Brussels – The EU breaks the taboo on Russian gas. After weeks of negotiations, ambassadors from member countries reached an agreement today (June 20) on the 14th package of sanctions on Russia since the start of the war of aggression in Ukraine. A “powerful and substantial” package, the Belgian rotating presidency of the EU Council calls it in making the announcement. For the first time, Brussels targets LNG imports from Moscow, which generated some 8 billion euros in profits for the Kremlin in 2023.
Official approval and publication of the package will have to wait for the EU Foreign Affairs Council on Monday, June 24. However, EU sources say the sanctions will affect “more than 100 new persons and entities, for a total of over 2,200,” and include measures to cut back on “imports, investments, and transshipments of LNG.”
Even though the EU has reduced its dependence on Russian gas by about two-thirds since the beginning of the conflict in Ukraine, it has continued to import and resell it. And so, even if that LNG from Moscow represented only 5 percent of the EU’s gas consumption in 2023, the 20 billion cubic meters of Russian LNG purchased by the 27 Member States – Belgium, France, and Spain were the major input points – have brought into the Kremlin’s coffers profits of about 8 billion euros.
The agreement reached today by EU ambassadors does not include an outright import ban: European companies will still be able to purchase Russian LNG, but it will be prohibited to re-export (or transshipment) it to other countries. According to the IEEFA (Institute for Energy Economics and Financial Analysis), about 21 percent of the LNG arriving from Moscow is transshipped globally. Over 4 billion cubic meters.
“This hard-hitting package will further deny Russia access to key technologies” and “strip Russia of additional energy revenues,” European Commission President Ursula von der Leyen exulted in an X post. The deal passed after strong opposition from Germany and Hungary: Budapest did not want further sanctions in the energy sector. Berlin expressed reservations about the planned burdens on European companies to prevent circumvention of existing restrictive measures.
As EU sources explain, the 14th sanctions package also provides “additional tools to prevent circumvention, especially in the case of third-country subsidiaries of EU parent companies.” Reportedly, it envisages two types of remedies to protect EU companies “so that they can take action before national courts to seek redress.” On the one hand, they can obtain compensation for damages incurred “from lawsuits brought in third countries by Russian or Russian-controlled entities for contracts or transactions the performance of which was affected by European sanctions.” On the other European companies “will be protected against damages caused by Russian entities that have benefited from Russian measures of allocation under temporary administration.”
English version by the Translation Service of Withub
