Busting European Union Myths (3rd Edition)

Submitted on Wed, 10/12/2022 - 13:45

1. "Getting grains out of Ukraine has been one of our top priorities… the UN-led Black Sea Grain Initiative is making a real difference. It is getting food to countries most in need and helping to stabilize markets. And contrary to Russia's disinformation, this food is getting to Africa, the Middle East and Asia" (Remarks by the President of the European Council Charles Michel at the Global Food Security Summit on the margins of the 77th session of the United Nations General Assembly on 20 September, New York).

"Look at the statistics: two thirds of the Ukrainian exports [as part of the UN-led Black Sea Grain Initiative] have gone to Africa, to the Middle East and Asia" (Press remarks by High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell on the outcome of the informal meeting of EU foreign ministers on 19 September, New York).

"The grain, mostly maize and wheat was directed to Asia (over 40%), Africa (16%), as well as EU countries" (taken from the EU Council website "Food security and affordability"; the share of supply to the EU has not been prudently mentioned).

Even with respect to humanitarian issues, the EU uses creative accounting to retouch the picture, apparently expecting that no one would like to go into detail. By no means, all recipients of Ukrainian grain in Asia, Africa and the Middle East are among the most food insecure and receive aid from the UN World Food Programme. To be more precise, according to the data of the Joint Coordination Center (JCC), as of September 21 this year, only 5 out of 185 vessels with Ukrainian grains and other food products were directed to the countries in most need according to the UN classification of Sub-Saharan Africa (Djibouti (wherefrom the cargo is delivered by land to Ethiopia and other countries of the Horn of Africa), Kenya, Somalia and Sudan.) Another three head towards countries at risk of food shortages in the Middle East and Asia (Yemen and Bangladesh). The "Grain initiative" was conceived precisely in the interests of these countries, not the EU.

No matter what EU leaders say, statistics cannot be fooled. According to the JCC, as of September 21 this year, 93 of the 185 vessels mentioned were heading for the EU (https://un.org/en/black-sea-grain-initiative/vessel-movements). The EU accounts for about 40% of the total shipments. So, no matter how you count, it is the EU, not the world's poorest countries, which is the biggest beneficiary of the Ukrainian grain export deal.

The EU leadership should have checked the figures more carefully before misleading the world community. Only during the period from September 19 to 21 this year (when Charles Michel and Josep Borrell voiced their accusations against Russia on the margins of the UN General Assembly in New York) almost 400 thousand tonnes of food products (or more than 60% of the total volume during these three days) were transported to the EU member states through the Black Sea routes. 263.9 thousand tonnes - to other countries. Only one shipment went to countries prone to the threat of food shortage (Bangladesh). During that period 18 vessels sailed to the EU ports while nine – to the ports of other countries. The balance is obviously in favour (or rather against favour) of the European Union.

Conspicuous is the fact that the basic deliveries from Ukraine include the feeding maize and soy, on the import of which the EU live-stock farming considerably depends, rather than the wheat, which was intended by the EU to "feed the whole world."

As regards ten million tonnes of the Ukrainian food products (mentioned in the remarks by Charles Michel on 20 September this year cited above) that were brought to the EU by land within its Solidarity Lanes Initiative, it is still unclear where they ended up, and in which volume. The European Union shies away from disclosing the corresponding data.

2. "Another priority is to tackle the shortage of fertilisers. We need to develop capacities for production, especially in Africa" (with reference to the Remarks by President of the European Council Charles Michel at the Global Food Security Summit on the margins of the 77th Session of the UN General Assembly on 20 September this year, New York).

By its rash energy policy and unilateral sanctions against Russia and Belarus, the European Union itself provoked the global shortage of fertilisers. Seeking to cut export revenues for the Russian budget, Brussels could not be bothered to take into account the fact that the Russian Federation was the first in the world to export nitrogen fertilisers, the second - to export potash fertilisers, and the third - to export phosphorous fertilisers.

It turned out to become far more complicated for the Russian supplies of fertilizers to carry on because of the payment problems (including due to target restrictions and cut-offs of the leading Russian banks from SWIFT) created by the EU sanctions and logistics. It overlaps with the overcompliance of the European economic operators. Businesses have fears of administrative and even criminal persecution for violating the sanctions regime.

Serious constraints for the supplies of Russian fertilisers to the third countries were created by the EU target (personal) sanctions against shareholders and management of Russian manufacturers and exporters of such products. As a result of this behaviour, about 300 thousand tonnes of fertilisers in total got stuck in the ports of the EU Member states, which Russia is ready to transfer free of charge to developing countries that are in acute need of these products.

The export of Russian potash fertilisers to the world market is extremely hampered by direct EU restrictions. The reason is the ban on transit through the EU ports and on any participation of the European companies and international companies with EU share in trade, shipment, and insurance services as regards this type of fertilisers from Russia. The only exception the European Union made was for itself, setting a separate quota for imports to the EU member states in the amount of the average annual volume of supply, i.e., in fact, it completely exempted itself from restrictions imposed on Russian potash fertilizers.

Now Brussels is trying to overcome challenges it has caused itself. On 19 September 2022, the European Commission released additional "clarifications" on how EU member states can allow the transit of potash fertilizers to third countries, particularly those in the greatest need, and the provision of related services. At the same time, the initial ban on the transit of Russian sanctioned products through the EU to third countries and the provision of related brokerage and financial services enshrined in EU legislation has not been lifted. It is still unclear whether such vague and non-binding measures have any effect in terms of reducing the deficit of fertilizers on the global market.

Brussels says nothing about what agrarian countries, which do not receive sufficient amounts of Russian fertilizers and are at risk of a sharp decline in crops in the near future, should do. It is suggested only to wait for the fertilizer production facilities to be built in their territory and equipped with the relevant advanced technology, which will take time and deepen their dependence on the EU.

The European Union, making new promises, including of financial assistance for food security, is relying primarily on a propaganda effect.

3. "I want to stress that our sanctions are targeting the Russian war economy, not food and agriculture. Our sanctions apply to the European Union’s citizens and the European Union’s operators. They apply only in the European Union’s territory. None of our sanctions targets the trade of fertilizers between third countries and Russia. Even us, we continue importing fertilizers from Russia, with a limit. So how could we prevent our fertilizers going to third countries if we are still importing?" (Informal EU Foreign Affairs meeting: press remarks by High Representative of the European Union for Foreign Affairs and Security Policy Josep Borrell, 19 September 2022, New York).

While continuing to impose new sanctions against Russia, the European Union is trying to convince the international community of their pinpoint precision and selectivity.

This, however, does not prevent Brussels from retroactively introducing certain "indulgences" for food and fertilizers into the anti-Russian sanctions regime, thus automatically refuting EU's claims that restrictions against supply of these products to world markets are not targeted.

Contrary to what Josep Borrell says, in addition to indirect sanctions, there exist direct sanctions against Russian agricultural industry.

Thus, the import from the EU to Russia of certain goods necessary for the production of fertilizers and agricultural output (components, equipment and agricultural machinery itself, including elements of hydraulics and bodies, radiators, gearboxes, ceramic gutters, vats and tanks used in agriculture, self-loading trailers and semi-trailers, and software for "smart" machines) has been banned. This list is just becoming longer. In particular, the sixth package of EU sanctions adopted this June 3 imposes a ban on importing beet pulp, bagasse and sugar cane pulp used as forage in animal husbandry to the EU from Russia, as well as on supplying Russia with critical equipment and technologies to produce fertilizers and extract relevant raw materials (e.g., to clean natural gas from sulfur to produce ammonia).

According to experts of the Bank for International Settlements (BIS, Switzerland), the entry into force of restrictions on the import of Russian oil into the EU upcoming this December 5, will lead to a long-term increase in prices for grains, oil crop and other types of food.

4. "…many operators prefer not to do business with Russia anymore. It is their choice. It is not because they have to, it is because they do not want. This is called overcompliance" (news conference by EU High Representative for Foreign Affairs and Security Policy Josep Borrell following an informal meeting of EU Ministers of Foreign Affairs, 19 September 2022, New York).

J. Borrell's interpretation of "overcompliance" is fundamentally different from the official vision of the European Commission.

The "clarifications" of the European Commission of 17 April 2022 on how to enforce anti-Russian sanctions explicitly state that the bans on certain types of economic activity they envisage are deliberately worded "very broadly" in order to cover the maximum possible range of import- and export-related operations. At the same time, economic operators themselves are responsible for strict compliance with the requirements of the sanctions regime against Russia.

Moreover, the EU is working systematically, including legislative measures, on countering the circumvention of EU sanctions. EU companies and citizens divulged in violating, circumventing or facilitating the circumvention of sanctions are threatened with prosecution, up to and including criminal prosecution. In May, the European Commission launched a legislative initiative to criminalize violations of EU sanctions legislation EU-wide, including direct or indirect assistance in circumventing restrictive measures.

Thus, the refusal of foreign companies to cooperate with Russian partners is a direct result of the purposeful efforts by the European Union. First, they confuse and intimidate business and then, as in the case of J. Borrell's remarks, begin to promote, on its behalf, slogans that neither correspond to reality nor serve its economic interests.