— On 23 June, the EU formally adopted the 11th sanctions package, focusing on countering circumvention of restrictions via third countries. Won’t such a decision trigger diplomatic complications for Brussels in its relations with these states?
— The EU and its Member States have finally hammered out another package. According to the European Commission, it will ensure that sanctions are enforced even more effectively, building on the lessons learned from their implementation over the past year. Well, from the very outset the main lesson was obvious to everyone, except the European Union: no one in the world would recklessly sign up to EU illegitimate restrictions and cut trade and economic relations with Russia. Hence, as expected, the emphasis is on tightening the monitoring of third countries' compliance with restrictive measures already in place.
The package even includes a “sanctions anti-circumvention tool”, but does not specify what such "tool" is. I guess that is not a coincidence – the aim is to send a kind of warning message to third countries. At the same time, this "tool" is argued to be an exceptional and last resort measure when EU outreach and appeals to "settle things amicably" prove insufficient. Yet, this clarification does not change the essence of the mechanism. It contains obvious signs of an illegal measure under international law, in effect legitimising the extraterritorial nature of EU sanctions policy, previously denied by the EU.
This should become a wake-up call for EU trading partners worldwide, not just "focal" states allegedly found to be circumventing anti-Russian restrictions. If the EU moves from threats to action, this kind of, to put it mildly, cavalier behaviour will certainly be taken into account by third countries in their engagement with Brussels.
— Should we expect a reduction in parallel imports once the new anti-Russian restrictions come into force?
— As for the possible effects on ongoing economic operations, including parallel imports, even local experts do not expect the new "tool" to make an immediate impact as the EU legislation envisages a cumbersome bureaucratic procedure for its activation.
— How effective is this anti-Russian sanctions package likely to be in the end? Wouldn't Europe itself suffer the most from it?
— Obviously, with each new tranche of restrictions, it is becoming increasingly difficult for European institutions to accumulate support from Member States, and compromise within the EU now requires much more effort. While certain European capitals have traditionally demanded tougher measures, others have haggled for individual exemptions, some find it crucial that the restrictions do not hit them harder than they hurt Russia.
As with previous sanctions packages, the voices of disgruntled European businesses are diligently muffled by political statements from the EU leadership. The new sanctions will certainly add uncertainty and various bureaucratic hurdles for companies in the EU. Suffice it to say that local importers from third countries will now have to prove that there are no "Russian inputs" in the steel goods they buy, whose production abroad is, of course, not controlled by them in any way.
— Besides, tankers believed by Brussels to be in breach of the Russian oil import ban or price cap will no longer be allowed into EU ports, and five Russian media outlets have been banned from broadcasting in Europe...
— Further obstacles to Russian supplies of oil and petroleum products to the international market only increase the risks to European energy security. Moreover, being extended to third-country vessels, such measures become extraterritorial in nature. Beyond raising the prices of petroleum products on the EU market, these bans could harm EU countries that traditionally get money from maritime transport. In a nutshell, Brussels is once again pushing European capitals towards measures that run counter to their national economic interests, above all with regard to the phasing out of mutual cooperation with Russia, while expecting to receive additional resources from them to support Ukraine. Such a policy cannot be called anything other than flawed.
As for another range of Russian media outlets now under EU restrictions, Brussels has once again revealed its "double standards": while paying lip service to press freedom, the EU continues to restrict the work of "inconvenient" media resources.
— Should we expect Brussels to start drawing up new restrictive measures in the near future?
— Given that the EU has rubber-stamped 11 packages in less than a year and a half, it has “deserved” a summer break and, having rested, can begin negotiating the next round of restrictions with renewed vigour. All this confirms the main point - Brussels will continue to wage an economic war against us. Another important point is that EU consolidation in the current context of multiple crises - energy, food, migration - is not possible without a unifying force, which remains the countering of the so-called "Russian threat". And the work on the sanctions package is one of the manifestations of this European solidarity.
— What can the EU focus on next?
— We won’t advise the EU which economic sectors or specific products it should include in the next package in order to basically worsen its own socio-economic situation and damage its own foreign trade standing. Given that Brussels has included certain areas in previous sanctions packages against its own economic benefit, it is unlikely that anyone can soberly predict the next set of restrictions. For the sake of "punishing" Russia, the EU seems willing to put a lot at stake.
— The EU is now preparing a legal framework to use frozen Russian assets to rebuild Ukraine. How likely is it that this will happen soon?
— European Commission head Ursula von der Leyen has promised to introduce a relevant legislative proposal before the summer break. That said, it seems that even the European Commission has already given up on the idea of expropriating Russia's international reserves. The point is to provide Ukraine with proceeds from re-investment of our frozen assets which will be received by either the European Commission itself, or by entities that now have them at their operational disposal, such as Euroclear and Clearstream central securities depositories.
Yet, the European Central Bank reasonably cites the associated financial and economic risks, including the imminent erosion of confidence in the international role played by the euro. A number of European capitals, including Berlin, are also seriously concerned about the European Commission's plans. Germany fears that this would set a dangerous precedent, which could be used by Poland, among others. Warsaw is known to be claiming compensation from Germany for damages caused during the Second World War.
— To what extent does such use of assets run counter to current European and international law?
— The EU is wrestling with ways to circumvent generally accepted rules of international law, whereby the property of a foreign state enjoys immunity from any enforcement measures. Even the illegitimate EU sanctions law is unambiguous in this respect: it provides for the temporary freezing of foreign state assets, but not for their confiscation.
— Brussels also continues to provide military assistance to Kiev. Can EU countries increase it amid a failed counter-offensive, for example by speedily supplying F-16 fighter jets or increasing other weapons deliveries?
— Provision of arms to Ukraine by EU Member States depends not only on pressure from Brussels and Washington, but also, of course, on the resources available to European capitals. The ammunition case has shown that European warehouses have limits and the local industry has not yet reached a level where it can cover both Ukrainian and its own needs. Hence, the European Commissioners are travelling around Europe to check how to balance the ammunition situation as soon as possible, to avoid being left unarmed themselves.
I think the fighter jets case will be alike – it will require a balance levelling scheme. The countries providing the planes will request an urgent replacement, preferably a more sophisticated one. This is likely to involve bargaining with the US, because European manufacturers do not have enough capacity to supply such a sensitive weapon as warplanes. Ironically, if such a replacement is carried out, it would effectively bury the EU-wide effort to develop its advanced fighters, because everyone would be tightly "bound" to US long term contracts. However, as with other current economic decisions "beneficial" to the EU, no one takes this factor into account.
— And is it possible that European soldiers will be formally sent to Ukraine in the event of a counter-offensive further failing to meet Western expectations?
— As for hypothetical troop deployments, the point of this crisis for the West is to weaken Russia using others. But nothing can be ruled out when the EU leadership, contrary to the principles of European integration, has embarked on a long-term militarisation of the economy.
— Is there any chance of restoring relations between Russia and EU countries?
— Restoring relation is out of the agenda. Everything has been erased – not just the progress we have made together in recent decades, but also the centuries-old history of our relationship. Everything will be started from a clean page, we do not need any other way. And there is only one condition for our future conversation about the principles of conflict-free coexistence - that the European Union and its Member States renounce the total war declared on us in trade, economic, foreign policy, information and other domains.