited for all of these commodities.
Major Russian banks were also targeted and cut off from the global SWIFT system, which prevented them from receiving foreign currency. In the meantime, the foreign assets of hundreds of billionaires and senior Russian officials have also been frozen, along with the foreign reserves of the Russian National Bank.
In an effort to give third countries more precise information about who and what the EU has targeted, the new package will also fortify “reporting requirements to tighten EU asset freezes,” expand the list of sanctioned people and organisations, and make clear “the exact scope of some financial and economic sanctions,” said the Commission.
For example, Russia has attributed the rise in food prices on Western sanctions, which the EU and its partners vehemently reject, emphasising that their actions do not obstruct the movement of agricultural goods between Russia and third countries.
A decision in the following week
They were suggesting that day that the EU sanctions they now had in place on the Kremlin be strengthened, made more stringent, and extended until January 2023. Moscow needed to keep paying dearly for its aggression, Ursula von der Leyen, the president of the commission, said a statement.
With the new restrictions, they continued to target those connected to Putin and the Kremlin, said Josep Borrell, High Representative of the European Union for Foreign Affairs and Security Policy.
The package they had released today represented their coordinated strategy with global partners, including the G7. He would also propose to Council that more people and organisations be added to the list, their assets frozen, and their freedom to travel restricted, in addition to these actions, he added.
The Commission’s package now requires unanimous approval from all member nations.
At a meeting of EU foreign affairs ministers on Monday, a senior EU diplomat told reporters on Friday in the afternoon that no decision should be made regarding penalties.
However, it might be approved at a Wednesday meeting of EU ambassadors.
